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Application to completion failures should not be so high – Clifford

by: Rob Clifford, chief executive of Stonebridge
  • 04/01/2021
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Application to completion failures should not be so high – Clifford
We talk a lot about the damage caused by aborted transactions and I’m aware of the work currently ongoing to try to ensure the purchase process, in particular, is fine-tuned to keep those numbers down to a minimum.


This is not an issue purely down to agents or conveyancers, but one that mortgage advisers will also be acutely aware of.

One mortgage club revealed its purchase application to completion ratio had dropped to just 22 per cent in July through September which seems like a startling rate, and one that will be incredibly frustrating for its advisers who are seeing close to four out of five purchase cases not move through to completion.

It somehow reminds me of that old darts adage, ‘Trebles for show, doubles for dough’, in that applications are of course a vital part of the process but, if they don’t complete, then clients are not getting the funds and advisers are not getting paid.

The application attrition rate is not a new thing of course, but current market activity may well have something to do with it.

Two of the key drivers of the application to completion rate remaining high will obviously be buyer behaviour and lender underwriting.


Weed out the unlikely candidates

On the face of it, there does seem to be a higher incidence of clients pulling out, and when it comes to lenders, there are many more criteria issues impacting on their decision process and a greater propensity to turn more potential borrowers down after application.

We know there is a higher bar for many borrowers to overcome in terms of criteria, suitability and affordability, but that has been known for some time.

This has not simply crept up on us overnight and good advisers should really be weeding out those cases which are likely to fail at the application stage due to the stricter measures lenders understandably have in place.

One major mainstream lender recently informed Stonebridge that it has had to manually underwrite far more cases in 2020 than ever before.

A consequence of the greater complexity of borrowers’ circumstances particularly when you have to factor in the potential for furloughed income, mortgage payment deferrals, and the like.

Again, though, advisers should have a far greater advantage here in terms of being aware of criteria and lenders’ stances and being able to work out where best to place a case.


Competitive advantage for brokers

That advantage will be even more pronounced when compared to those consumers going direct to lender – and it’s perhaps here where we are likely to be seeing the vast majority of cases being ‘thrown out’ at the application stage or during underwriting.

Online, direct and non-advised customers will not have an experienced professional there to hold their hand and direct them away from danger.

Cases will inevitably fail between application and completion, but advisers should be in the box seat here, thereby minimising the potential for rejection by lenders.

It’s a competitive advantage to have a much better completion rate and to market this to customers. Clearly something is going wrong for those at the other end of the scale, and good advisers should not be backward in coming forward to highlight how they differ, and how they are better placed to ensure a much better chance of completion or at least a smoother journey.




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