A Call for Evidence on Improving the consumer landscape and quicker switching out today suggests a faster mortgage application process could be achieved with simultaneous processing, including conveyancing, review of documents and in the event of an accepted offer, transfer of funds.
The CML said regulatory hurdles and the valuation make it tougher to complete to a tight timescale than in other sectors like utilities, communications and current account switching.
It added that the sector has just been reviewed by the regulator with a competition study starting in Q4 this year and said there is no evidence that a longer remortgage timescale is stopping anyone changing their loan.
For the Department of Business, Innovation and Skills (BIS), the 7-day period begins “when the consumer gives their consent to switch to the new provider, and the new provider accepts that customer.”
“In the mortgage market, this may imply that the 7-day period would only begin once all the necessary risk assessments, affordability checks, and confirmation to the customer has been given. If that is the correct interpretation, then many lenders would potentially already be operating to the 7-day timescale for completion,” said the CML.
Paul Smee, CML director general, said: “We fully support the switching principles, and our members have long recognised that speed (as well as cost and service) is frequently valued highly by remortgage customers. However, whether a 7-day target is realistic, given tasks that lenders need to complete to fulfil risk and regulatory requirements, depends on when the clock starts ticking.”
