Harle, managing director of Tenet Lime, (pictured) told delegates at the Mortgage Business Expo in London today that brokers need to be aware of the key metrics used by lenders to measure their performances.
“The metrics that lenders use to measure brokers include random sampling, levels of application to offer, DIPs to applications, number of referrals and the quality of applicants.
“These things matter to lenders because every DIP costs money and they start to think maybe the broker doesn’t understand the criteria if cases aren’t going through. A lot of brokers are being struck off by lenders.”
But Harle added that brokers are increasingly being penalised in fee-terms for submitting cases which meet all the criteria set by lenders, but are below average quality. She said that the industry must not take the search for quality too far.
“The hunt for volume has been replaced by search for quality. Firms being penalised for quality of business could simply be firms who are submitting a lower than average quality of business.
“But we must not go too far as an industry. There are times when it is right to DIP with multiple lenders. You could get a situation where if a broker has a few below average cases you are scared to place them with a certain lender in case you get a black mark against your name, even if they meet all the criteria.”
Santander became the first lender to pay advisers based on the quality of business submitted based on a series of metrics. Lloyds Banking Group is also considering a similar approach.
