Brokers have long argued against ‘hard’ footprints being left when obtaining decisions-in-principle (DIPs) as it prevents consumers from shopping around for different quotations, as desired by the regulator, and could adversely impact on their credit rating.
Now the CML has clarified its position, saying DIPs or AIPs will not leave a credit application search (a ‘hard’ footprint) visible to other lenders. It will leave an enquiry (a ‘soft’ footprint) type search instead.
Sue Anderson, head of external affairs at the CML, said: “The new guidelines clarify and give a clear understanding of the issue to brokers. DIPs are still quotation searches and should have no impact on the lending decision.”
The move was welcomed by the Association of Mortgage Intermediaries (AMI), which has campaigned on the issue. However, Rob Griffiths, associate director at AMI, believed further clarity was needed.
“We’ve had discussions with the CML and various credit agencies and were told that multiple footprints weren’t having any influence on the lending decision. We don’t know if all lenders are leaving ‘soft’ footprints on checks so we are looking for some clarification. We need a situation where brokers know exactly what footprint is being left but we welcome the CML’s move.”
Danny Lovey, sole trader at The Mortgage Practitioner, said: “This is a great victory. The CML has got the message and hopefully we are now in a position to know what footprint we are leaving. One thing that concerns me is whether lenders only leave ‘hard’ footprints once a genuine application with a post address has been received?”
