A broker is a champion for a consumer, fighting and toiling to secure finance to help clients fulfil their dreams of homeownership. But as the dispenser of valued advice, who is able to advise the adviser when they run into a problem?
In a brokers’ arsenal of weapons should be a business development manager says Lea Karasavvas, managing director of London-based Prolific Mortgage Finance. As the contact between broker and oft-faceless lenders, a BDM is armed with the knowledge of all the intricacies of what a lender is looking for in a case and will be able to help shape an application so it can go through the motions as swiftly as possible.
I asked Lisa Ferrari, London-based Northern Rock BDM, and Lea Karasavvas, managing director of Prolific Mortgage Finance, how brokers can increase their probabilities of making a completion with a BDM at their side.
Yuan Phoon: What is the day to day life of a BDM?
Lisa Ferrari: I cover the EC1 to EC4 postcodes in London and that captures about 450 individuals from one-man-bands to larger firms. As a result I need to be very structured so I plan my day-to-day business by location and then have a number of set appointments in that day. If a client has to talk to me for any reason, I’ll find out when I’ll be in their area and plan accordingly.
I’m on the road constantly. We do have a base in Hounsditch where we can operate from, but my job is primarily face to face.
YP: What is the typical reason that a broker calls you out for?
LF: I would ask my brokers to contact me to discuss a case from the outset. The first port of call is talking about shaping a case. Does it fit? Is the risk appetite there for the product? Is it a case for Northern Rock? So then we look at the customer and find out what documents we’d need. The broker hopefully will then have a further chat with the customer and then they’ll start to narrow down the market place.
Lea Karasavvas: One week despite Northern Rock’s insistence various processes would take 72 hours, Lisa pulled out all the stops and had these things resolved in minutes.
LF: We have service standards published on our website so the broker can always see exactly how long is required for each step of the process. If a broker comes to me with the particulars of a case and they have a narrow deadline that is something I will try to work through for the customer, for the benefit of them, the broker and for the company. I’ll try to ensure that the client actually achieves that deadline so the broker gets paid and the company gets a completion. It’s paramount for a broker to talk to the BDM first. If the broker and myself say to the company that every case is urgent, then the system is going to break down because it isn’t realistic. If we know at the outset what timescales the intermediary and his or her clients are aiming for and the case comes in appropriately packaged with the correct documentation, then we are more likely to be able to achieve a set deadline for completion; and of course there are some cases that will become urgent, so all of that will help ensure things go as smoothly as possible.
YP: How integral is the BDM and broker relationship?
LK: It’s key. Without a good BDM it’s a bit like going into battle with no weapon. We can find the rates, we can find the products but sometimes there are instances when you do feel a little helpless in this job.
LF: At times a broker may not be wholly familiar with the challenges each lender is facing; how the market is, how internal targets are changing, or the need for different paperwork for example. At those times the relationship between a BDM and broker is key. Taking 10 minutes away from the phones and everything else to talk to a BDM and understand what is needed, at that time and for that specific lender - it’s a matter of knowing which cases suit which lenders. It saves time and money.
LK: We always advise clients that it is not always about rates. It’s also about service and that is one thing you get with Lisa. Northern Rock’s underwriters are superb but on the occasions where they are under pressure due to levels of applications, Lisa is an extension of their expertise and can really assist with criteria questions as well as service level agreements.
YP: What advice would you give to brokers who don’t have that relationship with a BDM?
LF: My advice would definitely be to touch base with your lender. Contact your network or clubs and find out who your national account managers are and arrange for your local business development manager to come and see you. If you’re part of a larger setup, invite them along to a team meeting. I went and did a 20 minute presentation with Lea and around 20 other of the Mortgageforce guys. We had a Q&A session and you learn a lot in that type of environment.
LK: There were a few points you raised in it that some of our brokers were unaware of and that is the beauty of having these presentations. No one knows lenders’ products and criteria better than the BDMs. That is after all what they are out there promoting. When you’re armed with excellent BDMs your criteria knowledge of each lender is greatly enhanced. We all know rates and if the job was just about rates the role of the BDM would be nowhere near as fundamental as it is now. In the current climate it is all about criteria and all about underwriting and this is where the BDM is crucial.
YP: Are there any examples of clients being protected as a direct result of BDM intervention?
LK: In a couple of instances there are cases that you think you will not be going anywhere without a BDM’s intervention. We are sometimes threatened with properties being put back on the market if exchanges are not done within a timescale. If the expectation is that these targets look like they will be missed, Lisa will do all she can to try to get those deadlines reached. She has often ensured that valuations are instructed promptly to help me to meet vendor expectations and that offers are out as quickly as possible.
LF: I’ve known Lea for many years and I express this to all my clients - as a lender we have a policy but there are often occasions where we can work with a customer, or with a broker. We can apply a common sense approach and look at the overall risk profile. Instead of giving a black and white answer, there can be room to work with a BDM.
YP: So what could brokers do better with BDMs?
LF: Well there’s a bit more to it. There’s the broker, the customer, the company and it’s about all of us working together. I’ll treat the broker as my colleague so the first step is for them to get in touch with us and we’ll tell them everything that is necessary. Then they can fact-find and research all the particulars correctly at the outset, package the application correctly and get it submitted. It’s a cliché but they can get it right first time. That way the BDM is giving you the right advice, the right guidance and the right support from the outset.
LK: It is that attitude that governs respect. Lisa treating us as colleagues means we instantly recognise she is working with us. She is battling as much as we are to get cases through for us. Some firms see the visits of BDMs as a bit of a nuisance and that is where I think brokers are missing a trick. By taking time out of your day to welcome and get to know your BDM, the working relationship will be a lot more successful without doubt. The essence of a broker BDM relationship is respect. If you are not giving BDMs the time of day to meet you, know you and discuss things with you brokers can never expect to gain that respect.
YP: What is the trickiest part of the process?
LF: Sometimes it can lie in the customer’s lap or sometimes the broker doesn’t always ask precise enough questions, so what the customer hears and what the broker is asking may be two different things. For example when credit searches are done, there may be some undisclosed credit and then when it comes to underwriting you stumble. It’s just clarity; when the case first comes in, it’s not quite how it seems so when it comes to be underwritten it isn’t as smooth as it ought to have been. It could be as simple as someone putting all their salary in as basic when they have received a £10,000 bonus.
LK: The trickiest part of the process is the comprehension of the case for the underwriters. It is our role as brokers to create as clear a picture as possible. On the more complex cases where the income streams are varied, where the employment history is out of criteria, the assistance of the development managers is crucial. We have the pieces of the jigsaw effectively and they assist us in putting it together. Sometimes the restraints of the online systems mean that you can’t submit a case the way you would like to and that is where we require assistance. BDMs are trained in their systems, trained in their criteria and anything that is not straightforward, I’ll dial Lisa and talk it through.
YP: If a client does sit on an application, how can a BDM and broker help move it through?
LK: This has been eased a little in the current climate because rates are so volatile. With the curse of the late rate pull always apparent, we position with our clients that the rate could be withdrawn at any time so sitting on a case will simply mean that they could miss out on a rate. Lisa always informs us if she hears that rates are being withdrawn. We pass this information on to our clients and that prevents procrastination as they will simply lose the rate they have applied for if the application and its supporting documentation are not submitted in time.
LF: I would email the broker and call all of my key accounts to tell them they should be at the stage where they are DIPping for any final business they want to get in before a Monday withdrawal. Then any approved DIPs I have on my log that I know haven’t come in, I phone and email the brokers in each case to notify them they haven’t got their applications in yet and the rate is going on Monday. The cases which can be more difficult to manage happen when rates are withdrawn at short notice. I email my accounts again a week after the launch of a rate to clarify that the products can always be withdrawn at short notice.
