With lenders now firmly ensconced in the downward spiral or pricing, pulling and re-pricing – sometimes in the space of a week – it is entirely understandable that brokers’ frustrations are beginning to boil over.
How can brokers give professional advice to borrowers when the products they recommend are pulled with minimal notice? Many brokers understand the commercial issues that have led to the tightening of credit and the global lack of liquidity – well, they should if they have been reading Mortgage Solutions for the past 18 months -but there appears to be little sympathy for the ‘plight’ of lenders when they repeatedly withdraw products leaving brokers with hours, not days, to collate all the information and get applications in. From the evidence of our postbag, there is a definite feeling lenders have made huge profits for the past few years and should have been more careful with their lending.
As it stands, it is the adviser who has to appear in front of the client and apologise for not being able to deliver on their promises. It is the adviser who looks unprofessional, not the lender.
An open letter from a group of distributors appealing for compassion for lenders from brokers because of the situation they find themselves in – where their daily cashflow is being scrutinised by the FSA, and their lending policies are being dictated to them by external factors – has been met with derision. Yet some brokers have acknowledged it has merit, agreeing that this is the situation we find ourselves in and it won’t do any good to complain about how it isn’t fair.
While it is an unprecedented step for distributors to come together like this – and equally unprecedented that we find ourselves dealing with ‘now you see them, now you don’t’ product ranges – all we can do is accept the situation and look for a solution.
Ratcheting up prices, tightening criteria and a hair-trigger attitude to withdrawals are only ever a short-term measure. We need to look for how we can make this work for lenders, brokers and borrowers. Suggestions such as those made by Stephen Smith from Legal & General have merit and deserve serious consideration if we are to avoid making a bad situation worse. n
