Many brokers believe that they are obliged by the networks to use these platforms to perform the initial search on all mortgage business, when in fact they do not yet have the technical capability of matching a sub prime client with the right product.
Keith Dearling, Director of Advantage Home Loans says: “Brokers are wasting a lot of time -and potentially business - by using these platforms to search for sub prime home loans, as the systems simply aren’t ready yet to cope with the more complex nature of these clients. The main problem is that the client has been quoted a completely unrealistic initial rate from a prime lender for a loan they should never have applied for in the first place, and that they will end up being turned down for anyway.
The result is that the client ends up with a footprint on their credit record – something this group in particular can ill afford - and a loan at a higher rate than originally quoted, maybe even 2-3% more. All this makes for a very poor experience for the client, and potentially the loss of valuable revenue for the broker.”
While there are benefits to using systems like Trigold and Mortgage Brain to provide audit trails and centralised information, for sub prime business they cannot perform an accurate and detailed search so Advantage Home Loans recommends that this kind of highly specialised business should always be referred in the form of a DIP directly to a specialist provider.
Dearling adds: “It’s really important that brokers continue to obtain their initial quotes for sub prime clients via a branded mortgage arranger or direct from a lender – they will be able to give an accurate quote first time every time and also assist the broker with any issues or concerns they have on KFIs. This will help to ensure they offer a smooth and efficient service to clients, and ultimately, run their business more effectively.”
