Let’s work together to help clients

The liquidity crisis means it\'s more important than ever for lenders and brokers to share information that could prevent borrowers getting into difficulties, says Brian Murphy

Given the prevailing uncertain economic conditions, good communication between brokers and lenders is more important than ever.

Turmoil in the housing market, high mortgage repayment costs and spiralling utility bills have left many borrowers facing financial hardship.

So it is important that lenders and brokers forge and maintain successful relationships to provide better services for customers in the new, bleaker economic landscape.

Improved communication with an emphasis on sharing information could allow customers’ problems to be identified and addressed before they become serious.

Brokers provide advice and so are best placed to identify changes in their clients’ circumstances such as getting married, having children or going through divorce.

In fact, they are duty-bound to glean this information prior to recommending mortgage deals.

Lenders will be the first to recognise when borrowers get into financial difficulties, although they may be restric-ted when it comes to what act-ion they can take to mitigate these problems.

At this point, they should inform brokers about problems so fresh advice can be offered and more appropriate products sourced.

Brokers should maintain a continuous dialogue with their customers to instil confidence that they can always be turned to for help. Early in-tervention by brokers could nip many financial problems in the bud.

For too long, lenders have hidden behind data protection regulations as a reason not to engage with brokers when borrowers are facing difficulties.

Clearly, nobody would advocate that lenders contravene data protection rules but it shouldn’t be beyond the wit of man to come up with a mechanism that allows them to engage brokers when problems arise, particularly if they concern arrears.

For example, Accord Mortgages copies brokers into its correspondence with clients when they go into arrears. This provides brokers with the chance to engage with their customers and prevent them from falling further behind, thereby benefiting client, lender and broker.

Lenders and brokers have a significant part to play in looking out for their customers’ welfare and if relationships are strengthened by increased transparency, customers will benefit.

Like many brokerages, our policy is to contact customers three months before their existing mortgage deals come to an end to alert them to their situation. This is a preventative measure to ensure customers do not unwittingly end up on lenders’ SVRs.

Lenders and brokers strive to inform customers when they are coming near to the end of their deals but there will always be situations when borrowers move onto SVRs, particularly if they can’t find affordable alternatives.

Any brokerage with a semblance of organisation should have a mechanism in place that ensures customers are contacted towards the end of their deals so they can assess their circumstances and offer them alternative products.

Accord, Halifax and BM Solutions have retention products available for brokers to offer clients, but other lenders have been slow to develop such deals.

As market conditions ev-olve, consumers react diff-erently but it’s a marketing cliché that it’s easier to sell to clients you already know than to acquire new ones.

Many brokers maintain ongoing dialogue with their clients, not only when their mortgage deals are close to completion.

Recently, the market has seen a marked swing towards remortgages due to borrowers needing to refinance att-ractive fixed rates that were taken out in 2005 and 2006.

This issue again highlights the importance of client retention.

In a buoyant market, brokers may have less regard for their existing clients but since the liquidity crisis took hold, more are considering retention strategies.

Most of our brokers are situated in independent high street estate agencies and so are well positioned to see prospective applicants, purchasers and vendors. We consider it important to work with our business partners on retaining and nurturing customers.

Lenders and brokers are responsible for borrowers’ welfare but are accountable at different stages of the mortgage process. To strengthen the relationship between them, client data must be shared more freely so that all players can treat customers fairly and appropriately.