Star letter: Why lenders should engage with brokers
A few articles recently implied that the Mortgage Market Review could be bad news for brokers in terms of delays, poor service and restrictive criteria.
But my experience so far shows the opposite could well be true and the following three examples help to demonstrate this:
Client 1: Last month, I spoke to a high-net-worth client on £189,000 a year who was looking to move home. He spoke to his current lender, First Direct, and, after a three-week wait for a telephone interview, he was told it would offer a mortgage of only £350,000 – around £50,000 less than his current loan. He is a single man with no children, and I was easily able to obtain a decision in principle for over £900,000 and he is now looking for a house in his desired price range.
Client 2: Two weeks ago I spoke to a Nationwide borrower looking to remortgage as her main product was due to expire. Last year, she had arranged a small further advance with a penalty of £400 and she wanted to pay this to get the whole loan on a medium-term fixed rate. Nationwide appeared her best option, so we went online at her home to arrange the rate switch. As she intended to pay the early repayment charge and to reduce the term, it was insisted she speak to an adviser. The next day, she booked an appointment with a one-week delay even though she needed to curtail a visit to her mother 150 miles away to make the three-hour meeting. She arrived at the branch with her documents to find it was a video link (she could have done this from her mother’s home).
But “as she had already decided”, the branch could not provide advice and declined to progress the meeting. Unable to move forward and very annoyed, she came to me to arrange the next best deal (NatWest).
Client 3: This week I spoke to a client who had been on four lenders’ websites trying to work out what he could borrow as he was unable to see anyone in the branches. Confused by the online calculators, he believed he could not borrow more than twice his income and so was about to stop looking for a home.
On referral, we of course found he could achieve around four times, ironically with one of the lenders he had already tried.
Accordingly, MMR will drive more borrowers away from branches and websites and towards brokers, who are more adept.
But the news is not so good for those lenders who have implemented the requirements of MMR but failed to anticipate the effects. Borrowers who have found a house and are under pressure will not wait three weeks to meet the in-house adviser.
A few lenders have already realised that to maintain lending volumes they need to engage with brokers but many more need to follow or fall behind.
Arron Bardoe, director, Temple Capital Finance
I read in Mortgage Strategy last week that 200 businesses, including former Royal Bank of Scotland chief executive Sir George Mathewson, had hit back at anti-independence business leaders who signed a letter stating that the case of Scottish independence had not been made.
Personally, although somewhat sad to see the Union go, I hope it happens. Too much damage has been done to the relationship over the last 12 months, and a Scotland still in the Union post-vote will either result in complaints from north of the border that Scotland is being “held back” by a restrictive Westminster and/or complaints from England that Scotland is getting an unfair share of resources (whether or not either is actually true being beside the point).
Rather like children at home, there comes a point that they need to make their own way in the world, for better or worse. And in exactly the same way, I would hope the relationship between the countries, although more remote, works better.
Name and address supplied