New lender entrants slated

GMAC-RFC has blasted new lender entrants for promising too much and not delivering.

It says that many new lenders have tried to break into the market with low rates but have failed to deliver on service, leading to backlogs and dissatisfied borrowers.

Jeff Knight, director of marketing at GMAC-RFC, says: “Some of these lenders should have known better.

“When you have a start-up you can have an advantage with technology but only one lender has followed our innovation on point-of-sale offers – the others have missed a trick.

“If they had invested in technology they would not be experiencing these problems.”

He adds: “Technology can enhance service. Packagers and intermediaries want to be confident that cases will be accepted, that offers will be made and cases will complete quickly. But some new lenders have betrayed this confidence.”

New entrant Advantage admits it had a “small blip” in service levels after the Bank of England upped the base rate in January but insists this wasn’t down to problems with technology.

Kate Huet, marketing director of Advantage, says: “We are confident about our technology. We are a LIBOR lender so when the base rate rose in January and other lenders pulled their products we were left at the top of the sourcing systems.

“We changed our rates as soon as we could but we wanted to give brokers a chance to get their cases in. There was some delay because of the volumes coming in but this was a short blip and wasn’t a huge problem.”

DB Mortgages, which has been re-peatedly criticised for service problems since its launch last year, declined to comment.