Lenders urged to improve communication and streamline processes
Three in five finance and mortgage brokers, or 60%, have faced delays in loan processing over the past six months, a recent poll commissioned by the Finance Brokers Association of Australia (FBAA) has found.
The brokers association called the situation unacceptable, with FBAA managing director Peter White (pictured above) saying that while delays were not surprising, the lack of responsiveness from lenders was still frustrating.
The survey, conducted by global market research consultancy CoreData, also revealed that 45% of brokers cited poor communication from lenders as a major issue, while 39% reported technical issues with lender systems.
“The fact that so many brokers regularly face these problems indicates that the system is inefficient and that some lenders are not making efforts to improve,” White said.
Other concerns raised by brokers included inflexible requirements for borrowers (35%), complex documentation requirements (31%), post-settlement issues (30%), and a lack of transparency in lending terms (26%).
White has previously called for standardised documentation around service level agreements to expedite loan discharges for borrowers seeking to switch lenders.
“Three years ago, we reported that banks were taking 14 to 30 days to finalise discharge documents, despite multiple requests,” White said. “Many brokers still distrust lenders’ motives.”
He also pointed to recent statements from major lenders such as Commonwealth Bank of Australia (CBA) and Westpac, suggesting that some banks may be intentionally discouraging business through brokers. White noted that brokers suspect these delays may be deliberate.
“Banks need to realise that continued delays and poor service will push customers away,” he said. “This poll shows that some lenders are still not doing enough. They must improve their processes and communication.”
White proposed better service level agreements as one solution, advocating for universal, standardised loan discharge agreements, loan application forms, and privacy act forms across the industry.
As a broker, have you experience delays in loan processing from lenders? How bad is the problem? Comment below.
