Reading the mortgage press this week has been a somewhat depressing and indeed worrying experience. A lot of focus has been put on the subprime market following both the FSA review last month and current US crisis. Add to this the rise in repossessions and you have the recipe for a tabloid media feast claiming that gung-ho lenders and brokers have been selling loans to clients that they could never possibly service let alone repay once the head line rate had disappeared..
Another area that has gained media attention is the response of lenders to government pressure to launch long term mortgages. Yet this too has been met with some cynicism with the commentators saying they won’t take off as it is not in the interests of a broker to sell a long term product. . This is a fair point as what incentive does a broker have unless lenders can make it worth their while. It does however illustrate why some people remain sceptical about the broker market suspecting that procuration fees will drive behaviour ahead of what is in the best interests of the clients and dare I say it, ahead of treating customers fairly.
So in these 2 news stories alone we have:
• Brokers failing to get to Know their clients well enough
• Affordability checks being inadequate and
• Procuration fees driving behaviour
In an ideal world prevention is better than cure and proper processes and systems negate many of these criticisms.. Point of sales systems, calculators and credit check services are in place to prevent many of these things happening. Check out the Crystal Solutions Web site, Focus or Verfi websites to see some of the tools serving the mortgage market and the home buying consumer. (www.crystalsolutions.co.uk, www.focus-solutions.co.uk and www.verifi-solutions.com ).
The market needs to invest in processes and systems to address these issues so that the debate can move onto how we can make it even better rather than continuing to revisit past errors and mistakes. Many positive things are happening in the market – substantial product innovation, great consumer choice, investment in e-commerce that is continuing to drive down processing times and a mature set of sourcing systems that help brokers guide clients through an almost impossible maze of products, quickly and effectively. Let’s sort out the bad processes now urgently and move the debate on to the many positive things the industry is doing.
