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Mortgage offers issued in five days double as lenders focus on speed – IRESS

  • 11/10/2018
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Mortgage offers issued in five days double as lenders focus on speed – IRESS
More mortgage cases are being completed faster as lenders put an increased focus on using technology to improve the process, research from Iress has found.


The technology provider revealed that the proportion of mortgage offers being issued in five days or less had doubled from 5.3% to 11.2% in the last year.

While the percentage of cases offered in ten days or less remained largely unchanged at 30%, half of offers were made in 14 days or less and 83.5% in 30 days or less – both improvements on 2017.

Iress principal mortgage consultant Henry Woodcock (pictured) noted that this is down to the adoption of automated valuation models (AVMs) and access to customer bank records.

“We’ve seen across all types of lenders there’s been an improvement in that space,” he told Mortgage Solutions.

“The doubling of offers within five days is from a shift back on to lenders using AVMs where they can. They were only doing so on their back books but now they are also using them on the front end.

“And if they can get borrower income and expenditure electronically then some lenders can get offers within minutes and I think that will increase as more lenders use those services,” he added.


Lender confidence growing

Woodcock also noted that lenders were becoming more confident in using new technology with the regulated environment of the mortgage market and this was having an impact too.

“A couple of years ago lenders were so worried about getting things wrong they were almost triple checking everything, rather than just following sensible processes,” he continued.

“Now there’s a reliance and trust in some of the technology that wasn’t there before.

“Not every case will be able to be done in five minutes or five days, but there’s no reason why a lot of cases can’t go really quickly through the system, especially as the regulator is allowing firms to try out things which are streamlining the rules,” he added.


APIs still some way off

The Iress Mortgage Efficiency Survey found that application programming interfaces (APIs) are also likely to play a significant part in the development of mortgage technology.

However, while the benefits of APIs have been claimed for the last year, development has been slow in the mainstream market and Woodcock agreed it might take time until the results show through.

“It’s going to be another six, 12 or 18 months before we see that coming through, but every lender we talk to wants to know are the APIs open to enable them to talk to lots of different providers?” he said.

The survey found (55%) of lenders are looking at APIs to cut time and costs and half (50%) expect the technology to provide the most transformative efficiency gains over the next three to five years.

This coincided with 62% of lenders investing in mortgage hub technology to help connect up the overall mortgage and house buying journey.


Voice activated services

Open Banking has seen slower take-up, largely reserved for those in the initial phase, and lenders believe there may not be much to gain past assessing income and expenditure, Woodcock noted.

However, this could be a bigger gain for customers who use Open Banking enabled services, he added.

In more unusual avenues, 46% of lenders admitted they were actively reviewing or planning to implement voice activated services.

However mobile technology as a whole is far more ubiquitous with 86% of lenders already implemented or considering offering mobile services to mortgage applicants, while 52% were reviewing, likely to implement, or implementing instant messaging for both consumers and intermediaries.


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