Rewind Wednesday – Mortgage Administrator Ivent: Part II
The next two presentations focus on product criteria evolution during the pandemic, and how the protection space has developed. They are:
Understanding the evolving product criteria mix
Jason Hegarty, founder of Criteria Hub
In this session, Jason Hegarty outlines the vast scale of changes to lender criteria since the Covid-19 pandemic began and how to keep up to date with those changes.
He also discusses how these changes impact on client conversations and the advice process for adviser colleagues?
Sector focus: protection and GI
Andy Walton, protection proposition director, Mortgage Advice Bureau
Here, Andy Walton asks why is it particularly important now that every customer receives protection advice and why are some customers choosing not to take it?
He also delves into the role of administrators in making sure that customers have adequate cover and the importance of client communication and reminders and liaison with adviser colleagues.
The Mortgage Administrator Ivent 2020 is now accessible on demand for free to all mortgage administrators via the following registration link: https://www.mortgagesolutions.co.uk/events/mortgage-administrator-ivent
Mortgage Brain launches lender service level tracker
It covers the residential and buy-to-let markets and includes metrics on call waiting times, live chat and application processing times.
The data will be updated mid-morning every working day and will be available through the Covid-19 support hub area on the Criteria Hub website.
The technology firm said the service “collates information from multiple lenders’ websites and provides a single source for advisers detailing how long various lender processes are likely to take, helping both advisers and lenders to manage expectations.”
It noted that the housing market was seeing raised activity levels, with many lenders receiving record volumes of applications, but this was having a knock-on effect on lender service levels.
Neil Wyatt, sales and marketing director at Mortgage Brain, said: “With the unprecedented levels of applications and requests, lenders are doing their utmost to cope with the demand on their operations.
“It is apparent through conversations with intermediaries and lenders that transparency with regards to expected service levels is vitally important to all parties.
“Providing brokers with a single view of lenders’ service levels will save brokers time visiting multiple websites and at the same time help provide valuable information that allows all parties to be absolutely transparent when making recommendations and setting clear expectations.
“It will also support lenders by setting broker expectations to avoid any unnecessary calls to processing teams or helpdesks for updates when it is clear that it is unlikely to have been reviewed as this may help some lenders free up additional capacity,” he added.
Underwriting time has quadrupled under lender pandemic strain – iVENT 2020
Speaking at the virtual conference iVENT 2020 , Hegarty said a lender had alerted him to the new timescales as a spike in activity added to the pressure already on firms tackling changes in borrowers’ financial situations.
He said: “That’s a huge difference [in timescales] and that’s a real strain on the capacity of how many cases an underwriter can look at in a single day.”
Hegarty said the additional information required by lenders was drawing out the underwriting process. Where 18 months of income would have been enough before, it does not tell a lender how a business is performing under current circumstances.
How to navigate lender delays
Hegarty said brokers could combat issues around service levels by thinking like an underwriter when submitting an application and giving as much detail as possible.
“The more information you give an underwriter the better, if not they’ll just ask for it anyway.
“You can ensure there is no delay as a result of something you’ve done. When you fill in an application, fill them in 100 per cent completed. Don’t leave any ‘to be confirmed’ address fields, it’s just going to cause a delay,” he said.
Hegarty also suggested brokers log all conversations with lenders in case it needed to be referenced later or used to defend a complaint.
He said brokers should ask clients how quickly they wanted to receive a mortgage offer so they could make informed decisions about which lender to choose.
Hegarty said: “Now is a really good time to understand what service levels are. There’s nothing wrong with excluding or including a lender based on their service levels.
“If time is really important to a customer, that’s a really good justification for why you’ve chosen a particular lender even when they don’t have the best rate.”
Mortgage Brain launches coronavirus information centre
The reference centre by is free of charge and can be plugged into ‘coronavirus hubs’ that have or are being set up.
It comes as advisers have had to grapple with significant changes across the industry since the outbreak of Covid-19.
There been a dramatic reduction in the number of products available, as well as an overall tightening to a number of criteria.
The new section on Mortgage Brain’s Criteria Hub site features three data feeds, with the first covering 19 frequently asked questions about lender policies.
The second feed is updated daily and features specific product changes from lenders, while the third feed consists of industry news stories provided by Mortgage Solutions.
Mortgage Brain is the parent company of AE3Media, publisher of Mortgage Solutions.
Intermediaries will not be required to register to access feeds, and do not need to be current users of Criteria Hub.
Richard Merrett, head of strategic development at Simply Biz Mortgages, said: “We are delighted to partner with Mortgage Brain in delivering a criteria, product and news feed to keep advisers informed as the market responds to the current challenges.
“The ability to capture all of this information in one place is a fantastic support resource to help with client solutions, and will save considerable time and effort in the research process.
“This fits perfectly with the ethos of our recently launched SimplyBiz Mortgages Solution Hub and will be crucial in allowing advisers to spend more time on helping more customers and creating as many good outcomes as possible.”
Mark Lofthouse, chief executive of Mortgage Brain (pictured), added: “The mortgage landscape is moving at a rapid pace as a result of the pandemic, with intermediaries having to keep on top of vast numbers of product and criteria changes on a daily basis.
“We are committed to easing that burden by developing this single point of reference, arming them with the information they need to continue providing the advice and guidance which borrowers rely on.”
Mortgage Brain suspends selected fees to support industry
The firm’s sourcing platform Criteria Hub will be available to new customers at no cost for at least 90 days.
Lenders will be able to make the platform available to their business development managers (BDMs) for free to allow BDMs to update advisers while working remotely.
Mortgage Brain is also in the process of updating Criteria Hub with new coronavirus-related criteria.
In addition, intermediaries using the desktop sourcing system MortgageBrain Classic will be able to have either the online sourcing solution MortgageBrain Anywhere or another laptop licence for MortgageBrain Classic for at least 90 days, at no additional cost.
These measures have been put into place following lender and broker feedback.
Mark Lofthouse (pictured), CEO at Mortgage Brain, said: “At a difficult time like this it’s vital that we come together as an industry and do all we can to support each other.
“Borrowers still need the expert guidance and advice that intermediaries provide, and we must ensure advisers can continue to provide their services without additional financial concerns.”
“Changes to working practices are being introduced at pace and we are doing all we can to help the industry alleviate these stresses and strains as they become apparent,” he added.
Criteria Hub expands search options
The newly added criteria include BTL with refurbishment needed, BTL unemployed applicants and residential and BTL with escalating ground rents.
The new terms are additional to 700 existing criteria that provide 45,000 searchable lender entries. They expand niche criteria and existing searches, it said.
The changes were made largely based on feedback from advisers and lenders.
Criteria Hub was acquired by Mortgage Brain in March 2019, and the technology firm reported use of the system had grown by 70 per cent in the six months following the acquisition.
“Access to specific lending criteria is becoming even more vital because vanilla cases are no longer the norm,” said Mark Lofthouse, chief executive of Mortgage Brain (pictured).
“Brokers can now provide better advice and lender options to their customers. We recognise our customers’ input as integral to us to providing them with the systems they need.
“By expanding our search terms following feedback, we’ve shown our continued support for customers and our commitment to listen, invest and innovate,” Lofthouse added.
Mortgage Brain will finalise integrating Criteria Hub into its online mortgage sourcing system Mortgage Brain Anywhere and its offline system MortgageBrain Classic, in 2020.
Adviser firms currently using Criteria Hub include Countrywide, Fluent Money for Advisers, John Charcol, Mortgage Force, Mortgage Intelligence, Openwork, Online Mortgage Adviser, Tenet, The Mortgage Alliance (TMA) and The Right Mortgage & Protection Network (TRM).
Criteria churn is positive, but watch out for the regulator – analysis
Such a vibrant market may be good for clients, but it levels a serious challenge at brokers who need to keep up to offer the best advice and to stay on the right side of the regulator.
Only this month Robert Sinclair, chief executive at the Association of Mortgage Intermediaries, warned that the Financial Conduct Authority has its sights on brokers whose pool of lenders is overly limited.
Advisers have remarked on the volume of criteria changes in the later life, self-employed and buy-to-let segments — as well as a plethora of product updates across the market.
Double, triple check
Adrian Anderson, director at broker Anderson Harris, says it “certainly feels as if banks do seem to be forever changing criteria”, and that there has been a “relaxation of lending criteria on interest-only, with some banks being a bit more flexible on allowing older borrowers.”
He says that it’s “always a challenge for brokers to keep up with criteria which is why we want to speak with our lender relationship manager regularly, why business development managers (BDMs) from lenders often come to see intermediaries and why we read regular updates in the press and from lenders.”
Anderson is confident that brokers can keep up to date with marketplace churn if they research thoroughly, but says “it’s always at the forefront of our minds to make sure that the client is getting the best terms, based on their criteria.
“If someone wants a particular loan size, for a particular value or property, we always do our research, look at the cheapest lender and work our way down.
“Brokers double, triple check criteria with their relationship manager at the bank, or they’ll get their assistant to double check the research online, to make sure that we’re definitely going to the right lender for the right client,” Anderson says.
Lender policy visibility
On the research platform side, Mark Lofthouse, chief executive at mortgage technology and data company Mortgage Brain, suggests that the apparent high level of criteria changes has to do with the rising visibility of lender policies and product features over the past few years.
“It’s not so much that lenders are constantly changing their criteria, it’s more that criteria, over the past two or three years, have become more important to matching a customer to the products available,” Lofthouse says.
“If you go back, historically you were either a vanilla product or you were specialist. And that was it. Whereas now, criteria that lenders may always have had are available to brokers through platforms like Criteria Hub. Brokers are using them more, so there’s more visibility compared to in the past.”
Jason Hegarty, co-founder at Criteria Hub, which was acquired by Mortgage Brain in March, adds that this enhanced visibility across the mortgage marketplace has enabled brokers to transact more easily with a wider range of niche lenders.
“Brokers now have access to more lenders who accept, for example, borrowers who have been self-employed for only a year. We provide criteria from 10 or more lenders who accept self-employed borrowers of this type. That’s considered pretty niche, but yet there are a vast array of solutions available,” Hegarty says.
He adds that certain lenders may have relaxed their affordability algorithms in selected market segments during 2019, giving an impression that customers can borrow more.
And criteria platforms have contributed to standardising the language of lending so that it’s easier for lenders to communicate changes to intermediaries and to benchmark their criteria to see where they may be outliers in a particular market segment.
BTL criteria churn
As well as clues that lenders are tweaking criteria for older borrowers and the self-employed in response to changing work patterns, there is evidence that they’ve been tinkering with buy-to-let (BTL) criteria too, with taxation rules the driver.
Liz Syms, chief executive at Connect for Intermediaries (pictured), says that in this segment, criteria has become a key battle ground for rival lenders who may be restricted as to how low they can cut rates.
“BTL is dominated by the big high street names, which take a very significant share of the market. The remainder of lenders, of which there are many, and lots of new ones coming into the market, collectively are trying to get a share of that smaller part that’s left over after the high street has taken its bit,” Syms says.
“There’s a lot of competition between lenders. When their margins are too tight to compete against the high street on price, they tweak and improve criteria.
“That is one reason that you’re seeing such a change in criteria. For brokers, in terms of more choice, it’s the real bonus,” Syms adds.
Research, research, research
She points particularly to holiday let and Airbnb mortgages, where a lot of smaller building societies and bigger specialist lenders have brought out new products and tweaked criteria.
“That’s off the back of consumer demand because with tax changes, where mortgage interest is not deductible in full for higher rate tax payers, holiday lets or Airbnb, if run as a business, are not counted as BTL — even if held in someone’s name,” Syms continues.
“It’s treated as a commercial business for tax purposes and therefore mortgage payments can be offset against income before paying tax. That has increased the popularity of, and demand for, that type of product.”
She adds that a similar dynamic is at play in the segment for homes in multiple occupancy (HMO) products.
However from an adviser perspective, “it’s a lot of lenders and a lot of criteria to try to understand and navigate through, to make sure you are making the right recommendation to a client,” Syms says.
While the pros are about more choice for clients, the cons come in the form of brokers having to be extra careful about giving the right advice.
“There are more products and criteria than ever, even compared to before the credit crunch, and that creates a lot of work and a lot of pressure for advisers to fully research the market accurately. Brokers need to spread their wings and spend time with lenders to properly understand their offerings, because not everything is black and white,” Syms says.
While there is “no one system that does everything”, it’s beneficial to check criteria and then to research a shortlist within the sourcing system.
“There’s a risk that if brokers don’t open their minds to alternative lenders out there and research only from a narrow number of known lenders, they may be missing opportunities or making the incorrect recommendation,” she adds.
Lea Karasavvas, managing director of Prolific Mortgage Finance, agrees that overall the level of criteria churn has been positive for clients and for the health of the mortgage market, but that it does keep brokers on their toes.
“Criteria changes are the nature of the beast in the mortgage market, but we are seeing a lot of changes at present as lenders look to assist in many areas where they were struggling previously,” he says.
“There have been huge criteria changes in maximum ages on mortgage terms, with many lenders now going to age 80 and even 85 which assists older clients. These changes have been very positive, with people living longer and working longer.
“More changes in interest-only criteria continue to strengthen the market place and have also given people more options on how their debt is repaid,” he adds.
However, Karasavvas highlights that the biggest and most problematic change has been within the BTL sector “where it seems every day a different stress test is applied by a new lender”.
“The number of changes have become so frequent that many networks are now rolling out specialist licenses for brokers to transact in this field to ensure that they are on top of all the changes they continue to give best advice,” he says.
Despite the challenge to brokers from such a level of churn, Karasavvas concludes that “the majority of recent criteria changes have helped brokers to give a lot more options to borrowers and should be applauded.
“Lenders continue to be keen to lend, and while these changes are frequent, the majority are enabling us, as advisers, to perform our roles better.”
Mortgage Intelligence offers Criteria Hub alongside Mortgage Brain
As part of the agreement, the advisers will be able to use Criteria Hub alongside Mortgage Brain’s online and offline sourcing systems, and The Key, its point of sale and client relationship management system, as part of a complete, end-to-end mortgage sourcing solution.
The software has been enhanced to offer a unique way of highlighting any of their client’s multiple selection options that are critical or deal breaker.
Sally Laker, managing director at Mortgage Intelligence, said: “We’ve had a really strong relationship with Mortgage Brain over a number of years and this new addition to its proposition demonstrates its understanding and vision in the mortgage advice market.
“Like us, Mortgage Brain is committed to driving forward technology initiatives and solutions that deliver business benefits that make a real difference to mortgage advisers, lenders and customers alike.”
Mark Lofthouse, CEO of Mortgage Brain, said: “To receive the continuous endorsement from a company such as Mortgage Intelligence is testament, not only to our ability to deliver the best and most innovative systems proposition available, but the unrivalled levels of flexibility, adaptability and responsiveness that we offer to all of our partners.
“We’re incredibly proud of our position as the mortgage sourcing partner of choice with Mortgage Intelligence and were looking forward to continuing to work with them and their advisers as part of this new venture.”
Over 3,000 advisers are actively using Criteria Hub including Countrywide, The Right Mortgage & Protection Network, John Charcol, Mortgage Force, Mortgage Intelligence, Fluent Money for Advisers, Online Mortgage Advisor, Openwork, Tenet, TMA, and numerous smaller firms.
The Right Mortgage and Protection Network teams up with Mortgage Brain for criteria sourcing
Criteria Hub, which was acquired by Mortgage Brain last month, will be made available to TRM’s 450 appointed representative members.
This will complement the network’s current mortgage sourcing and CRM technology solutions, including MortgageBrain Anywhere, MortgageBrain Classic and The Key.
Criteria Hub uses innovative technology to help advisers quickly match the customer’s needs with those of the lenders.
Adam Stretton, managing director at TRM, said: “As a successful network our members rely on us to support them with the latest innovations and technology to help improve efficiency and enhance the service they offer their customers.
“By adding Mortgage Brain’s Criteria Hub to our current mortgage sourcing and CRM offering, our members now have access to the best and most complete point-of-sale and sourcing solutions available.”
Mark Lofthouse, CEO of Mortgage Brain (pictured), added: “We are delighted to be continuing and further developing a long and mutually beneficial partnership with TRM.”
“The platform’s extended multi-search functionality, with its ‘critical criteria’ selection option, will enable TRM’s members to obtain and identify the most suitable lenders in the shortest possible time, and enhance their customer’s journey.”
Criteria Hub update extends search and filtering options
Mortgage Brain has already started planning the integration of Criteria Hub into its point-of-sale, CRM and compliance system, The Key.
Mortgage Brain bought Criteria Hub in March and told Mortgage Solutions it had substantial software integration plans with wire frame development plans underway.
Mortgage advisers using Criteria Hub can select up to six specific search criteria at any one time as part of the enhanced capability, alongside the single searches already available.
Search criteria can also be highlighted as deal breakers for each case, for example, in the case of balcony or deck access.
Mark Lofthouse, CEO of Mortgage Brain (pictured), said: “Having the ability to identify specific lending criteria as critical from the outset, particularly ones that will affect client applications in part or full, allows advisers to offer the best possible advice solution to their clients.
“The extended multi-search functionality, with its ‘critical criteria’ selection option, will enable advisers to obtain and identify the most suitable Lenders in the shortest possible time and dramatically improving the overall customer journey.”
A video tutorial is available on the Criteria Hub dashboard offering a guide to the new features and functionalities.
Over 3,000 advisers are actively using Criteria Hub including Countrywide, John Charcol, Mortgage Force, Online Mortgage Advisor, Openwork, Tenet, TMA, and numerous smaller firms.
Criteria Hub will remain available to any adviser in the market as a standalone system or it can be bought as part of a package.
The criteria-based sourcing system has already agreed deals with Countrywide and Openwork for its advisers to access the platform.
The platform is also being used by lenders to research and gain insight into the market, enabling them to design and fine tune products to better meet the needs of customers.
Mortgage Brain Holdings Limited, formed in 1986, is jointly owned by Barclays, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Santander and Virgin Money.