MBE 2012: The search for quality over quantity
In her speech, The Quality Agenda, Harle said the hunt for volume has been replaced by the search for quality.
She said: “There is no one set of measures used by lenders and for that reason brokers need to assume all lenders have zero tolerance for errors.
“Brokers need to embrace the quality agenda or else they will run the risk of finding themselves with nowhere to place their business.”
Harle said the main measures currently being used by lenders were application to offer, decision in principle to application, number of referrals, quality of the applicant and the potential to fall into arrears, business which has fallen into arrears and random sampling.
Decision-in-principle to application and the number of referrals are both used as indications of how well a broker knows a lender’s criteria, said Harle.
If a lender receives a high proportion of DIPs from a broker but not many applications it signifies that broker is using a scattergun approach to finding a lender rather than taking the time to read lending terms and conditions.
Similarly a high number of referrals alerts the lender that the broker is submitting borderline business with a consistent element of heightened risk in each application.
Harle said that while the employment of such measures is a positive force for improving quality there could be unintended consequences of quality metrics.
She said: “Brokers should not let quality measures influence where they place their business because they know which lenders are strict in certain areas.”