One month on from mortgage regulation and the storm clouds are brewing. A good many brokers and intermediaries are not happy and they have every right to be upset.
Everyday over the past month we have seen stories about brokers experiencing problems contacting lenders, sourcing systems that arent working or are overloaded, and products being withdrawn because of compliance issues. And if the industry news is not listing a litany of problems with mortgage companies, then its announcing that so and so business is finally up and running weeks after M-Day.
Of course nobody said that getting ready for regulation was going to be a quick and simple task and we should not underestimate all the hard work, time and money that has gone into preparing the industry for legislation. But there is a noticeable, and some would say yawning gap between those organisations that were ready and those that were not.
Mistakes happen and unexpected problems crop up, even for the most well managed project. But when lenders and other key mortgage providers tell brokers that they are aware of the problems and are working on it, it is cold comfort for the intermediary who has to pass on the bad news to his customer.
Because ultimately it is the small brokers that make up the vast majority of the UKs intermediary sector that are suffering because of the problems in the marketplace. It is these brokers who arguably have had to work the hardest to prepare themselves for regulation, make key business critical decisions, invest substantial amounts of time and money, just so they can be ready to trade compliantly on M-Day.
And when they get themselves sorted and open up for business, what did they find? A big chunk of the mortgage infrastructure is in turmoil.
Brokers have told me stories about telephone hotlines that have kept them queuing for over an hour; KFIs that continually contain obvious wrong and incorrect information; sourcing systems that just wont source; lenders that are either unwilling or unable to deal with re-mortgages; and existing relationships with lenders that are on the verge of falling apart.
From a lenders point of view I know the pressures that we have all been under and the problems we have faced getting ready for regulation. But from an intermediarys point of view I can understand how frustrating it must be to enter the brave new world of regulation and find it creaking at the seams.
All of these teething problems will no doubt be sorted out in due course and mortgage lenders will work hard to pick up lost business re-build broker trust. Whether all the sourcing systems and networks will survive this sticky patch is debatable.
But how many brokers will have lost customers and business as a result of the drop off in service they have had to deal with?
Regulation is here, but there is still a lot of work to be done. We as an industry must up our game and work together to ensure regulation is a boon to business, not just a necessary evil.