According to a poll conducted by Mortgage Solutions with 95 respondents, just 16% thought that lender processing speeds had been maintained, compared to 84% who disagreed.
Tom Cleary, financial services manager at Start Financial Services, said many lenders had been unable to cope with increased demand generated by offering more competitive products.
“From a broker perspective there’s nothing more frustrating than a lender that cannot cope with the demand that they’ve generated themselves,” he said.
“Lenders come out with very competitive rates, they want market share, particularly within the last quarter where they’ve been trying to meet targets. As a result we’ll rush to submit all this business and the lender can’t cope, their service trips over.”
Cleary agreed that the slowdown was largely to blame on the tightening of affordability checks resulting from the MMR.
“What we see is cases going back and forth repeatedly between the underwriter and the case assessor. I would say the biggest lag on applications comes from lenders scrutinising bank statements more heavily,” Cleary continued.
“Overall, I think the slowdown is a combination of lower staffing levels because volumes are not as high as they were prior to the financial crisis. I think lenders are slightly behind the curve when it comes to staffing, I don’t think they’re recruiting fast enough.”
Robin Purdie, director of independent mortgage adviser Mov8 Financial, explained that the speed at which an application could be processed was crucial when selecting the right lender in the Scottish mortgage market.
In Scotland, the use of missives means that the entry date into the property will be stated to the borrower at the outset, thereby requiring the lender to process applications to meet that date.
Purdie added: “When sourcing a lender for a client, processing speed is one of the most important criteria points for us, simply because the conclusion of missives occurs sooner than the exchange of contracts. As brokers in Scotland we can’t really mess around with lenders that take six to nine weeks to complete. We need to know who is processing well and we tend to stick to them.”
Dale Jannels, managing director at All Types of Mortgages (AToM) said he had mixed views.
“Most of the specialist lenders are offering within a short amount of time, on submission of all of the required information. Yet one or two of the high street names can take an age, especially if they ‘rolling underwrite’ or it has to go to a ‘specific’ team. We have had one lender in the last few days ask for basic information that could have been requested after submission of the application eight weeks ago!
“I think we’re seeing some systems still reacting from the impact of MMR, yet others are already preparing for MCD. Somewhere in the middle, processing procedures and service timescales will take a hit. I’m just hoping that this is a short term issue. Although, with binding offers on the way, who knows where we will be come Q2 2016.”
