To the average person on the street, the roles within the mortgage industry probably seem straightforward enough: the customer asks a mortgage broker to find them the best product for their circumstances, and the lender then provides the loan. If only it were that simple. As we all know, the relationship between intermediaries (brokers, independent financial advisers and packagers) and lenders is far more complex.
One of the key elements in the mortgage process – and an important factor in the relationship between intermediary and lender – is service. A lender can have the best products on the market but its business won’t flourish unless its service levels are up to scratch. Using a lender with a poor service record could tarnish an intermediary’s reputation and jeopardise the profitability of their business. In the non-conforming sector, we deal with complicated cases every day so it is essential that the highest levels of service are provided to keep the process running smoothly. So what role do underwriters play in the service chain?
It has been suggested that a lender is providing a good service when an underwriter does exactly what the intermediary wants them to do. This couldn't be further from the truth: good service does not go hand-in-hand with an ‘anything goes’ underwriting culture and lenders should never lower their underwriting standards. Good service comes from giving each customer’s case a high level of attention, and ensuring that everything that can be done to help a case proceed smoothly has been done. Good service, coupled with a high standard of underwriting, sit alongside each other to provide the best possible customer experience and, at the same time, they help to control the level of risk involved in the lending process. Good underwriters are flexible but this doesn’t compromise the stipulated risk thresholds; they are trained to work within set lending guidelines, using their knowledge and experience to make qualified decisions. In addition, like their colleagues across the rest of the business, underwriters keep the principles of ‘Treating Customers Fairly’ firmly in mind while working on an application.
Each to their own
Fast service doesn't necessarily mean good service. Some customers are specifically looking for a quick turnaround and will list speed as one of their top three requirements, but others are happy to wait an extra day or two for a decision on the mortgage that best fits their personal circumstances. Automatic cascade underwriting has become popular recently because it offers a particular service: speed of decision-making. Using an automatic cascade system, if a customer applies for product ‘A’ but doesn’t quite fit the criteria, they will automatically be cascaded to product ‘B’. But product ‘B’ might not be the best possible fit for the customer’s circumstances – ideally, product ‘B’ should be checked against the whole of market to ensure it is the next best fit, but how often does that actually happen? At Preferred, our underwriters consider each case on its own merits, so a customer whose circumstances fall slightly outside the criteria of product ‘A’ won’t automatically be moved onto product ‘B’. Instead, the underwriter will review the customer’s individual circumstances and decide whether it is appropriate for the customer to be accepted on to product ‘A’ after all (for example, if they have £550 of CCJs when product ‘A’ caters for up to £500). The personal approach to underwriting might take slightly longer than an automatic Yes/No answer, but ultimately it gives the customer more choice. Going forward, the ideal situation would be to have a combination of the two systems via multi-channel processing; whereby straightforward cases pass directly through an automated system, and more complicated cases are passed to an underwriter for the personal, flexible approach.
Communication
In order for an underwriter to provide the best possible service for the intermediary (and, ultimately, the customer), they need to be accessible. As ever, communication is key. Underwriters who are intermediary-facing can enter into a dialogue about a case, giving intermediaries the option to call to discuss any unusual factors or to work directly with the underwriter. As automatic processing becomes increasingly popular, it is important that lenders keep the channels of communication open. Irrespective of whether their application was sent in by post, fax or submitted online, an intermediary should always be given the opportunity to talk to someone working directly on his or her case. The relationship can be taken one step further by the underwriter accompanying the regional sales manager on a visit to the intermediary. By meeting with the intermediary in their own surroundings, the underwriter can train staff on any product/criteria changes, answer specific questions about criteria, review any particularly challenging cases, and refresh the general understanding of packaging requirements. Such visits are extremely useful for both parties and leave the intermediary not only with a better understanding of the lender’s products, but also feeling that their relationship is truly valued.
Standards
Underwriting standards are important, and they are a key factor in providing excellent service, but they should not be confused with the overall service provided by a lender. Underwriters are part of a large team, from the regional sales managers and the sales support teams, through to the mortgage consultants and the underwriters themselves (not forgetting the marketing and product development teams behind the scenes).
Providing excellent levels of service is the responsibility of the entire team, not just the underwriters. There is also an element of responsibility on the intermediary’s part. By ensuring they have an in-depth knowledge of a lender’s criteria and packaging requirements, they can submit a perfectly packaged application, making the process run as smoothly as possible for the underwriters, and for everyone else involved. In their role as a service provider, lenders should ensure that they keep intermediaries up-to-date with any changes to their criteria, give them straightforward, easy-to-use sales material, and provide them with relevant training on any specialist product criteria.
Encouraging feedback
Consistently providing excellent levels of service for intermediaries covers a wide aspect. One of the simplest and most efficient ways for a lender to find out what an intermediary needs is to ask. At Preferred, we actively encourage feedback from our intermediaries, holding annual Quality Circle sessions to find out what we do well, and to ask whether there are any areas we need to improve upon. Crucially, we don’t just listen; we act on the suggestions and make changes as a direct result of intermediary feedback.
There are plenty of other factors to consider in serving the needs of intermediaries; not least of which is providing them with good products. Lenders relaunch their product ranges on a regular basis, continually adapting the products to keep up with market demand. Products that are just as good are worthless if the service is non-existent. It is important to be as innovative with product design as with service provision. In addition, lenders can provide additional services such as an up-to-date resource section on their websites, providing sales material and additional tools to aid the intermediary. The industry has gone through a significant period of change recently so providing additional extras for intermediaries – such as free seminars on how ‘Treating Customers Fairly’ will affect their business – are sure to be appreciated.
Ultimately, providing good service is about building and maintaining relationships. As such, it is essential that the industry remembers that relationships and technological advances can – and should – go hand-in-hand. Underwriters play a crucial – and (with the ever increasing push on technology) perhaps undervalued – role in serving an intermediary’s needs and delivering excellent service levels, and no amount of automated processing can replace that.
