When lenders compete, brokers win

This year\'s Benchmark Study on lender technology shows lenders becoming increasingly innovative which means the true winners will be brokers, says Frank Eve

The 2006 Benchmark Study on lender intermediary technology was finalised last week and the results are now available. This information has been compiled for the past five years but this year’s study is the most interesting yet, both in terms of technological development and variety of lenders.

The study includes information on the instant offer technology provided by GMAC-RFC and edeus, and also on Origo’s joint forum which is looking at ways to introduce data standards to the mortgage industry.

This year the study saw participation from 31 mortgage lenders, an increase on last year’s 24, making it the most comprehensive review of lenders’ intermediary technology in the market.

Earlier this year a cross-section of prominent intermediaries were invited to a technology forum to verify the study methodology and ensure intermediary, broker and packager needs were reflected in the questions.

Lenders were then sent a questionnaire that focussed on the functionality highlighted by the forum. The functionality detailed by each lender was scored using information from the intermediary forum and the scores were presented in a table of results.

The research findings will be used by Mortgage Strategy as the basis for its Technology Service Awards to be held at the Mortgage Business Expo in London on November 15. These have become the most important technology-based awards in the industry and this year they have been extended to include awards for the IT companies that provided the technology to the Gold Award lenders. This year, GMAC-RFC and edeus will receive awards for innovation and 18 will be awarded the Gold Standard.

GMAC-RFC and edeus are the only lenders in the study to have point-of-sale instant binding offers without the use of physical valuations, using instead links to automated valuation models.

But 15 lenders say they have plans to launch an instant offer facility using an AVM and four indicated that they would launch this functionality within the next three months. This suggests that intermediary distribution technology is set for a big change next year.

When asked if they were going to subscribe to Origo’s Unipass system, 10 lenders said they were and eight lenders said that they were considering joining. This indicates a major shift in thinking by lenders and it looks like the Unipass system will be in use in the mortgage market by early next year.

Seventeen lenders in the study indicated that they were already members of the Origo joint forum and another three said they were considering joining. This suggests that the industry is taking steps towards working together to provide standards and increase the opportunity for the interoperability of systems in the future.

With this level of activity and investment in distribution technology, the true winners will be intermediaries and their clients who will benefit from faster and easier access to mortgage funding.