This is the time of the year when it seems a week can’t go by without some kind of mortgage award ceremony taking place. Despite these ceremonies producing a variety of diverse categories, there is one award which currently seems uncatered for: the Lender Intermediary Friendly Award
Let me explain further.
As the mortgage market continues to evolve and lenders propositions continue to widen, it is becoming harder to establish one lender from another. With the impact of ‘Treating Customers Fairly’ (TCF) starting to wash through into the business processes of both advisers and lenders, I believe there is a big opportunity for forward-thinking lenders to look to change antiquated thinking and embrace relationships with the mortgage adviser and firms who introduce to them.
The current issue most lenders I speak to put at the forefront of their thinking is business retention, as clearly it is more cost-effective to retain business than find new. However, it is interesting to find how few lenders have adopted a policy of building a partnership relationship with the intermediary to meet this goal.
Many lenders see that once a loan is completed the borrower becomes their client, ignoring the relationship built between the adviser and the client. But who gave the advice? Who checked for affordability? Who completed the research and who has probably sold ancillary products? The mortgage adviser.
The affordability of the loan should be viewed across the term, but the adviser never knows, post-completion, if ever the loan is in arrears. To obtain information the adviser has to seek permission from the client before it is released. When asked why, lenders hide behind the data protection act. However, why is it that some mortgage lenders can release information on request from the intermediary?
This stance is totally opposite to the investment market where advisers receive information on an annual basis from the provider. I would suggest that both a mortgage and pension are long-term financial products that need regular reviews. How can this happen if information is denied to the adviser?
I can understand lenders offering short-term deals feel by not giving information means they can go behind the back of the intermediary and offer a product direct. But isn’t this stance counter-productive in building relationships with the introducing intermediary with regard to the placement of future new business?
The current issue for advisers is to find lenders who wish to build partnerships based around trust, quality of service, accuracy and speed of payment.
So for those lenders who want to be considered for the Intermediary Friendly Award, they should be judged on the following:
Retention fees paid to broker;
Access to mortgage information post-sale;
Informing brokers when the client contacts the lender direct;
Brokers advised when the client misses a payment;
A copy of the annual mortgage statement sent;
Lenders offering the same products to brokers as they do to the client at the end of the initial period;
No cross-selling;
Proc Fees paid within seven days of completion.
So, which lender should we vote for in 2006 ?
Alex Murray
Group mortgage director
Thinc Destini
