So this week, Mortgage Solutions is asking: Do you think brokers could be given more control over certain aspects of the mortgage process? What could be the benefits and downfalls?
The more control the broker can have the better. I won’t come down negatively on anything that will speed up processes in a market which is still very much under the influence of the pandemic.
However, like all good tools, these things should be used with caution. We can look at these things positively and negatively. Is it a way of the lender passing on responsibility rather than control? Will it create more work for the broker?
What brokers need are lenders that can take work away from us.
Is the system going to come with all the relevant warnings? Will brokers let clients know that if this doesn’t go through, they might not be entitled to any refund?
I’ve come across stressful cases that have been going on for weeks and weeks and the lenders say they will pull out if the valuation isn’t instructed. When I go back to the client and tell them it’ll cost £400 to get one done, they say ‘no’. They only want to do it with the confidence the mortgage has been approved.
Is this protecting clients? You might get brokers who say let’s just instruct the valuation now. Without relevant warnings in place, the clients might be disadvantaged.
Progress is a positive thing but this could be open to abuse.
Most brokers put their clients first but there are a small percentage who may not and this could result in more complaints from customers.
What we need is faster underwriting, rather than these kinds of tools.
Rather than more control over the mortgage process, most brokers would prefer the current process to be slicker and faster.
That said, it may be useful to share some elements of the process with lenders. The main reason for brokers to get more involved, is to help speed things up.
The move from Pepper Money to allow brokers to book valuations is a positive development as it is clearly designed to help progress cases quicker.
It is, however, unlikely to make a significant difference to the time the overall process takes. The step that takes most time is usually conveyancing, an area that brokers are unlikely to have much direct influence over.
One potential danger in allowing brokers to control more of the process is the potential for more fraudulent activity to slip through the net.
There is a huge increase of attempted frauds due to the pandemic, with forged payslips, P60s and fake identity documents being worryingly common. It makes sense for lenders to stay in control of this side of the process as it can be incredibly difficult to spot.
Lenders have established departments with sophisticated fraud detection teams, so while brokers always play their part, they are unlikely to be able to do so as well as a lender can.
One area where brokers could get more involved is in the credit checking of clients. Most brokers already have systems in place to check their clients’ credit, so agreeing a recognised and trusted system could streamline this process.
In the future, what we may see is technology enabling more efficiency. It will require an increased element of trust between lenders and brokers, but it may result in the effective streamlining of some elements of the process.
We welcome the initiative Pepper Money has introduced.
We have a large number of clients that state they would like the valuation instructed immediately on application because it may be an auction purchase or they have agreed a completion date with the vendors agent to secure a lower offer price, for example.
We do inform the clients that the cost of the valuation is not refundable if for any reason the mortgage lender does not issue a mortgage offer.
Having said that, many lenders are now offering a hard check at the decision in principle stage and this gives the client further reassurance in securing the mortgage first time.
As brokers we appreciate the volume and pressure some lenders are currently facing and as a result, we would welcome other lender initiatives and dialogues to support and provide them with any support we give them to underwrite and provide a decision on the first day of underwriting.