Samantha Cordon is a reporter at Mortgage Introducer
The job of a broker may feel like a thankless task some days but put yourself in the shoes of the post crash underwriter.
Dealing with tightening internal policy, woolly FCA guidelines and a popularity ranking coming in lower than traffic wardens – no thanks.
So with this in mind, should lenders be opening up a direct, two-way channel of communication to the underwriter, is it needed and can it be respected?
To address the first question – is there a need, I can almost feel the windows of the office rattle with a furious roar from brokers – “yes of course there is a need”. But if the decision is communicated clearly via the BDM or via a general email address why does there need to be another channel open to the broker?
The reason that came up the most from my discussions with brokers is that any small anomaly on an application, despite the broker providing back up documents, wreaks havoc with the turnaround time and can turn a “safe as houses” case into a “unfortunately we cannot proceed” situation.
I’ll give you an example. First-time buyer, 25% deposit, BP oil engineer, £55k per annum with a student loan. He had been earning danger money three months earlier for working in Angola but that bonus was not sustainable because he was now back in the UK so the broker had not included it. But, such a massive increase in salary had caused a huge leap up in his student loan during that time. Despite supplying three months payslips with regular loan payments showing, the underwriter used an average payment which made the mortgage unaffordable.
Direct access to the underwriter was not allowed in this case which resulted in several frustrated calls between the broker and the telephone team and after two weeks of wasted time and long letter of explanation by the broker, the underwriter conceded. If access to the underwriter had been granted on day one the wrinkle in the case could have been ironed out straight away.
It seems the most annoying phrase a broker can hear from their BDM or telephone enquiry team is “yes that seems fine SUBJECT TO UNDERWRITER APPROVAL”. It’s the biggest non-statement of them all and basically means I have no authority but by all means pay us an upfront admin fee and take your chances.
So it seems like a no brainer that a broker should be able to call their underwriter but I am not completely convinced, which brings me onto my second question – can it be respected?
The brutal truth is no. The well worn phrase, why have a burger when there is a steak in fridge, springs to mind. If you have your underwriter’s number look me in the eye and tell me you would not call them up to run a potential deal past them, check they have received your document and more importantly ask when they will look at it.
Then there are of course those brokers who could do with some anger management – we all know one, you might be sitting next to one who is as nice as pie until they pick up the phone and turn into Michael Douglas from the film Falling Down (in the film Douglas plays an unemployed defence worker frustrated with the various flaws he sees in society and begins to psychotically and violently lash out against them – sound familiar?).
All of this of course adds to everyone else’s turnaround time because underwriters are not underwriting either through the sheer volume of calls or because they are having a cigarette break after being berated because their nerves are shot to hell.
I know I sound like a primary school teacher but “it spoils it for everyone”.
So what is the answer? There are a probably a few. A broker friend of mine who had also been an underwriter for a high street lender wants to change the order of the process. Get the underwriter at the front end assessing the case as soon as it comes in and if the case is acceptable subject to valuation, take the application fee and valuation fee at that time. No direct access but a more sensible approach.
My own preference would be the underwriter being able to contact the broker, from a group email or number, but the broker cannot contact them. That way, if there is there an irregularity which is detrimental to the case the underwriter can call the broker to discuss the issue but cannot be contacted for progress reports or random queries.
Lenders have to be accountable for decisions and underwriters cannot be untouchable but brokers can’t have it all ways. Unlimited direct access will slow down turnaround times. So as annoying as a one way street can be in the middle of a busy city it may be the only way to speed things for everyone.