Speaking at the CML annual lunch in London today, Van der Heijden, who is also head of lending at HSBC, told attendees that before the credit crunch mortgage lending sleepwalked into becoming more of a sales culture.
He told the audience: “I think we have to get more honest, more transparent, more intelligible, to our customers. More importantly, we need to make a true cultural shift from a sales culture, to a service culture.
“Somehow, after deregulation but before the credit crunch, mortgage lending sleepwalked into becoming a commoditised sales business rather than a true customer relationship business.”
He added: “While working with great respect with the other professionals in the mortgage chain – conveyancers, surveyors, insurers, intermediaries, panel managers and the rest – we must take to heart that we are the ones with the long-term customer relationship, and its attendant risks and rewards.
“We need to take responsibility for that relationship, irrespective of our distribution model or preferences. It might even be better business for us in the long run than the old cat-and-mouse game of churn, resulting in a constant merry-go-round of poaching each other’s customers that ended up giving us the borrowers we deserved, motivated more by price than by service. Loyalty works both ways.”
In May 2009, Michael Coogan, the former director-general of the CML, famously made the comment that, “some brokers acted more like sales people interested in cash-flow rather than the customer’s interests.”
Van der Heijden also used the event to question whether the bridging sector is fit for purpose.
He says while lenders should defend their turf against regulatory excess, they should also step in when attempts are being made to avoid regulation.
He told attendees: “We should support efforts to identify areas where there are attempts to circumvent rules and allow poor lending to slip through the net.
“While there are undoubtedly some good lenders in it, is the bridging and short-term lending market at the moment universally truly fit for purpose, for example?
“Would it benefit from regulatory scrutiny, and would it really damage us to say so?”
He also commented on how the mass of regulation on the mortgage market right now is stifling lenders’ ability to develop innovative products.
As a result of the Mortgage Market Review, he says the vast bulk of its IT resource is devoted to developing regulatory systems, which is squeezing its ability to use these resources for developments that its customers might benefit from.