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HSBC does it again

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HSBC has once again claimed that it “accepts around nine in 10 of all customers who apply for a mortgage” - ha, ha, don’t make me laugh.

Actually maybe that’s a little disingenuous of me as to be fair, at least it is giving the impression of supporting the average mortgage borrower and its rates have been consistently attractive.

However, in making this comment while trying to put the proverbial boot into mortgage brokers who it clearly sees as an irritant, it is opening itself up to closer inspection.

If nine out of 10 people who go through its door get a mortgage offer that is brilliant.

If this is the case though I would urge everyone who needs a mortgage - first-time buyers, foreign nationals, the self-employed, those at high LTVs, those whose income is from multiple sources, who need a guarantor, who may have a little credit blip, who need to stretch beyond the published 4.5 x income multiples, etc to get down to a HSBC branch pronto before the queues get too long.

I have no issue with the fact that HSBC does not deal with brokers - seriously I don’t. Of course I would love it to and I even sent it a cheeky email recently asking it for a pilot, but what I do have issue with is the fact that a first-buyer or anytime buyer for that matter can take out the biggest debt they are ever going to have without getting any advice.

I think the reality will be more like this:

“Of the people we see that come through our door for a mortgage, who, after speaking to our mortgage ‘specialist’ to confirm they fit our published mortgage criteria and can demonstrate their affordability and have a clean credit score, who we then allow to actually complete a mortgage application form, around nine out of 10 receive an offer, perhaps not the exact offer they asked for, but an offer nonetheless.”

In truth, that is still pretty good given the market at the moment, but to give a blurred message without the full explanation when criticising others, is perhaps a little off.

So, dear HSBC, what percentage of the people who walk through the door, go online or phone up wanting a mortgage actually get the mortgage offer they asked for? I personally do not believe it is 90% – sorry, I just don’t. Also, how many clients accept that offer and go on to complete?

If it is true then why do, as the wise Ben Thompson, managing director at Legal & General mortgage club, says: “…direct to consumer only mortgage products make up just 19% of all the mortgage products available in the UK and HSBC’s direct only offering represents 2% of this direct only market.”

The statement from HSBC also said that “The bank’s strategy is that it believes it is best placed to sell its own mortgages and that lender and borrower need to deal with each other during the sale process to make the best lending and borrowing decisions.”

If the lender is providing independent advice then ok, but what if the best option for the borrower is a three- year fix and the lender only has a two or a five-year?.

Even more intriguingly, Peter Dockar, head of mortgages at HSBC, says: “Mortgage customers used to rely on brokers for the best deals but this is no longer the case.”

Unfortunately this shows a misunderstanding of what brokers do. There have always been direct lenders who sometimes offer the cheapest headline rates. Then the pendulum swung to brokers because lenders needed the volume and quality they provided, but that is still not the point.

The point is that mortgage customers have always relied on brokers to obtain the right deal for their circumstances.

If it was just always about the lowest headline rate, well then you don’t need me. Don’t worry about the fees, penalties, flexibility, portability, suitability, potential lifestyle changes, timescale, deadlines, service etc.

In fact, if HSBC really offer a mortgage to nine out of 10 who walk through the door, within the required timescale to secure the property, then I humbly apologise.

Anyway, never mind that I’m off there now to remortgage my 90% interest-only loan…er, sorry, what do you mean two years full accounts?

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Readers' comments (23)

  • I don't know why people keep saying that they can't send an application to HSBC. I have done a number of applications with them over the last few years and they were more than happy to take the introduction. Obviously in order to work this, the process for the adviser is slightly different, but it's still possible. You don't get a proc fee, but that's not important in providing appropriate advice.

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  • This made me smile, but actually it is a sad indictment of the reality. Banks care about the bottom line to the exclusion of all else. Brokers care about their clients and getting them the right deal, despite the obstacles thrown at them in the present climate.

    The sooner "execution only" mortgages are banned the better.

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  • Andrew, you are a legend, I love this article.

    We see so much tip-toeing around controversial but important subjects in this industry and your depiction of HSBC's claim is refreshing to say the least.

    Keep up the good work!

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  • Never had an issue with HSBC, I bank with them and I have always found their mortgage guys to be great whenever I have used them....oh, and if you have a 90% interest-only loan and you didn't have two years of accounts when you got it then I don't actually want you turning the bank I use toxic!

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  • Statistics can say anything you want. 100% of my cases complete (did I forget to mention that is 100% of my cases after exchange - must have slipped my mind - never thought it would change perception of my figures Doh!)

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  • Brilliant response

    PS Do not tell them you have a property in the background as this will cause their back office system to explode.

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  • If HSBC's "direct only offering represents 2% of this direct only market.” And they have achieved an 11% mortgage market share then surely their Product Suite must be extremely competitive and attractive to the average consumer. Article has a taste of sour grapes to me

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  • ha ha, where is the 'like' button.

    I have been introduced to several clients in the past where they have been honest and up front that they have an appointment with HSBC. On every occassion i make sure they keep that appointment and see me afterwards. Regardless of rates on offer, every single occassion i have gone on to secure the business and each time the client without prompting say what a much higher level of service they received with me. I am more inclined to say from my own humble experience that 80%-90% of all clients who approach HSBC in fact come away empty handed.

    Dear HSBC, please carry on driving clients estimations down and making us brokers look better than we are!

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  • I really don't know why HSBC are even mentioned or discussed within the mortgage intermediary side of the industry, likewise I still can't fathom why Mortgage Strategy interviewed their head recently.

    All HSBC seem to do is spout useless information such as them offering such wonderful deals etc - if they were that good then they would have had more success in the industry already. Yes, I'm aware they are big banking players and have increased their share of the mortgage market in recent times, however it very much looks like they've bought that at an initial loss with a view to going and selling more expensive products to people further down the line.

    As already mentioned, I don't know why we even bother entertaining them - as far as I'm concerned we should just ignore their useless and pointless PR pieces and get on with dealing with forward thinking individuals and companies who want to work together.
    Show them the same disdain they appear to show us!

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  • @Matthew, if 80-90& of your clients matched the last example in the article then I'm not surprised :)

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