Last year, many intermediary lenders focussed their IT development on broker distribution technology. The ability to deliver instant decisions and speed up the application process has become critical for lenders wanting to take a slice of the mortgage market in 2007.
Over the next 12 months we will see a number of lenders following GMAC-RFC, edeus and BM Solutions in developing instant decision functionality using links to automated valuation models.
Lenders’ intermediary websites have matured into a vital communication and delivery mechanism for the intermediary market with many lenders having already taken the step of only accepting online applications. This process is likely to become the standard interface for all intermediary lenders over the next few years.
But the next phase of development will require better interoperability between lender and intermediary systems so that packagers and brokers can enter data just once, regardless of the number of lenders they are dealing with. Only with integration can a swifter and more compliant service be offered to clients.
It is also only with integration that the Financial Services Authority’s ruling, allowing products to be chosen on the basis of speed of service as well as competitiveness, can be put into practice.
Simultaneously, and of course unsurprisingly, packagers will be asking for bespoke integrations in 2007 as they use technology to add value for their broker clients.
Packagers now have the opportunity to use technology to provide an online portal service that could provide decision and sourcing for the adverse mortgage market.
It is in the adverse market that technology can make its biggest impact as the complexity of lending criteria for adverse cases means a credit search needs to be done before a broker can select a product. This is where packagers should focus efforts so that all their lenders’ technology is integrated into their own sourcing and decision systems. Packagers can provide a full multi-lender, single data entry, online decision and processing system to the market.
Brokers in the prime mortgage market also want to see some form of internet-based systems integration. This can either be through sourcing systems such as Mortgage Brain with the Mortgage Trading Exchange, Trigold and Mortgage 2000 or through integration with their own administration systems so they can select products and get instant decisions.
What this all means for lenders is that they are now tasked with finding the most cost-effective method of building decision and application processing technology while deciding how best to integrate these with distribution. It will be the lenders that can use technology to provide their distribution with faster decisions and processing that will thrive in this environment.
But be warned, this may also mean that packagers, networks and brokers must rethink their panel strategies on the basis of the technology and commitment made by lenders.