Inaccurate online decision

From Nigel Pamment

I am concerned about Northern Rock’s online decision system’s accuracy. It has been its policy for two weeks now
that if the extra proc fee of 150 per application is to be received, the application must be done online. There is
nothing wrong with this and it has been the policy of other major lenders for a while now.

So I keyed in the application for a couple, one of whom was employed and the other self-employed. The employed income was 19,000 and the self-employed person made a net profit of 8,190 last year, 23,626 the previous year and 19,942 the year before that.

The reason for the declining profit was that he had taken on a driver for his courier service and was in the process of building up a second area.

Before I keyed it in I rang to see how Northern Rock would view this and was told it would look at the past two years and take an average, which gave 15,908 and, with the wife, a total of 34,908 and if the couple obtained a high credit score Northern Rock would do 4.9 x joint income on a five-year plus rate on a together deal, giving 171,049. They couldn’t get that much as that exceeded the unsecured limit of 30,000 but it gave them the maximum they could borrow that the property value would let them.

I was pleasantly surprised when the decision came back with a maximum loan of 158,250 and thought I had underestimated their credit worthiness. I rang NR to clarify whether the documents to be provided were correct as printed on the certificate and at the same time wanted confirmation NR had obtained a high pass as the online system, unlike the telephone DIP, does not tell you. I was then told the couple had actually only obtained a low pass and the maximum they could borrow was 3 x joint income, and because the husband’s profit had declined NR would only accept his last year’s figure, which gave a maximum borrowing of 81,750.

This was no use at all and I expressed my concerns. I was told I would get a call in 48 hours but because of the seriousness of the situation it would probably be sooner.

I did all this just after noon on November 14. On 5pm on November 17 I had received no call. What’s the point of technology if it doesn’t work?