HSBC does it again

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?