More mortgage lenders should commit to minimum notice periods around product withdrawals, brokers have argued, following the lead of Coventry Building Society.
Research released by Smart Money People this week revealed that many brokers felt overwhelmed by the speed of product and criteria changes seen of late, admitting that they had struggled to keep up with changes.
Jacqueline Dewey, chief executive of Smart Money People, said: “Brokers are certainly frustrated that some lenders are changing rates on a Friday evening or Sunday, making them feel they need to work out of hours. With so little notice it’s adding a lot of extra pressure to already stressed brokers.”
Brokers told Mortgage Solutions that while the market has calmed since the height of the “chaos”, it would still benefit from more lenders introducing a minimum notice period for product changes, while some suggested that there should actually be rules in place stipulating how much notice should be provided.
Richard Campo, founder of Rose Capital Partners, said that at the peak of “chaos” following the mini-Budget, lenders were changing rates with little to no notice, and “normally extremely reliable sourcing systems were unable to cope”.
He added: “We often had to stay up until midnight to secure products and our broker WhatsApp group was alight with constant updates to keep the team updated. While a tough period which has now thankfully abated, it just showed that you simply can’t rely on technology during times of extreme change and brokers that didn’t have to place deals before sourcing systems may well have struggled.”
There is an element of “safety in numbers”, according to Dominik Lipnicki, director of Your Mortgage Decisions, with all of the advisers in his team speaking and comparing notes. “We encourage everyone to shout when they have a criteria issue and the advisers are very quick to respond.”
He added that improving the amount of notice provided was key. “We are after all on the same team here. Last minute overreactions, sudden product withdrawals make all of our lives more difficult.”
Ian Hewett, founder of The Bearded Mortgage Broker, said email alerts mean that he hears about more criteria or price changes, though “this is not always 100 per cent effective”.
He added: “I also have some fantastic support from my fellow brokers across all social media platforms as in general we are all very supportive of each other.”
Hannah Bashford, director of Model Financial Solutions Limited, said that she has always made a point of double checking clients are still getting the best rate on the day the application is submitted.
“In practice what it does mean is that we are potentially having to have more conversations about what product the client is going to get but it ensures they are getting the best product for them,” she explained.
A fair amount of notice
Campo praised Coventry for sticking to its pledge of providing 48 hours notice of product changes, even when the market was at its most manic. He added: “The usual suspects communicate well – Halifax, HSBC, Coutts & Nationwide jump to mind – but I don’t begrudge any lender for not communicating to the standard we would expect. When you have such a short, sharp shock to the economy, lenders had to reprice quickly.”
Riz Malik, director of R3 Mortgages also pinpointed Coventry Building Society as being deserving of praise for its two days’ notice policy, adding: “If other lenders followed in their footsteps that would be amazing.”
Having a good relationship with lender business development managers is crucial, according to James Miles, director of The Mortgage Quarter, as it can help you keep your finger on the pulse of what a lender is doing.
He continued: “A broker’s dream would be seeing rates issued weekly so expectations could be managed, however this would no doubt reduce competition.
“Lenders such as HSBC, Halifax and Accord are leading the way by allowing clients to change their rate mid-application should a better one be available. Coventry are still head and shoulders above anyone else if they pull rates by keeping to a 48-hour notice promise.”
Setting a standard
Elliot Benson, owner of Sett Mortgages, argued that it would be useful for there to be an agreed timeline in place for notice before products are withdrawn across the industry.
He added: “It would be very helpful to prevent customers losing out due to unrealistic time constraints to secure a product.”
Bashford suggested there should be rules in place which prevent lenders from withdrawing and changing rates with no notice as “all it does is cause mayhem and it is not treating customers fairly”.
She continued: “There has apparently been an uptick in customer complaints around clients not getting the rate they wanted and therefore going into a higher rate because brokers have made a mistake in processing the application or not having time to process the application before the rate has changed- the only people losing in this scenario are the clients.”
However, Campo questioned if there is much more lenders can do, noting that so long as brokers get email notifications, the onus is then on the broker to actually read them and “not just the sometimes misleading subject headers”.
He added: “A phone call is always appreciated and they could use social media more. A simple update of ‘our rates are changing TIME and DATE, see website for more info’ would be very helpful indeed.”