Howard Reuben, founder of HD Consultants, stressed the importance of building a relationship with lenders to help them understand the story behind a case and not approach it like just another sale.
Reuben said as underwriters were likely under pressure due to a change in working habits, brokers had “to be professional and friendly even when things go wrong”.
He added: “Show them solutions, not have arguments. Once this case is gone, you might need them for future cases, so you’ve got to have that relationship.”
Reuben recalled how Ipswich Building Society pulled through for his clients based on the strength of their existing relationship.
The clients were a couple of 36-year-old first-time buyers who managed to save a five per cent deposit. Just before lockdown, they were approved for a 95 per cent loan to value (LTV) mortgage, despite one of the applicants having a blip on her credit score.
He found most lenders would not accept the case due to the credit report, which resulted from one missed direct debit for a water bill which was immediately put down as arrears.
“I had to go to the Ipswich because the case needed to be manually underwritten because of a credit issue with one of the applicants. It was a manual, old school all over the desk, broker talking to the underwriter saying, ‘here’s the story, what are your thoughts’ situation,” Reuben said.
“The wonderful people at Ipswich said ‘not a problem, let’s look at the whole picture. We understand the situation and we’re very happy to proceed with a mortgage application.’”
The case was provisionally approved, before being escalated to the head underwriter and surveyors were able to inspect the property.
The UK went into a lockdown to reduce the spread of Covid-19, and the owners of the property the clients were due to move into did not allow any extra inspections to take place. Furthermore, the sale of the property they were downsizing to fell through, and they were unable to go on viewings to find another property.
A new landscape
Six months after the mortgage offer was initially issued, the landscape of the market had changed and the 95 per cent LTV mortgage Reuben’s clients secured was no longer available.
The transaction chain had moved along with the reopening of the property market but just a week before completion, the offer expired.
“Ipswich honoured [the offer]. They said, ‘we know it’s nothing to do with the clients as the sellers were delaying things. Nothing has changed with their situation’.
“It’s down to the fantastic relationship my company has got with the Ipswich as well,” Reuben said.
He added: “They said ‘we want these first-time buyers to get their home’. They pulled through and I’ve now got a photograph which I sent to the underwriter of the day they moved in with the keys and big smiles on their faces.”
Reuben’s close alliance and constant communication with Ipswich worked in the clients’ favour so that when it came to extending the offer, as he said the society “didn’t bat an eyelid” about doing so.
“They know why I’m recommending them as a lender and their product, we’ve got a really good conversion rate with them as a result,” he added.
He also said it was easier to form these relationships with smaller and specialist lenders as often he knows everyone right up to the CEO.
This also gave Reuben some leverage when a property was given a zero valuation during a case with Foundation Home Loans. He said the surveyor reported the property as having no EPC after they failed to look on the appropriate website.
Foundation Home Loans eventually saw where the surveyor went wrong and put the application through.
Reuben said situations like this could work in the favour of brokers and allow them to show their knowledge in a way that provided solutions.
He said: “It’s all about having an understanding partnership.
“We get positive outcomes because we know what we’re talking about, but sometimes we have to direct surveyors and solicitors to the right outcome.”
“My advice to brokers is respect the bank, give them all the information up front, tell the story. Don’t just fill in fields on a computer because it doesn’t work like that,” he added.