Ian McKenna: Making mortgage advice easier through technology

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It has become far more difficult for mortgage advisers to provide potential borrowers with certainty their loan will be accepted in a post-MMR world. For the client, it can a very emotional process.

Iress, working with Experian’s HD Decisions business, has introduced additional functionality to its Xplan Mortgage software that enables advisers to give clients greater confidence their loan will proceed. This column will look at exactly how it works.

After taking the client through a sourcing process, the adviser revisits the applicant’s data to run the enhanced affordability search. The system then prompts them to provide the more granular level of data needed, such as income and expenditure, length of address history, permanence of employment, dependants, marital status and so on.

If an adviser tries to proceed without having completed all the mandatory data for an eligibility search, a summary screen appears that highlights the missing elements.

Once all the sections are fully completed the user is returned to the sourcing screen so they can refine the borrower’s requirements for the loan (for example, fixed rate periods, cashback, early repayment rules, low valuation fee and free legal costs). Having selected the desired features, the adviser can then run the eligibility criteria against the suitable loans.

This returns a page showing the likelihood of approval by each lender. These results will have passed a credit bureau, affordability and credit record check.

Stacking up the positives

A major advantage of this system is that it delivers information without resulting in a hard footprint on the borrower’s credit record and impacting their credit rating. This would be the outcome if a full application had been made to each of the lenders’ extranets.

Advisers can then proceed to submit the application in the same way they have used Xplan Mortgage previously or they can take the user through the range of tools it provides to compare the different loans.

The current version will not address customers with questionable credit or complex needs. What is more, buy-to-let, shared ownership or shared equity are not yet included. However, even without these, the system will help process the vast majority of applications in a far more timely fashion.

It could save an adviser hours qualifying applications on different lenders’ systems and identifying where a borrower has adverse credit history or judgments much earlier on than in the usual process.

Importantly, the service gives the adviser the ability to indicate why a client might have been declined. Due to data protection limitations, it has previously not been easy to identify if an advance has been declined because of the policy rules, affordability or scorecard.

This service is not calling the lenders’ native underwriting engines, or Experian’s PowerCurve system, but one that HD Decisions has worked with a number of lenders to build using an affordability score.

Indeed, Experian has a big box of tricks that could have some widespread use across the industry, and I see this development as just the start of delivering far better capabilities.

Thinking about the potential for these services, I can certainly see us getting to final underwriting decisions, subject to valuation, with a client in an adviser’s office.

In the meantime, this software release is already providing a significant step forward for mortgage advisers. It is delivering the sort of enhancements to the mortgage industry that we have already seen in protection through services like iPipeline’s Xrae and Underwrite Me. On this subject, I understand Iress is also looking to enhance its own protection quotation services in the near future.

Iress plans to make it possible to pre-populate around 85 per cent of the data that has been captured in this process through to the lender extranet, delivering a further valuable time saving.

And as well as saving advisers a lot of time the service also enables a far better customer experience. Iress and Experian are greatly enhancing the quality of service advisers using their software can deliver. It will be fascinating to see how other mortgage sourcing systems such as Mortgage Brain and Twenty 7 Tec rise to this challenge.

Ian McKenna is director of the Finance & Technology Research Centre