The research indicated many initial mortgage cases that had been declined by a building society or bank did not go any further, wasting lender and borrower resources.
Paul Bedwell, director at BNH Associates, admitted that a large number of borrowers often stepped out of the market after an initial application was rejected. He said: “We have good knowledge from a number of major lenders which shows that of the thousands of mortgage applications filed each year, only 12-15 per cent on average reach completions and result in a mortgage being provided. Once a customer has been lost from the sales environment of the building society or bank, our research shows that the vast majority of mortgage applications never go any further.”
He added: “This is a scandalous waste of resources and represents millions of pounds worth of new business that are being lost.”
Harry Katz, principal at Norwest Consultants, admitted that mortgage intermediaries should be sure of the offer before submitting it to the lender. He said: “Personally I don’t even bother to apply unless I’m 99 per cent sure that the deal is ‘a runner’. If I have any doubts at all, I will always ring the lender first to speak to an underwriter. I am not afraid of telling a client ‘no hope for you on this, either forget it or lower your sights’.
