True online binding decisions make for better service

From Jeff Knight

Reading about other lenders’ service problems shocks me. Given the technology that exists, intermediaries should not be subjected to lenders’ blowing up and giving poor levels of service. It’s not good for intermediaries or their clients. But if more lenders offered true online binding decisions this would not happen.

For example, over the past two years we have doubled our business without any disruption to service because of the efficiencies of our online system. And our product range clearly shows we have an appetite for more business.

My question is – why don’t more lenders use binding decisions? I say true binding decisions because intermediaries should be wary of online decisions that claim to be binding when they are not. Any lender that offers true binding decisions will grow their business without adversely affecting their service. GMAC-RFC and BM Solutions are good examples of this.

While I have a lot of respect for the team at Platform, it claims to provide binding decisions but clearly doesn’t. Otherwise it would not be experiencing the service problems it is. My guess is that cases are being underwritten again after the online decision has been made. If this is the case, the original decision can’t be binding and the online system won’t give it the efficiencies to take a lot of business and still provide good service.

Luckily our POSD system allows us high business levels and we can provide great service to intermediaries.

But I applaud Platform for at least trying to provide binding decisions. It will be good for intermediaries when more lenders actually do provide true binding decisions.

Marketing is no substitute for genuinely good deals

From Eddie Royce

Awesome, aggressive, money sale are all words I note were used to describe a popular lender’s latest headline rates to attract mainstream clients, or rather mainstream clients’ brokers.

Last week I also saw a columnist commenting on a survey of brokers and being surprised how many of them used only a small number of lenders for a large proportion of their business.

It’s not surprising that the lenders who throw money at marketing their headline rates get a fairly large slice of that week’s pie, irrespective of the overall cost of the scheme during its initial period.

For example, look at BM Solutions’ two-year 3.89% fixed rate, Yes the headline sounds great but a 1,499 fee on a mainstream? It’s not adverse or buy-to-let. If you take a typical 100,000 loan over the two years, the fee worsens the rate by 0.75% to 4.64%, and it doesn’t look so headline then. For those brokers regularly doing 250,000-plus loans it might be OK, so good luck.

But me, I’ll carry on using Trigold to calculate which deal offers my client the best value for the scheme period.

If this means a lot of my clients go to a few lenders like Nationwide and the service remains as good as it is, I will sleep well at night.