Whilst there are one of two notable exceptions, the pulling of mortgage products without adequate notice is a bad practice that almost all major lenders have been guilty of this year.
I feel it’s about time they showed their genuine commitment to mortgage brokers by committing to a 48-hour best practice for withdrawals.
Surely if the top 10 lenders all signed up to this, it would reduce the potential for any of them to leave themselves over-exposed at the top of the sourcing lists.
Looking back over my 25 years as an adviser, it’s hard to remember a more stressful time (with the exception of 2008).
We have found ourselves very much on the front line recently trying to keep our clients calm and fully informed about the impact of the recent sudden rises in interest rates.
Despite all the turbulence, brokers have somehow managed to keep their service standards up in 2022 when many others in the property food chain have seen theirs fall to pieces, including most lenders and many conveyancers.
The impact of late notice of withdrawals is extremely negative. Advisers’ standards can occasionally slip in a rush to get cases submitted on behalf of anxious clients and that can’t be what lenders are looking to achieve long-term in terms of business quality.
Sometimes the withdrawal announcements happen late in the day and, now and again, the cut off is as late as 10.30pm. To me, this feels like the lender thinks they are doing the broker community a favour but it also puts pressure on us to work late into the evening, which of course most of us do anyway. It’s rare for me to finish earlier than 9-10pm at the moment. Lenders are not helping brokers' mental health.
Despite us being regularly informed of “squeezed margins”, I understand some lenders are actually making record profits and have already smashed 2022 targets. Perhaps it’s also about time lenders showed their commitment to our sector by making two strategic investments:
- Invest in technology that lets brokers pre-book funds at AIP stage
- Redistribute some of those profits by way of an increase in proc fees
We hardly ever seen lender proc fees increase and this is way overdue in my opinion, as is an increase from the frankly paltry amount paid for product transfers. Lenders can afford this now and I can assure them brokers would appreciate the gestures as a true statement of intent.
I feel it’s about time lenders committed to a 48-hour best practice for product withdrawals, both for the sake of clients and brokers' mental health."