Lender Transparency

Should all lenders publish their application and response times? Sounds a bit over the top right but consider the following.

Brokers are at present very busy dealing with enquiries, some of which will get to application but many will not, nevertheless the broker will still be flat out dealing with these enquiries whether they come to anything or not. We all know that when dealing with new enquiries it is no longer as simple as using sourcing systems to find a lender that fits the bill with the right product to fit the client, (something that has never been available in the specialist finance sector) especially given lenders propensity to constantly over egg what they are actually willing to lend on. This results in the process becoming very time consuming which all makes for a very busy and stressed out broker, when you then add to that the client and their expectations you can see why many brokers are having a very hard time of it at present. This unfortunately is being made even more difficult by working practices of many lenders.

Imagine then a broker who is trying to manage his/her client’s expectations with all that the above entails and in doing so has to honestly notify the client of likely timescales for their application to go through (the proverbial how long is a piece of string question). This is a regular occurrence whether you are talking term loans or bridging loans, commercial finance or development finance and the dilemma faced by the broker is twofold. On the one hand they have the worry of competition, if they tell them the truth they run the risk that the client may then approach another broker who will say they can get it done quicker knowing full well they can’t (a shameful practice that is rife within our industry), on the other hand if they were to bend the truth a little they then have to face the inevitable conversations around the clients frustration at how long it is all taking and risk any potential future business with that client.

Clients are naive it’s a fact, I do not mean this in a disparaging way as it is unfair to expect them to know let alone understand the nuances of lending in as much detail as a qualified professional mortgage broker who deals with these nuances day in day out but they’re naive in the sense they remain blissfully unaware of such nuances. Therefore it will always seem unbelievable when you notify them that the lender may take 5 working days to respond to an email or you may need to spend upwards of 3 hours trying to get through to a lender on the phone. All these things take time out of a broker’s day and leave little time for appropriate communication with their client who likely believes their mortgage is the only mortgage the broker is dealing with. We know this to be true as we all deal with this every day, clients calling frustrated they have not heard anything, or you have not returned their call or responded to their email in a timely manner.

I would suggest there is some help lenders could give to brokers that is not onerous for them to provide and would at least alleviate the burden of client expectation, that is to say take the stress out of justifying why an application is taking so long or going to take so long.

ALL lenders should at the very least publish their application & response times on a regular basis (at least weekly) so the broker can provide the same to the client quickly and easily, the client will then know for certain their application is part of a process, it may not remove their frustration but it will at least be understood. This will in turn also remove the worry of competition, the threat of losing the client to another broker who has perhaps not been so honest in the hope of winning that clients business, the client would be able to see through this and challenge it as opposed to being hoodwinked into dealing with them.

We all have to be transparent with fees, rates etc how about transparency with service standards too?

All thoughts welcome in the comments section.