Mark Mountney gives a view on those lenders which have lived up to post-‘Mortgage Day’ expectations and those who are failing to deliver
So have lenders coped with key facts illustrations (KFIs) so far? In a word ‘No’. Last week I reacted to the first week of chaos and blood-letting suggesting that by the end of the second week post-‘Mortgage Day’ most lenders would have broken the back of any problems and their systems would, again in the main, be fully operable. Me and my big mouth.
I doubt that we at PMM are very different from most advisers in that we had taken certain steps to protect our cashflow to the best of our abilities. This translated into only using lenders that we were comfortable with. Those who would be KFI-compliant as well as having the back-office processing to get the cases through with minimal interruption.
Cutting the panel
Initially, some two weeks before ‘Mortgage Day’, we felt that we had to cut our panel right back to just a handful of lenders that we were able to test in advance and prove capable. On 31 October this list was initially very short. Today, almost two weeks later, it has only expanded to a limited extent and even these lenders are hardly firing on all cylinders. We still have incredibly frustrating issues, almost across the board, which really should have been seen way before launch.
Problems faced
So, what problems are we encompassing? Needless to say most of the delays and frustrations rotate around the lenders inability to deliver accurate and timely KFIs. We opted to temporarily suspend our use of any sourcing system until things had settled down and we could rely upon accuracy, bearing in mind that we would then be responsible for the KFIs. By electing to go directly to the lenders (via websites invariably) we thought that we might fair slightly better than most. Wrong again.
Firstly, with some lenders we had to wait almost a week just to register the firm. Fortunately, we were on the original FSA list of those authorised so we didn’t have the added pain that some adviser firms went through of having the lender slam the door in their face.
Secondly, we had the incredibly frustrating task of having to register all of our individual advisers with some lenders and that added a further level of delay. I have to ask why is this necessary when the firm itself, rather than the individuals, is authorised?
Thirdly, and again this is an amazingly common error, as fee-charging advisers we were either unable to add our fees to the KFI or we were pressured into selecting the wrong option on a drop down box over which we had no control. The result, of course, is an inaccurate KFI.
Under the microscope
Let’s take a look at some specific lenders. Lenders where we had a minimal amount of disruption and where systems seem (touch wood.) to be fully operable are:
Igroup.
Preferred Mortgages.
Alliance & Leicester.
The Mortgage Business (TMB).
There is a footnote with Accord Mortgages. Their systems have apparently been built with no attention to the fact that pre-‘Mortgage Day’ applications are not regulated and therefore they do not need KFIs. All pre- 31 October offers are now having to be manually typed.
Lenders with continuing snags:
GMAC-RFC - it died on day one and still hasn’t surfaced. We can product decision-in principles but not where just a pre-sale is required.
BM Solutions - it still has an extended delay in the log-in registration of individual advisers. So much for being the first out of the blocks Mr Bolton.
Northern Rock - ditto. The firm is registered but they insist on the individuals also being registered. But can we get there…?
Abbey – ditto.
First National – it has no fee-charging fields.
Chelsea Building Society - it takes at least two or three days for a DIP or you can opt for access via a branch. Technology it seems has taken a retrograde step here.
UCB Home Loans - it will only allow submissions via Mortgage Brain Ltd. Thanks but no thanks.
And even the smaller, specialist lenders are in the same boat. Nelson Homeloans and Rooftop Mortgages simply bounce the contact back to the packager, Solent Mortgage Services.
Processing capabilities
However, where we come to the effect of regulation on the actual processing capabilities of the lenders, it becomes a little bit more difficult to determine. However, in a lot of cases we have had to deal with changes to cases due to the effect of regulation and we have definitely seen delays there. For example, revised offers are taking a week with Abbey and Accord. Northern Rock are taking days to sneeze.
So all around us we seem to have varying levels of chaos. With some there is no ability to hide the truth. Others would have us see the proverbial swan on a lake. Seemingly calm and serene but underneath paddling like fury.
There’s still a long way to go yet I’m afraid.
Mark Mountney is managing director of Premier Mortgage Management (PMM)
