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Lenders pausing business

Journalist: Anna Sagar, Mortgage Solutions / Specialist Lending Solutions

ended 20. August 2022

Looking to speak to mortgage brokers about lenders pausing business. A few more lenders are pausing new business, and some of them have been reporting heightened abuse from brokers towards their staff due to frustration and long timescales. 

Brokers have also been frustrated as some lending staff have appeared to be unhelpful or unsympathetic and are getting criticism from clients and other people in the chain. 

  1. Are there things that lenders could do differently when pausing new business ? (communicate earlier, clearer idea of timescales etc)
  2. What can brokers do differently? (packaging, client communication)
  3. What can the mortgage community as a whole do to better work together?

5 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
With mortgage deals being removed at the flick of a switch there is no doubt that the whole industry is feeling the pressure. Advisers have researched the best product for their customer, completed the paperwork, presented the recommendation and then often find the deal agreed is no longer available and it's back to square one. It's extremely frustrating. There have been reports of staff being verbally abused, and this is unacceptable. We need to work together as an industry. It should be clearly stated on a lenders website if they are pausing business or removing a product, but this is not always the case. Equally, advisers should ensure their cases are packaged correctly first time in order to take the strain off lender, and provide their customers with the best experience. The best solution is for the rate market to stabilise, but we may be a little way from this yet.
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Imran Hussain
Director at Harmony Financial Services
I am entirely sympathetic to any frontline staff at lenders that are dealing with the calls coming in and getting an earful which they should not be getting as those in ivory towers are making the decisions which impact them; if a lender is looking at pausing for new applications, they must have a date in mind when they wish to return to the market or simply re-price or not accept a specific type of business that is time-consuming for them and their system; there are some lenders who have staff over a different part of the world with no one you can actually speak to in the UK which also adds to further frustration. The biggest thing lenders should be doing is setting out from day one what they require to make a decision on the lending from the outset, as there are lenders who are doing this and not having issues with timescales and especially those that deal with slightly more specialist cases, as there are many brokers who I speak to who are at the end of there tether with constant requests for more documents and more explanations on really a simple case as it make not only the broker and lender look bad it puts the whole process into disrepute. What brokers should be doing then from day one if they know a lender has specific requirements for documents ensuring they are uploaded at the same time as the application goes in to ensure speed of service and underwriting from the lenders, as my conversations with lenders indicate there are many brokers who are not doing the basics in the first place and looking for someone to blame when they upload income verification documents five days after the application but this can and is caused by products being removed at short notice and we all want positive client outcomes, as a whole community we need to have open and honest communication no cloak and dagger just say it as it is so everyone knows where they stand so client expectations can be managed correctly.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
It can't be that hard to streamline things. Look at Halifax who whilst they're working on a 25 year old system just make it work. You attach documents, call them up and if it's acceptable they tick it off. If nothing else is outstanding the case goes to offer. Underwriters are reserved for complex cases, freeing them up for that workload. On the flip side you have plenty of firms are taking weeks to look at a payslip before the case goes through about 3 teams in as many continents when it really doesn't need to. That is just inefficient.
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Jamie Lennox
Director at Dimora Mortgages
I feel for the staff that have to be on the front line, but we're talking huge organisations who should have been far better at being proactive instead of currently being reactive. In our minds, there is a better way instead of just pausing new applications or withdrawing deals at little to no notice, as these both create a further bottleneck of applications flooding in before the deadline which could also lead to brokers submitting without all the appropriate paperwork upfront. If they took the approach that if an application has passed an AIP that a rate can be secure for a set period of time it would avoid panic applications and would allow brokers time to package correctly so it can be assessed fully the first time. Brokers need to be getting all documents upfront before giving advice in this current market. There is zero point in quoting a rate without everything on file as there is a high chance that the product will be withdrawn before the client returns the documents. Which I think is half the issue here as brokers are now submitting applications without everything on file which is a huge risk.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
Probably an unpopular view however I think it's sensible that lenders are pausing lending so they can catch up on the spiralling SLAs and hit the rest button. However, this doesn't shy away from the fact of lenders are criminally under prepared and not communicating to inform us of the reasons for their delayed timescales. Frustration does fall with brokers when lenders pull rates in a instant which affects our services as we are on the front line delivering the bad news to prospective buyers. A lender such a Coventry is trying to bridge the gap with a pledge of keeping rates in place for 48 hours before they pull or increase them. This gives brokers a reasonable amount of time to secure a deal. In conclusion lenders need to be transparent and honest. Make a change and take ownership in the market. Your profits will be bulging this year but lets keep things fair.