The relationship between lenders and mortgage brokers is about to be tested like never before. The MMR will take a great deal of patience, commitment and trust to make it through a potentially rocky patch.
As with all relationships, we will get out what we put in. We need to ensure that we are on the same team and that our shared goal is to provide the best deal and service to customers.
This will mean negotiating some pretty contentious ground. Premium cost phone lines, for example, are not likely to help promote harmonious broker/lender communications and ultimately the customer will lose out as the costs filter through.
Even more worrying, however, is the tendency towards a general lack of open communication and consultation. Brokers feel agrieved when lending criteria are changed without any warning or products are pulled without notice. Customers are even more put out when their submitted cases are rejected with no explanation offered.
Lenders also need to be consistent with the underwriting process. Criteria should be crystal clear. If a case passes one day it should pass just as easily the next. This is not always the case.
Ultimately the welfare of the customer needs to be paramount at all times. Whatever is best for the client is generally best for the broker and lender alike.
At the heart of the relationship is respect. Lenders are too often suspicious of brokers and rather than treating them as fellow professionals, there can be an element of mistrust and derision. We play different roles but we have a shared goal and should be equal partners.
In turn, brokers must take the time to learn as much as there is to know about the lenders and their idiosyncrasies. They must only submit cases when they are sure the lender’s criteria has been met. Lenders do not take kindly to brokers who chance their arm with unrealistic cases and this will be even more sensitive under the heightened scrutiny of MMR.
Lenders have had very individual reactions to MMR and brokers will need to be understanding as lenders finesse their processes. For example, there is not a uniformed approach from lenders to budget planners and this will complicate the assessment of affordability.
Neither lenders nor brokers want to stem the flow of mortgage approvals and as the assessment of clients becomes more rigorous, it will require an efficient and seamless working relationship between brokers and lenders to keep up the momentum. Lenders need to move towards the intermediary market and rely on our expertise to bridge the gap.
We are used to providing quality financial advice to customers looking for a mortgage. We are used to delving deep into their finances to find the most appropriate products on the market. We are also used to the highest levels of scrutiny from the regulatory authorities.
It is a shame the relationship between brokers and lenders was not addressed specifically in the MMR as ultimately our conduct with one another has a direct impact on clients. The closer we work together over the coming months, the more apparent this will become.
Dominik Lipnicki is director of Your Mortgage Decisions