Toni Smith is sales operations director at First Complete
It is starting to be accepted that many lenders are now monitoring quality, and it is likely that more lenders will link procuration fees to quality of business in the future. Of course any measures to improve standards in our industry has got to be a good thing, however just what does and should quality look like?
It seems to me that quality is a moveable feast at the moment. Every lender has a different interpretation of what quality is according to their underwriting requirements and their attitude to risk.
It is obviously onerous for brokers to remember the differing requirements of every lender they deal with, but what is slightly more worrying is that the criteria changes for each lender can also shift from month to month according to how much business a lender wants at any given time.
Lenders, as we all know, change their credit scores and criteria according to their appetite to lend; while this is entirely understandable it does give a mixed message to brokers regarding exactly what a good quality case should look like. Where it becomes unfair is if a broker then gets penalised for not meeting ‘new’ quality standards which just relate to a lender reducing the amount of lending they want to do that month.
This also encourages the highly undesirable situation where a broker starts to avoid placing business with a certain lender because their requirements change too often or are too onerous.
So what should quality look like?
I think there is already a general consensus on the key elements that make up good quality mortgage business:
• A broker should be able to demonstrate that they have gone through a full fact find with the client, to get a complete picture of the client’s requirements and their attitude to risk
• The broker should be able to demonstrate that they have a good understanding of the client’s income and expenditure and how this may change in the future
• There should be a well thought through product choice with justifiable reasons why that particular product has been chosen from that lender and the reasons it is right for that client
• Then when submitting the case it should be well put together and fully packaged including any arrangement or booking fees
• If the lender does then need any extra information, a prompt response will be better for the client, better for the lender and make the broker look efficient.
If a broker can fulfil these core requirements on every case then they should be fulfilling at least 90% of most lenders’ quality requirements and will already be carrying out the good practice required under the MMR.
