When asked what my biggest frustration of the past four years has been, it’s probably the lack of common sense shown by some lenders.
Let me take you back into my life story for a bit. Cue music from Tales of the Unexpected music (the under 30’s can Google that one).
I became a mortgage adviser at the age of 21 with Halifax. I spent four happy years working my way around the south coast whilst learning the ropes (or so I thought at the time).
Moving to Cheltenham & Gloucester in 2000 after a year in recruitment opened my eyes. For the next six years, here was a land where individuals made decisions in-house instead of relying on computers and I dealt with a wide range of mortgage brokers across the country.
Underwriting applications gave me the depth of experience that I now use every day at Lentune – for which I will always be grateful.
Some brokers I encountered were good, some were bad (and some moved to Northern Cyprus when regulation kicked in) – but that experience sowed a particular seed in my head.
After my own manager left the company to become a broker, I knew what I wanted to do – the time had come to spread my wings.
After moving to a national IFA for two years, I experienced the harsh end of the downturn with redundancy in October 2008 – then Lentune was born during an ad break on Midsomer Murders.
Back to here and now, a recent case for a first time buyer couple highlighted for me where lenders have gone wrong since.
I fully understand why lenders brought in affordability calculators and automated decision systems – so I won’t dwell on this area or teach you to suck eggs on that subject.
However, what concerns me most is some lenders’ over reliance on these ‘systems’ to generate underwriting decisions.
Or mainly – their unwillingness, or inability to be able to override these systems.
My clients have run their own online business for many years. After working and travelling for a few years they returned to the UK and their latest business results increased significantly as a result.
We obtained a projection for the next 12 months to show the continued growth expected, however, the lender could not accept this scenario and the affordability calculator offered a lower figure than previously agreed, due to a difference one year in how their joint income was split.
As a result, the clients had to provide an additional deposit on top of the 25 per cent already provided. Although all 49 pages of evidence submitted backed up the case, the response was ‘we can’t override what the system says’.
The decision was returned simply by an email – where just a phone call from the underwriter concerned would have allowed both parties the opportunity to discuss the case, and the background to it.
Instead, I spent the next three or four days sorting the issue with the lender, causing more work for each party and uncertainty for my clients.
It’s time for some lenders to empower their staff more.
I appreciate the circumstances of today’s market – but let’s not over complicate matters further by removing one element of mortgage underwriting which has stood the test of time – common sense.
Stuart Gregory is director of Lentune Mortgage Consultancy