"Lenders aren't doing enough about SLAs"

The turnaround time differential between the third party and direct channels is causing mortgage brokers mental anguish and severely impacting the service proposition they can deliver to customers – the words of an industry stalwart who has had enough.

Managing director of MoneyQuest Michael Russell told MPA that not enough noise has been made about the issue of uncontrolled and inconsistent SLAs – a problem that has dragged on for two decades.

“It’s a massive issue at the moment,” he said. “We want to give our clients the same sort of onboarding experience that banks are providing their clients through their first party channel. There’s no reason, justification or excuse for clients being onboarded into a lender receiving such disparate service propositions and experiences.”

The former CEO of Mortgage Choice and Choice Aggregation said that about 20 years ago, the broking industry was encouraged to invest in electronic lodgment software in order to cut out the process of faxing paper applications and supporting documents to the banks. At the time, this investment was touted as a way to hasten lenders’ abilities to review and assess loan applications through the broker channel.

“We, being the mortgage broking business, invested millions of dollars into technology and training our brokers,” said Russell. “The brokers themselves have conformed, yet nothing has changed, in fact – not only has nothing changed, things, actually, have become a lot worse. They’ve become a lot worse in terms of just how inconsistent and uncontrolled these SLA blowouts have become.”

He disagreed with the claim that banks were working hard to resolve the problem and added that more needed to be done within the industry.

Read more: Lender SLAs – what can brokers do?

 “If the lenders had the intent and the commitment to fix it, they could, because they’ve got the balance sheet resources to fix it,” he said. “The lenders themselves now are producing some incredible technology for the benefit of consumers, so don’t tell me for a minute they can’t provide financial support and technology support to fix this problem.

“If someone grabs it by the horns with a steely determination to fix it, it could be fixed. But it hasn’t been.”

While many brokers have been hesitant to raise the issue for fear of rocking the boat, Russell said it was time for transparency.

Read more: "Lenders need to improve their credit assessment processes"

“There shouldn’t be any fear of consequences because we’re not naming and shaming – that’s not my intention,” he said. “What I am saying is it’s time to bring this transparency to the surface. Our industry needs to do a much better job. Our aggregation heads, our franchise heads and our industry bodies need to do more because it is impacting the health and wellbeing of mortgage brokers and it’s impacting the service proposition that we are trying to deliver to our customers.

“Something needs to change. If we saw these sorts of uncontrolled incidences within our businesses, we’d all be out of business. When we have any issues of this sort of magnitude within our businesses, we rectify them. We rectify them quickly, whether it’s an investment of money, technology or people, we address them quickly and that’s how our industry has continued to grow and thrive - yet the bank and non-bank lenders in the main, not all of them, but in the main, for two decades now, have just turned a blind eye with absolute nonchalance about how out of control their third-party credit and settlement operations have become.

“It should be an embarrassment but it’s not, and I worry that it’s not, because people are not speaking up loud enough.”

Kate McIntyre is an online writer for Mortgage Professional Australia. She has a wealth of experience as a storyteller and journalist for a range of leading media outlets, particularly in real estate, property investing and finance. She loves uncovering the heart behind every story and aims to inspire others through the artful simplicity of well-written words.
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