We are currently receiving a higher than expected volume of enquiries and apologise for the delay caused. Your application is important to us. We hope to resume normal service soon.
Sound familiar? Anyone who has phoned a call centre anywhere from Glasgow to Mumbai will recognise the frustration that comes with automated responses such as this.
Unfortunately, brokers are now going through the same ordeal with lenders. There are major delays in processing applications as lenders struggle with turn-round times.
Northern Rock BDMs issued a warning recently that they are taking seven days to look at a case after submission and their support staff have quoted a six-day turn-round for referrals to underwriters. Coventry Building Society is warning of a 96-hour wait to check emails and it has staff working weekends to catch up with the backlog. Accord even pulled a range of products for more than a week to process mounting residential mortgage applications.
Why the sudden hold-up? The demand for the best deals has increased, thanks to overall market uncertainty and the looming stamp duty deadline for first-time buyers. Combine this with redundancies in the industry and you can see why lenders are ill-equipped to keep up the pace.
Securing a deal before it is removed from the marketplace can make thousands of pounds of difference to clients but excessive processing time makes this increasingly difficult to achieve. This is particularly true for those FTBs trying to meet the stamp duty deadline.
Mortgage brokers live and die by the FSA’s treating customers fairly mantra and lenders should have to meet the same exacting standards. This means that when a deal is made in principle and clients meet the necessary criteria, lenders should not be allowed to renege on the deal because they take too long to process it.
Lenders need to take advantage of the heightened activity in the market right now and help brokers push through as many deals as possible. Lenders need to help brokers to help them. Process the applications and it is win, win, win – for brokers, clients and, not least, the lenders.
Dominik Lipnicki is director of Your Mortgage Decisions