Star letter: Haughty lenders in their ivory towers are bad for business relationships
I am increasingly concerned by the over-defensive and often haughty attitude displayed by many lenders. There is an air of superiority and sometimes disdain that is simply not conducive to building solid and profitable business relationships.
The mortgage industry relies on trust and professionalism to ensure that the required advice and correct recommendations reach the public.
It is proven that most mortgage business is introduced by qualified, professional intermediaries committed to the industry. Many highly qualified advisers have years of experience, having arranged thousands of mortgages on behalf of clients, yet that seems to count for nothing.
Or does it? Last month, after a very successful autumn, we met many BDMs from various lenders that we had not seen before, or not for a considerable time. Each was keen to tell us we were top of the Touchstone ratings for mortgage business in their area.
Naturally, we were delighted to be recognised in this way, but I could not help wondering why this praise was being heaped on us by strangers.
Unfortunately, business levels today are dictated more by rates than anything else. It would be far more satisfying from a business perspective if mutual trust, lending criteria, considered, sensible underwriting and flexibility were the key drivers but this is not the case.
The air of superiority displayed by most lenders in what they dictate, and the way business is driven by systems, are a sad reflection of the direction in which the mortgage industry has moved in recent times.
Whatever happened to proper, inclusive debates, solid relationships, local support and a real desire to build something good for now and the future?
Instead, relationships in this industry seem to mean very little unless the numbers get noticed by someone high in the ivory tower, who then simply reports to those on the ground so that they can go after the most active players.
Clamp down on unsecured loans
Toni Smith of First Complete was spot on last week when she called for controls to stop people running up huge credit card debts shortly after obtaining a mortgage.
Affordability calculators ‘prevent’ lenders from agreeing certain loan amounts or monthly commitments, so clients turn to the unsecured market where they gain approval in a heartbeat.
I had a case where Santander was unable to lend an extra £16,000 on a client’s mortgage even though the new fixed rate reduced her committed mortgage payment. But then Nationwide and Sainsbury’s Bank both agreed a five-year personal loan, leaving the client with a far higher monthly commitment. OK, it is not secured, but is that the be-all-and-end-all?
But what will the client do when she needs to look at her mortgage again? Hands tied? Probably.
We need a criteria war, not a rate war
Last week, Stonebridge’s Richard Adams said we are likely to see a “far more intermediary-focused lending community over the next 12 months and beyond”.
Brokers deserve to feel buoyant but I would still like to see more of a criteria war than a rate war and for lenders to be more willing to use the FCA’s transitional arrangements in line with the MMR for existing borrowers needs.
Name and address supplied