Intelligent automation can help brokers help lenders
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Mortgage Strategy’s recent cover feature entitled ’Fit for purpose’ (January 23) listed ways in which brokers could improve the way they submit cases to lenders.
The reasons given by lenders for delays ranged from inaccurate information from borrowers to brokers failing to think like underwriters and underestimating the amount of documentation required.
In response I’d argue that it’s vital for lenders to give brokers intelligent automation in the sales and origination process which caters for grey cases as well as those which are black and white.
They also need to provide appropriate human intervention when required.
There are a number of straightforward application strategies that can reduce wasted time and effort and failed applications.
Checking addresses early in the process cuts the number of referrals and fails.
“Brokers need intelligent automation for sales and origination which caters for grey cases as well as the black and white ones”
Simple changes in data capture could ensure relevant information only is captured - and only once - and is gated so that full mortgage applications are properly filled out.
Where documentary proofs are required, simple scan and attach options make it easy for the intermediary and if intelligently routed to the relevant originations teams reduces delay.
Building in affordability in the main process rather than relying on brokers using a standalone calculator means they know before the full application whether their client can afford the loan.
Finally, as others have commented, communication is key and that means sales systems need to communicate as well, in a conversational way, by signposting lenders’ processes from the initial enquiry to offer and completion.
Henry Woodcock
Profiteering seems to be motive behind lenders’ rate hikes
I follow the progress of LIBOR, swap rates and gilt yields daily to try and get a grip on what’s happening to rates in general, in a vain attempt to second-guess lenders’ rate setting.
I was pleased to see three-month LIBOR relaxed to 1.081 last week, down from its recent peak of 1.089.
We often hear lenders trotting out the excuse of the cost of funds as a reason for them to increase their tracker rates.
Swap rates are historically low across the board and the current crop of fixed rates bears no relation to this at all.
Three-month LIBOR has increased by less than 0.10% since November 1 last year.
Imagine my surprise to learn that both Abbey and Nationwide are increasing rates again, following similar moves from the other major players.
Halifax hasn’t got any decent rates anyway to be honest, so it doesn’t really count.
But my big question is, how can this be? Is the market that busy at the moment?
One of my colleagues whispered the word profiteering to me, which might sound a bit harsh - but is it?
The stock response to lenders increasing their rates will be the usual cost of funds excuse, but the figures above disprove that.
I can’t wait to hear the latest lame one.
Simon Collis
Mortgage consultant, Chadney Bulgin
Apology for one-page statement on bank probe is not enough
I was interested to read last week that Financial Services Authority chairman Lord Adair Turner has admitted it was a mistake not to initially publish a full account of the regulator’s investigation of the events that brought the Royal Bank of Scotland to the brink of collapse.
The FSA published a one-page statement on concluding its investigation into the failures of RBS in December 2010, which found no grounds to take regulatory action against RBS senior management, including former chief executive Sir Fred Goodwin.
Doesn’t that say it all? Savings, pensions, jobs - all gone. Yep, a one-pager should have done it. What a sad state of affairs - with a regulator like that we don’t need enemies.
Nikki Turner
FSA chiefs are as bad as RBS - the blind are leading the blind
Lord Adair Turner has admitted that it was a mistake to initially publish a one-page statement on the collapse of RBS, but saying sorry after the fact again puts the FSA in the same light as the people running RBS.
Why would anyone have greater confidence in Turner and FSA chief executive Hector Sants when they are so similar in thought to the processes that failed to hold anyone accountable before? Granting new powers is only effective when they can be implemented.
It is the blind leading the blind in circles, with no-one accountable for anything.
Name and address supplied
Halifax claim that it’s cheaper to buy than rent doesn’t add up
Halifax last week argued that buying a home is over £100 a month cheaper than renting in the UK.
Its buying versus renting review showed that the typical monthly cost of buying a three-bedroom house was £600 in December, 16% cheaper than the average rent of £716 on the same property type.
But assuming a buyer gets a 90% LTV mortgage at 4.5%, a monthly repayment of £600 per month will service a £110,000 loan.
Adding the 10% deposit, this gives a figure of £122,000 for a three-bedroom house.
Can someone tell me where in the UK I can buy a three-bedroom house for £122,000 and get a job paying £31,500 so I can get a £110,000 mortgage, assuming of course that I have a £12,000 deposit?
Name and address supplied
Underwriters can be shockingly remiss when deciding cases
At the end of a letter last week on the change of access to underwriters that Barclays has given brokers, Grey-Haired Underwriter commented that brokers find no to be the hardest word and can be persistent to the point of rudeness.
I usually find Grey-Haired Underwriter’s comments amusing, enlightening and balanced, but sadly he seems to be labelling all brokers as rude and bullying here.
It is a pity there aren’t more Grey-Haired Underwriters left. I find most underwriters now have little idea about how to review a file and unless every box is ticked they cannot make a decision.
In fact, this works against lenders. I have often had to point out detrimental issues such as bank statements confirming hardcore overdrafts and items being returned unpaid when the underwriter had passed the case because they could tick the box that says ’bank statements seen’.
Seen maybe, but not read. While I could have used this to my advantage, as a responsible broker I could not let it go through without pointing out the deficiencies.
Seagull
On reflection, those awkward advisers are fairly rare beasts
To Seagull - my apologies, I had just finished with a particularly rude broker and was reading some of the comments to calm down.
Unfortunately I let the bias from that phone call feed into my response to Barclays’ move and should say that single-minded brokers do tend to be in the minority and create a nuisance far larger than their profiles deserve.
I was reminded of this by a call last week where a broker let me know that he was concerned about part of a case and didn’t want us to tar him with the applicant’s brush.
I must learn to temper my comments with balance.
May I also say how much I agree with your sentiments about the machine minders that now pass for underwriters. The concern there is whether they have the experience to know the good from the bad and how they will react to direct broker contact.
Grey-Haired Underwriter
Market conditions do not offer any prospect of house price rises
In his recent column Robert Winfield, operations director at Chartwell Funding, argued that house price rises could be on the cards.
But look at market conditions and it is hard to see any difference between January 2011 and 2012.
Buyers still need a big deposit - higher LTVs are creeping in but the underwriting is nigh on impossible.
Big deposits get better rates and direct lenders are trying to cherry-pick the best clients.
Prices may rise this year but I feel this will be reflected on investment properties as buy-to-let soars in 2012 just as in 2011.
You will also see first-time buyers missing opportunities as investors and landlords buy up property to boost portfolios - hence a slight increase in house prices.
Name and address supplied
Chavs ignores TV show’s demonising of all social classes
I was interested to read your recent review in Mortgage Strategy of Owen Jones’ book Chavs - The Demonization Of The Working Class but found the book one-sided.
The author used examples to support his argument in an unbalanced way. For example, he cited the Vicky Pollard character from Little Britain as an example of how the media demonise the working class but failed to mention that Little Britain demonises the middle and upper classes as much.
Indeed, if the programme had no working class characters, would this not have supported his argument more by ignoring the working class completely?
The book is hardly Marxist dogma, but it is a little too close for comfort for my liking.
Name and address supplied
Hester should keep bonus for turning failing bank around
RBS chief executive Stephen Hester’s decision to hand back his £1m bonus is ridiculous.
From what I can gather he’s turning the business around - which was already failing when he joined.
And he’s from the private sector so I imagine he’s being paid the going rate for someone responsible for a large organisation.
Simon Bucknell
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