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Brokers - has lender communication been good enough?

Journalist: John Fitzsimons, Freelance

ended 04. October 2022

Hello brokers

This weekend the boss of the FCA suggested lenders should provide a timeline for when they will be relaunching mortgage products https://www.mortgagesolutions.co.uk/news/2022/10/03/fca-chief-executive-says-lenders-should-provide-timeline-for-product-returns-report/

How would you say lender communication has been generally around product withdrawals and repricing? Have there been any that have done a particularly good job, or any that have stood out for being less than good?

What could lenders do differently if and when this happens again, to leave brokers and borrowers in a better position?

5 responses from the Newspage community

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Gaurav Shukla
Managing Director at Home Me Mortgages
Usually lenders are pretty okay with rate withdrawals, giving brokers at least a day or two to get cases submitted to them to secure the rate. However, what we have seen over the last week or so is some lenders withdrawing products with no warning at all, or very little. This doesn’t give brokers enough time to get cases submitted so there will always be some borrowers left worse off. For me, it always comes down to the fact that lenders don’t speak to customers throughout the application journey, so we face the brunt of it when we have to let customers know that the product is no longer available and the next best rate is a lot higher, meaning they now have to pay much more per month. I don’t want to name lenders that have not done a good job with rate withdrawals and repricing recently, but rather focus on the lenders that have. Halifax, although they have repriced several times over the past 2 weeks, at least give two days’ notice of when rates are changing. Coventry have also kept up with their long term promise of providing a minimum of 2 days for any rate changes and I have to commend them for sticking to this, when we have seen other lenders give no notice and pull rates immediately. I stand with Nikhil Rathi, Chief Executive at the FCA, regarding lenders notifying when products will be brought back. As brokers, we know the lenders will reprice, but it would be great if we know when they are to return. As for the public, the media published a lot of news about lenders pulling rates and not lending. This was incorrect and created a panic where it was not needed. Lenders want to lend, and the panic could have been resolved by lenders stating when they will have the new rates available.
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Riz Malik
Independent Financial Adviser at R3 Wealth
On one side you have Coventry Building Society and their pledge to give you two days' notice for product closures. On the other hand, you have some lenders who will give you a matter of hours or even withdraw products at the weekend. I would like to see lenders sign up to a voluntary charter where they are required to give at least two days' notice. That would not solve the problem but would certainly help.
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Imran Hussain
Director at Harmony Financial Services
Some lenders have been fine and given some form of notice; some have given a little more leeway and allowed a few more days to allow an application to be submitted, namely foundation home loans, whereas some lenders have removed and repriced products at the drop of a hat and left advisors and clients up the creek.
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Mike Staton
Director at Staton Mortgages
I think communication on the whole has been dreadful, for instance, Natwest announcing a product withdrawal on a Sunday is apocalyptic if you are booked in for your mortgage application on a Monday. You do have to have an ounce of sympathy however for the lenders as it all rolls down from the top, i think the silence is deafening from the bank of england and the air of uncertainty around the base rate at the moment is causing lenders to make knee jerk reactions to prevent an abundance of applications from flooding in.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
Lenders need to give at least 48 working hours' notice when withdrawing products. This will allow ample time for brokers to submit applications and obtain any final proofs from the client. In the past couple of weeks, however, lenders have given very little or no notice. One lender sent an email at midday and withdraw their products at the same time, so there was no notice at all in that situation. This then causes the stress of going back to the borrower to tell them that the product that was recommended, is now no longer available.