Some don't know basic mortgage terms, brokers claim
They play a key role in the mortgage business, but are underwriters always up to the task? Some brokers are suggesting not, identifying weaknesses in their performance. From not understanding basic mortgage terms to vague instructions, to careless errors and poor communication, lenders’ underwriting teams are coming in for some sharp criticism - though, in fairness, other brokers have also defended them, particularly those who are still learning the job.
Broker Michelle Lawson (pictured left), from Lawson Financial, claims that underwriting standards are the worst she has known in over 20 years of being in the industry, making her job frustrating. “I had an underwriter recently who didn’t know what a second charge was,” Lawson told Mortgage Introducer. “We all have countless stories to share like this. Problems in isolation we can handle but they seem to be relentless now.”
Remote working since the pandemic has escalated the problem, in Lawson’s view. She suggests some underwriters come across as ‘lacklustre’ and aren’t being properly monitored or benefiting from sharing knowledge with colleagues in an office. “There is no doubt that working from home is a massive part in this,” she said. “I also think that there are more inexperienced cheaper staff, to cut costs, resulting in what comes across as incompetence. There are a lot of careless errors. Brokers aren’t without blame too here, due to the pressures we are put under from all sources.”
Furthermore, Lawson highlights what she describes as “unfathomable inconsistency” from valuers too. She references two cases which she currently has with the same lender, both for properties of the same non-standard construction. “One valuer was OK with the property, the other wants a structural engineer’s report,” she explained. “You can have lenders where multiple underwriters review an application, all want different documents. It then just slows everything down as the cases go to the bottom of the pile each time. There appears very little common sense and very few lenders have sole case ownership.”
Poor communication includes vague requirements from underwriters, who are not always contactable or don’t call, Lawson added, requiring frustrating calls to clarify what’s needed. “Transactions are the longest they have ever been and getting in touch with the right people is like searching for hen’s teeth,” she said. “If lenders were to take the time to talk to the broker community more, we could help them shape their processing for the better of all of us. We all are working for the same goal and should be working together not against each other but it feels very much the latter, with no signs of improvement. Lenders who do well are those where we have access to underwriters, they are clear on packaging requirements and have the sole case handlers. I can’t comprehend why this is all so difficult nowadays.”
Ajay Nayyar (pictured second from left), owner and managing director of Hearthstone Mortgages, shares that one underwriter asked him to explain what an MUFB - multi unit freehold block – was. “If this came from a client, fine, but this came from an underwriter at a mortgage lender specialising in limited company buy-to-lets,” said Nayyar. “We’re now at a point where underwriters are trying to play accountant, questioning accounts they clearly don’t understand, nit-picking property structures they’ve never come across, and failing to grasp the nature of the transaction in front of them. What’s going wrong? Is it the shift to working from home with no one to lean on for guidance? Is it a training issue, or has competence just quietly left the room? Make no mistake - this kind of thing is slowing deals down, frustrating clients, and making advisers’ jobs far harder than they need to be.” He continued: “Something has to change, whether it’s better training, stronger oversight, or a proper rethink of who’s actually making these lending decisions. The current state of play isn’t sustainable. Property investment is a serious game. It deserves underwriters who understand the rules.”
Read more: Are young mortgage professionals too entitled?
A wide variation of underwriters
Kasia Makarewicz (pictured second from right), senior mortgage and protection adviser with Step By Step Financial Solutions, observes that different lenders have very different types of underwriters and their approaches can vary widely. “There’s definitely a wider range in underwriting quality now, and while many underwriters are knowledgeable and collaborative, others do seem less equipped for complex or nuanced cases,” said Makarewicz. “Whether that’s down to training gaps, working from home, or general resourcing is hard to say, but it’s certainly something we’re noticing more. It’s not unusual to receive questions that seem random or relate to information already provided in the application, like existing credit commitments, salary breakdown, daily living expenses. But I always remind myself it’s better for an underwriter to ask than to assume, especially when dealing with complex cases. Even when the questions feel a bit off, I try to keep in mind that we were all junior brokers once, asking what might have seemed like basic or even silly questions.”
Some underwriters are clearly still learning and remote working may mean they don’t have the immediate support they once had, Makarewicz suggests. “What’s far more frustrating than the questions themselves is the process that often follows,” she said. “You can respond to queries promptly, sometimes within the hour, and yet still wait several days for the case to be picked up again. That kind of delay can derail timelines and client expectations more than any individual underwriting question. In many cases, with a quick call, everything could be clarified and agreed the same day. It's that lack of momentum, rather than the underwriters’ knowledge, that’s often the bigger issue.”
Neil Renwick (pictured right), senior mortgage and protection adviser at CARA Mortgage Services, is positive about the underwriters he works with. “Generally speaking I don’t have any issues with underwriters and have a good working relationship with them,” Renwick noted. “Some of the larger lenders have a processing/triage team working below the underwriters who tend to be less experienced, and on occasion their messages can be unclear or confusing, but it can usually be cleared up with a phone call or a message asking for clarification.” He added: “Obviously, from time to time you may come across someone newer to the role and still learning, but I try to remember I was new once. I didn’t know what a MUFB was when I entered the broker world, after 11 years with a high street bank.”
Specialist mortgage advisor Bob Singh (pictured inset, above), director of Chess Mortgages, believes that by and large underwriters do a good job. “They understand the client the case and other intricate aspects of the case,” Singh said, but added: “There have been many cases where newly appointed underwriters who are perhaps not from a mortgage or broking background fail to grasp the essence of a case. Online mortgage applications have yet to evolve to allow the broker to explain the case from the outset and assist the underwriter to better understand the case. Too many assumptions are made which often lead to a wrong conclusions being drawn. BDMs have little authority, and the odd power-trip and jobsworth underwriting is all too common. They have zero discretion and sometimes loans are adjusted by £5. With AI moving at pace, I am hoping the whole process can be automated removing human error and bias.”
