COMMENT
One strike and you’re out – that’s the message
from Abbey as it tries to get to grips with
mortgage applications not being filled out
correctly.
So from now on just one mistake on an application
will result in it being declined and you’ll have to go
through the whole process again.
As you all know, filling out Abbey mortgage
applications is not the quickest process in the world
and the thought of having to do it twice should be
enough to ensure you triple-check that all the i’s have
been dotted, the t’s have been crossed and no stone has
been left unturned.
At first glance this no-nonsense approach seems a
little harsh. We’re all human and mistakes happen –
surely forgetting to tick a box in the small print
shouldn’t mean having to complete an application all
over again.
But think about it from Abbey’s point of view. Why
shouldn’t it take a tough line when it comes to
completing applications? All it wants is seamless
transactions.
It doesn’t want to chase
incomplete applications because
it doesn’t need to – it’s not as
if it’s got a shortage of
people banging on its
door.
If anything, it
probably has too
many applications at
the moment and
wants a quick and
efficient way of
sorting the wheat
from the chaff.
So if your
application is
declined on the first
submission to an
underwriter you’ll get
an email alert and a
telephone call explaining
that you’ve messed up – no
arguments.
And if the reason for the
decline is your fault due to
supplying insufficient detail, you’ll
24
www.mortgagestrategy.co.uk
ROBYNHALL
Fighting for the Intermediary
Just get it right the first time Big issues
Should self-cert be scrapped?
‘‘
For brokers who are doing
their jobs properly life
should become easier as
Abbey’s backlog diminishes
Lenders’
complex deals are
good news for brokers
have to start the process again, referencing the original
application.
If this is done within 28 days of the original decline
the second application will not register as a further
credit search against your client provided the name
and address you supply are identical to the previous
application.
So for those of you who are doing your jobs
properly, this will have no impact at all.
If anything, your life should get easier
as Abbey’s backlog diminishes and
When Abbey announced that some 65% of its
mortgage applications were not completed correctly there
was the expected broker outcry.
While I usually have every sympathy with brokers who
complain about lenders – whether it’s about shoddy service or
unclear terms and conditions – sometimes those doing the
complaining shoot themselves in the foot.
If you as experienced brokers have trouble dealing with
certain lenders think how members of the public must feel
when they deal with them direct.
What better endorsement could there be for lenders
using experienced mortgage brokers?
Lenders make products complicated to make
money. If every product was simple to
understand and easy to obtain, what
would be the point in seeking
expert advice?
staff start to focus on getting
completed applications
through the pipeline.
“These changes will
in no way affect
mortgage brokers who
submit fully
completed
applications,” a
spokesman for
Abbey tells me.
“Indeed, we
expect there to be
an immediate
improvement in
processing time and
service response.”
This is good news.
After all, there are
plenty of reasons why
your clients could be
declined in the application
process but the fact that you
didn’t fill out their application
form properly should not be one.
That’s just one of the issues on
the agenda at the Council of
Mortgage Lenders’ conference
on mortgage regulation in two
weeks’ time.
Nobody could argue that the
product hasn’t been abused –
you only have to look at the list
of brokers banned by the
Financial Services Authority and
its reasons to see it has been a
problem, albeit a small one.
But for the few rotten apples
there are thousands of success
stories of consumers with
irregular incomes who have
managed to realise their dream
of home ownership.
As the CML itself points out,
a ban on self-cert may not deter
fraud but simply lead criminals
to explore other options such as
submitting claims backed by
bogus documentation of income.
Worryingly, it suggests this is
already happening.
FSA chairman Lord Adair
Turner started the debate in
March with the publication of his
review of financial services
regulation. Measures needed to
regulate the mortgage market
form a small but crucial part of
this review.
Should secured lending
be regulated? What about
buy-to-let? How can affordability
assessment be regulated? These
questions all need to be
answered and the conference
will also look at changes that
might be needed to the
regulation of brokers.
It is surely inevitable that
there will be a move towards
fewer, larger firms, which the
FSA will be able to supervise
more effectively.
So the CML conference
couldn’t be more timely and it
will be there, to a great extent,
that the future of the broker
market is decided.
MORTGAGE STRATEGY June 29, 2009
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