One of my favourite ‘management-speak’ phrases is, ‘There’s no ‘I’ in team’. It’s up there with other gems like, ‘Running it up the flagpole’, ‘Never assume, it makes an ass out of ‘u’ and me’, and ‘We need some blue sky thinking here’. But the ‘no ‘I’ in team’ example seems particularly pertinent given the furore surrounding Wayne Rooney’s return to the England World Cup squad.
Now, I’m not going to spend this article discussing the pro’s and con’s of the should he/shouldn’t he play debate surrounding Big Wayne’s participation in the group stages of the tournament, considering that, at the time of writing, the damn thing hasn’t even started yet. But it seems to me to emphasise how we can sometimes forget the bigger picture. Which might be another example of management speak, by the way.
The point is that yes, individual talents will always catch the eye, but without the wider team, nothing will be achieved. It’s true in football, and it’s certainly true with the work the Association of Mortgage Intermediaries (AMI) is doing. The most important part of a trade body is its members – without their backing and their input we would: (a) not be aware of the wide range of issues members were facing, and (b) not have the support to work on their behalf to get the best outcome for the industry.
Constant interaction
One issue which has seen constant interaction between AMI members and the executive team is that of credit searches and the issue of ‘hard’ and ‘soft’ footprints. Members initially came to us concerned their clients’ ability to shop around effectively and obtain future credit might be being hindered by lenders’ leaving ‘hard’ footprints on credit files when intermediaries were requesting decisions-in-principle (DIPs).
The technology lenders are now using, coupled with a wider move to affordability based lending, rather than relying on the more traditional income multiple method, has meant brokers are conducting a DIP just to find out how much a lender is willing to lend their client. Lenders are then leaving ‘hard’ footprints at this stage of the process, which show up to other lenders conducting further credit searches. If a broker is having to conduct DIPs with multiple lenders in a short space of time, it could have a negative impact on the client’s ability to get credit in the future.
This seemed to go against the FSA’s aim that customers should be able to shop around for their mortgage deal and AMI members came to us wanting clarity from the lenders on what footprint would be left and at what stage in the sales process a search would be carried. Last month, AMI produced a factsheet for members on credit searches and footprints which we hoped would clarify the issues.
Clarity
We have also conducted research among members asking about their understanding of the situation. The key question for us out of the research is: ‘In general, how often do lender’s agreement-in-principle (AIP)/DIP forms and website requests make it clear to you as the intermediary which type of footprint will be left on the client’s credit file by the AIP/DIP?’
The results seem to prove that, for a large amount of the time, the intermediary has little or no idea what type of footprint will be left by the AIP/DIP. 43 per cent said it was never made clear, while a further 32 per cent said it was clear only some of the time. This should surely be the first stage for all lenders – making it clear what footprint they will leave. At least then the broker is able to give that information to their client and keep them informed as to the possible consequences of multiple ‘hard’ footprints on their file.
This would be a start. But we must ask why ‘hard’ footprints are being left at the DIP stage anyway? I know of at least one lender that makes it clear to the broker that when the button is pushed to request a DIP it will only leave a ‘soft’ footprint on the file, and that a ‘hard’ footprint will only be left at the full application stage. This is surely the lead all lenders must follow.
FSA action
Our credit search factsheet caused something of a stir because it referred to some ‘Frequently Asked Question’ answers on the Financial Services Authority (FSA) website. These seem to say lenders shouldn’t use a ‘soft’ footprint when providing quotations for standard priced products, and a DIP is considered an application for credit and not a quotation. Thus, is it any wonder that lenders were leaving ‘hard’ footprints at the DIP stage? I have been assured that the FSA acknowledges that time and lenders’ technology has moved on since those answers were given and it is already looking to update the information it gives out on ‘hard’ and ‘soft’ footprints. This is welcome news.
The ‘team’ involved in this issue is of course the entire mortgage industry – intermediaries and lenders. We must be able to broker an industry solution to this conundrum that will satisfy not only the FSA, but most importantly, the customer. It is possible – the lender I refer to above has the solution – but it will need the entire team working together to achieve the necessary result.
