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Standard issue

The recent news that Mortgage Trading Exchange has opened the standard interfaces it has developed with lenders so they can be adopted by other users paves the way for some welcome pragmatism to break out in the mortgage industry.

It has never been helpful from the adviser perspective that there have effectively been two polarised ecommerce hubs – Mortgage Trading Exchange and Trigold’s E-Trading Centre.

This has been further complicated by the former platform being owned by six of the seven biggest lenders in the UK – Alliance & Leicester, HBoS, Nationwide, Northern Rock, Royal Bank of Scotland and Woolwich, which collectively account for 65 per cent of all mortgage business in this country, whereas Abbey is a significant shareholder in Trigold.

This has clearly contributed to a situation where advisers cannot apply for agreement/decisions in principle or submit electronic applications for Abbey’s products on MTE and nor can they carry out similar functionality for Alliance & Leicester, any of the HBoS lenders other than The Mortgage Business, Nationwide or the various Royal Bank of Scotland brands via ETC.

This does not help advisers or their clients. In offering to open its standards to other systems, MTE is putting on the table a solution that can deliver value today rather than the promise of it tomorrow. It also appears to be taking a constructive approach to the issue of how to future-proof its standards.

One of the major problems with standards is that they have the potential to inhibit innovation, especially if designed for rigid adherence. The mortgage market is rapidly evolving, with some highly creative solutions being delivered by companies such as Edeus, GMAC and others and nothing should be allowed to get in the way of this.

MTE tells me its standard has been designed to allow lenders to put whatever they want within standard XML elements. This will enable the lenders to select the elements they want to include within the XML “envelope”. For example, this could include their own unique questions which they might have within the adverse market or questions covering such issues as smoke alarms and particularly to cater for a wide range of approaches to occupation as well as product availability information.

MTE’s objective is to allow a balance between stream-lining and standardisation. Their process can be seen as an analogy to the use of postcodes, where the format can vary significantly from area to area but is based around common elements. The delivery of consistency without constraining innovation should be applauded.

One company which has already adopted the MTE standard is Mortgage 2000 which now ships MTE to all its users. Last week, I spok to its head of development, Roger Hones, who was highly complimentary about the MTE interface.

He says: “We did the work some time ago. It is a relatively simple process and it is simple to train the advisers to use it. There are benefits to having a common look and feel with send and track capability as well as form validation. I have yet to see anything better.”

It would not be fair to mention the MTE standard without making reference to the work being carried out by Origo, the life and pension industry standards body, in this area. Having originally announced its intention to enter the mortgage market in June 2005, Origo announced in February this year that it had received financial support from 13 lenders, later increased to 15, to establish mortgage sector standards.

With the year fast coming to an end I would expect that those lenders will want to see a clear indication of what Origo has delivered before committing to any further funding. If, in this period, Origo has been able to deliver robust industry standards that meet the needs of the adviser and lender community and are ready for implementation, this would be highly creditable.

But if it is still at the concept stage, there seems to be a compelling argument for lenders and other technology suppliers to take advantage of what is available now rather than wait on promises for the future.

I suspect that the action of the MTE shareholders, who account for such a significant portion of the market, in opening up their standards indicates which path they will be taking for the foreseeable future.

If Origo can develop an alternative standard and deliver a business case to warrant its adoption in the future, I would imagine lenders and others would be open to considering adopting an Origo standard but I suspect that, given they have a standard on the table that they have already paid to develop, they will be reluctant to put further funding into Origo until it has proved it can deliver.

Some people may argue that Origo has the ability to deliver a more open standard as MTE is itself a leading player in the market.

The important thing is to develop a situation where advisers can source mortgage products from the full market and be able to get Aips/Dips as well as submitting electronic applications using their chosen software provider rather than having to use different systems for different lenders.

Mortgage advisers do not give a hoot about whose standards are used or even if any are used as their priority is the functionality that any system delivers and how it helps their clients.

Electronic mortgage submission has been polarised for too long. MTE is offering a solution that can be adopted today and can deliver benefits. This should be embraced by lenders and technology suppliers so they can all start making life easier for advisers and their clients without further delay.


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