For this week’s Marketwatch, our commentators are:
Lea Karasavvas, director, Prolific Mortgage Finance says advisers should rise to lender’s higher expectations on the quality and accuracy of mortgage paperwork. This is the adviser’s chance to shine.
Dominic Lipnicki, director, Your Mortgage Decisions says if advisers are finding it tricky dealing with lenders, consumers must be finding it even harder.
Terry McCutcheon, CEO, Finance Planning Group
Lenders are well within their rights to insist on good quality mortgage applications and any broker that is scared to submit business to a particular lender probably only has himself to blame.
Lea Karasavvas, director, Prolific Mortgage Finance
If cases are being rejected I would argue it is because the brokers did not have a full comprehension of the lenders underwriting criteria. The quest for quality is certainly higher, and lenders are requesting signficantly more documentation than we have been used to in the past, but the underwriting criteria and speed of a lender is yet another variable that a broker must consider when giving mortgage advice. Some lenders are well known for requesting everything down to the inside leg measurement of a client, but rather than being scared of submitting cases I think brokers would choose to omit these lenders only on time sensitive transactions such as quick exchange requirements, but would continue to submit cases on other less time restricted transactions such as remortgage cases.
The packaging of a case has never been more key than it is right now, but it is a brokers job to gauge the correct lender as well as the best rate. I don’t see this as a fear of submitting cases, I see it is management of the clients expectations and mortgage brokers demonstrating their knowledge in the market. Ultimately, you cannot fit square pegs into round holes and if poor quality is the reason for a case being rejected then the blame predominantly lies with the broker for submitting it to the lender in the first place. “
Dominic Lipnicki, director of Your Mortgage Decisions
I agree with Gemma Harle that some brokers will be put off submitting mortgages to particular lenders due to fear of rejections. However I do not believe that this reluctance to submit cases can be justified. Lenders are understandably jumpy in the current climate and the fact that they are increasing the number of hoops for applicants to jump through should come as no surprise to brokers. The key is to adapt to the changes and keep fully up to date with criteria, trends and lender preferences. After all, if we are finding it more difficult to get the green light imagine how much more of a challenge it is for the general public. It can only be a positive thing that more clients need our professional advice.
We must ensure that these clients can make informed decisions and are aware of any service issues related to specific lenders. If a particular lender has a tendency towards long delays in processing for example, this will not suit clients who are on deadline to complete a purchase quickly. Finally far too often incomplete or inaccurate applications are submitted and these are justifiably rejected. Keep standards high and you will have no need to fear the lenders.
Terry McCutcheon, CEO, Finance Planning Group
Lenders are well within their rights to insist on good quality mortgage applications and any broker that is scared to submit business to a particular lender probably only has himself to blame.
As part of the Legal & General Mortgage Network, we have rigorous systems and controls in place to ensure that all submissions are good quality. We have a duty to our clients to do the absolute best for them, and submitting applications is part of that service.
Over the past couple of years, lenders’ appetites for risk have hardened significantly and it is crucial to prepare clients and their cases carefully. We call it getting them ‘mortgage fit’. This means all the budgets, finances and paperwork must be spot on.
It’s in times like these that mortgage brokers really earn their money and prove their worth. We meet with lenders on a regular basis to discuss submissions and any issues that may be cropping up, which we then feed back to our advisers. We feel that this collaborative approach demonstrates to lenders that we are on top of things and ultimately it helps us give a better service to clients.
