This week Nationwide announced it was introducing an optical character recognition tool for mortgage affordability assessments, which it claims automatically verifies information on documents like payslips.
The mutual suggested that the technology will enable it to speed up affordability assessments by at least 24 hours, with the system set to be rolled out across all document types in the coming months.
Nationwide noted that with the ability to assess thousands of payslips automatically each week, it allows cases to be underwritten and offers to be made much more quickly.
Solving a problem that isn’t there
Stuart Powell, managing director of Ocean Mortgages, noted that Nationwide already had a strong process for getting a mortgage offer to the client, solicitor and broker quickly.
He added: “They are potentially solving a problem that wasn’t really there.”
Powell noted that the biggest delays in the mortgage process tend to be with the time taken to get the valuation completed, and with the legal work after the offer has been sent, arguing this is where lenders need to focus their efforts.
Stuart Gregory, managing director of Lentune Mortgage Consultancy, said that Nationwide’s technology upgrade was to be welcomed as lender processing times can cause great frustration for brokers and clients alike if documents have been supplied just after application yet the process drags on.
However he cautioned: “Nationwide needs to ensure that any queries over document content are highlighted in the right manner. In the past I’ve noticed that they reinstate a document requirement without contacting the broker and giving a reason why, leading to brokers having to follow up by phone to clarify.”
Whose tech makes a difference?
Gregory pinpointed Halifax as a lender that has made great strides in improving the uploading of documents, noting that its previous system was “cumbersome in comparison to its new process.”
Carmen Green, a mortgage adviser at Xpress Mortgages, agreed that Halifax’s upload method was excellent, noting that it allows brokers to upload documents directly to the case then call through to the team who will review them straight away, often resulting in the documents being verified there and then.
She added: “If there’s any issues they will stay on the phone to discuss them with you and if they require further documentation they will wait while you upload them. It saves the to-ing and fro-ing. They also instruct the valuation straight away so a well packaged case will usually offer within a matter of days.”
Where lenders can improve
Powell pointed to introducing cashback rather than free legals as one successful way lenders have sped up the process, as the client has been able to choose the most efficient local solicitor.
“Automated valuations are also a bonus, especially when local surveyors are struggling with holidays and absence of their team which delays actual surveys,” he added.
Green noted that case ownership can have the biggest impact on how quickly a case is assessed and approved.
She explained: “Having a single case owner proves more efficient as they see all aspects of the application. Some lenders have underwriters assessing individual documents which can cause delays as they don’t see the bigger picture.”
Learning from equity release
Powell praised Accord, Santander and Scottish Widows, as well as Nationwide, for being lenders that act quickly with cases.
However, he noted that compared with equity release lenders, residential lenders were often much slower.
Powell continued: “This could be due to the additional processes – affordability and credit checks for example – but also because the equity release lenders’ processes and technology seem geared up towards a faster completion.”