Robert Sinclair, chief executive of AMI, said: “We have been having discussions about how well the MMR has landed and clearly there have been words around how different lenders have interpreted the affordability requirements.”
Last month Martin Wheatley, chief executive of the Financial Conduct Authority, said in response to a Mortgage Solutions question that it was in talks with lenders which were being ‘too assidious’ in their assessment of a borrower’s affordability.
But Wheatley said it was too strong to say that lenders’ overzealous underwriting of borrowers’ expenditure was an unintended consequence, as brokers had suggested.
He said it was more accurate to refer to it as a ‘teething problem’.
Wheatley brushed off the severity of the issue, which triggered a flood of broker comments to Mortgage Solutions about instances where lenders had nit-picked over trivial expenses causing delays and stress to mortgage customers.
Dominik Lipnicki, director of broker firm Your Mortgage Decisions, wants to see the current fragmented approach joined together.
“Why don’t we have a universal budget planner? A broker will know that as long as they ask certain questions they could be confident that they have covered everything the lender wanted to see. That would make total sense.
“But instead what we have is a totally fragmented market with different ways of looking at things.”
Lipnicki said that while all lenders had different exposures to risk and different niches, some uniformity would help.
But Sinclair said it was these difference which allowed a broker to show their worth to the customer.
“If a customer tried to find their way round this it would be impossible which is why intermediaries exist,” he added.
Steve Smith, AMI board member and mortgage consultant for Springtide Capital, agreed that the complexities and variances of lenders’ approaches to affordability offered brokers an opportunity to attract more clients.
“The range of lender approaches give the broker more value to add to the offering since we typically know what lender to use in which circumstance.”
Smith said if a universal budget planner were introduced it may result in more questions rather than less.
“Can you imagine what it would like? My guess is that it would be a lot longer than most of those being used today,” he said.
A spokeswoman for the CML said: “Individual approaches by lenders to affordability assessments, in line with FCA rules, are not a matter for the CML.
“However, as the MMR beds down we have fed back in general terms to our members that brokers note there are differences between lenders. It is early days, and it will not be surprising if practices continue to evolve as the new regime beds in.”
AMI plans to meet with the CML later this year to discuss how the market has moved on.
