Most lenders still receive intermediary business in paper format, according to Marlborough Stirling's mortgage benchmarking study.
Of the 17 lenders in the study, 13 receive over 70 per cent of introduced business in paper format. Lenders have to re-enter information into their processing systems, leading to increased costs and a higher risk of errors.
But half the lenders sampled will make key facts illustrations available to intermediaries via their websites in recognition of the importance of being competitive in a regulated environment come M-Day.
The mortgage benchmarking study has been developed with the Council of Mortgage Lenders. Data is fed into a mortgage processing model which enables participating lenders to evaluate business costs, quality and productivity.
The survey found the cost of processing a mortgage has dropped from £116 in 2003 to £89.67.
Marlborough Stirling estimates that if all lenders streamlined their operations in a similar way, £44m would be saved across the sector. This figure is based on the number of loans processed in Q3 2003 to Q2 2004, which the CML estimates at 3,803,000.
Productivity per employee increased from an average 1.56 completions in 2003 to 1.7 in 2004. But the time taken to process mortgage applications remained consistent at 16 days in both years.
Director (product development) Phil Heaton-Jones says: “While forthcoming regulation appears to be acting as a catalyst for the industry to review internal processes and back-office systems, we also hope that this study is helping lenders to identify areas on which to focus. Next year's study should enable us to assess the true cost and quality impact of mortgage regulation.”