Six of the society’s most senior managers consider a handful of mortgage broker new business enquiries and live applications.
They are the unusual cases, the kind rejected automatically by mainstream lenders.
Each case will be advocated for, the particular circumstances considered, and a decision reached.
It means an intermediary can call in with a niche enquiry at 11.30am and receive a yea or nay by 4pm that same day.
The genesis of the committee lies in our history as a specialist lender and I would argue that some building societies are the original specialist lenders.
In recent years we’ve been using our agility to serve those parts of the mortgage market not sought by the mainstream.
With manual underwriting and without credit scoring, we’ve been serving the under-served.
We recognised that if we were going to scale-up looking at the detailed circumstances at an individual level it would be unreasonable to put that on the shoulders of single underwriters.
Instead we could turn to the collective experience of authorised senior decision makers in the society. And so the Mortgage Referrals Committee was created.
Those that cannot be categorised
Established approaching a year ago, the committee is our chief executive, deputy chief executive, operations director, head of mortgages, mortgage services manager and myself.
Underwriters also attend, as can members of the business development team and the processing team.
Since renamed to the Mortgage Possible Committee (MPC) to tie in with a marketing campaign we’re currently running, it serves individuals with needs that cannot be easily, or at all, categorised. Their circumstances are completely personal to each individual case. What are basically robust but unusual cases get a fair hearing.
The MPC has examined approaching 2,000 cases – some come back with more information and some come during mortgage processing if a live application hits a bump in the road.
In five to 10 minutes, decisions are reached by consensus. The committee doesn’t just say yes or no, the members also explain why.
The approval rate is 87% and I can confidently say that the MPC has approved cases which before its creation would not have been successful.
Not getting riskier
Such specialist lending is not about going up the risk curve – it is not necessarily riskier.
It’s about considering the case on an individual level, asking more questions, doing some research, understanding it better and being more nuanced.
Real life examples include: a junior doctor starting a 12-month training contract; an army officer who doesn’t own his own home wanting a buy to let; a mid-construction self-build; a landlord refurbishing his three empty properties; business owners seeking to expand by raising capital on their home; and a couple whose income streams included a Self-Invested Personal Pension (SIPP) and Personal Independent Payment (PIP) benefits.
The MPC is now an integral part of our working day, lasting up to an hour.
Intermediaries like it – they know their customers are being given a hearing by a committee of experienced people and not just a sole underwriter.
Through the MPC, we believe we are creating more opportunities for customers to achieve positive outcomes.