Don’t rely on systems to source B2L deals

The intermediary mortgage market is becoming more reliant on technology by the day and the future is likely to see this trend continue. I presume that everyone in our market uses one computer programme or another during their working week.

The mortgage market has many sourcing systems available to aid mortgage writing such as Mortgage Brain and Trigold as well as several bespoke systems offered by networks and other service providers.

There are obvious benefits in using these systems such as product sourcing, form-filling and record-keeping – but that’s not all. The reason these systems have become so predominant is, in part, due to statutory regulation by the Financial Services Authority.

Many brokers choose to treat non-regulated buy-to-let mortgages in a regulated fashion in case they become regulated at some time in the future and also because it promotes best practice.

This is a commendable ideal but there are problems associated with this process that might affect systems which were developed principally to help with regulated residential mortgages.

First, we must be careful that we do not imply that a non-regulated mortgage is regulated. The consequence of this could be that a customer might ass-ume FSA protection is offered when it is not. Customers might rely on this protection when making a decision or worse still claim that they did, at which point a broker could be found guilty of misrepresenting the facts.

Second, when undertaking a product search on a sourcing system the details a broker inputs will affect the results they get. A statement of the obvious? Not entirely.

For example, in the course of a buy-to-let mortgage search you may not know or think that the applicant’s income is necessary. If you fail to input a personal income for a buy-to-let mortgage – even when this is not used in the criteria for determining affordability – systems can dismiss certain products.

Depending on how the service provider entered the product details, its internal filter might exclude a product.

This is a particularly common problem when a lender has a range of residential products, and the obvious result is that the wrong product may be sourced.

Finally, I know from experience that some products placed on systems can be inaccurately displayed or not displayed at all.

Many brokers are unaware that providers such as TBMC have to pay significant sums to ensure our products appear on well known sourc- ing systems. Recently we experienced a week when none of our products were displayed due to a sourcing system provider’s “volume of work”.

Obviously we were not pleased about this, but the lesson for brokers is that the systems are not always up-to-date and this should be a concern to anyone relying solely on this information.

Buy-to-let is still a niche mortgage market and it is advisable for intermediaries to check product details with lenders before making recommendations.