Right now, we are all battling the challenges of a volatile economy and a squeeze on our finances, thanks to the rising cost of just about everything, as well as rising interest rates. interest.
Brokers are facing huge high pressure fronts, with demand soaring as panicked borrowers rush to remortgage. Many are incredibly busy, struggling to place business as lenders have to keep lowering rates to reprice them based on market movements. Brokers not only need to keep abreast of all ongoing rate changes and product withdrawals, but also need to offer advice on a future economic environment for which the forecast is unclear.
In these difficult conditions, the relationships that we, lenders and brokers, have forged with each other over the years are particularly valuable. If there’s one thing the pandemic has taught us, it’s the merit of working together, sharing knowledge and experiences, and helping each other the best we can. As a result, the mortgage industry has come through this period more united and more efficient, with a range of technological solutions improving our working processes and deeper relationships than before.
We must continue to apply the lessons we have learned over the past two years. As lenders, it’s critical that we keep the lines of communication open and be as transparent as possible with brokers, giving as much notice as possible about product withdrawals and repricing, and being brutally honest about SLAs (service level agreements).
It’s undeniable that lenders are having service issues and need to tighten the whip and work very hard with underwriters, but we still haven’t returned to our target service levels as an industry and we may need the forbearance of brokers a little longer.
Martin Reynolds, Managing Director of SimplyBiz Mortgages, provides the following perspective: “Brokers understand that the constant price revision and product removal over the past four months has been driven by market volatility. But in order to be able to plan and manage client expectations, we need as much notice of withdrawal as possible, and lenders to be completely transparent about their turnaround times. In an ideal world, we would also be happy to have reasoning from lenders regarding decisions to pull or change rates. We might not like the explanation, but at least we would have some context that could then be passed on to the client. »
As lenders, we also need to ensure that our processes are as efficient as possible, as the process can of course impact the speed at which cases move through the pipeline. This is useful, for example, when lenders arrange on-demand appraisals (with fees paid), which helps drive out offers. But it is also a big help for us if brokers submit all essential documents correct the first time. It might seem like a big ask because it might take a little longer initially, but getting it right the first time really helps to get a deal done as quickly and smoothly as possible.
Sincere thanks are due to those brokers who work hard and strive to provide the best advice and obtain the most appropriate deals for their clients in this ever-changing market – and at a time when the financial situation of many clients may also suffer from the income crunch.
In particular, intermediary-only lenders, who rely on their brokers, are very grateful for the continued support and patience we have had.
Amidst all of this uncertainty brokers can rest assured that established mortgage lenders will continue to provide a safe haven for the clients that brokers bring, we simply ask that the intermediary community stand with us as we work despite the current headwinds. .
There are lights on the horizon! There are signs that markets are beginning to stabilize now, having accepted that economic growth will be weaker this year than immediately after the pandemic and given future rate hikes. The rate hikes themselves do not appear to have dampened demand for mortgage financing overall, which is good news for brokers and lenders. And there’s a lot of innovation going on, especially in the specialist sector.
So I hope that openness and honesty on the part of the lender, combined with care in initial broker quotes, backed by the strength of our partnerships, will lead us to calmer waters.
Adrian Moloney is Director of Group Intermediaries at OSB Group