Mark Graves is director of Pink network
With just days to go before the MMR is introduced, what concerns me is the messages being put out in the market via BDM’s, is it really helpful for them to be giving advisers their views on affordability?
The move to affordability is not such a big change for us, we already run a budget planner in Pink and have done for some years, it is part of our sales system not the lenders’. We do this in order to make sure the advisers are as informed and prepared as possible to make sure the customer has a mortgage that they can not only afford but which is accepted by the lender first time round. I am sure that other networks and advisers in the DA space will be making sure they have their own safeguards in place, if not they will be risking the fact the lender will return the case. Collecting items such as pay slips and bank statements has been standard procedure for some time in most sales processes; however the important part is looking through the bank statement and cross checking against the budget planner. I recommend advisers do this as standard procedure going forward if they do not already do so.
I am not sure this is the message coming across from the BDM community at large, as telling advisers “it is the lenders responsibility to look after affordability” as some of our advisers have been told does lead to compliancy.
While parts of that statement might well be true, as ultimately it is the lender’s responsibility, let’s see how far you get explaining that to the client when the case comes bouncing back. It is also logical that while it is the lenders’ ultimate responsibility to make sure that the client can afford the mortgage, if they are having a case introduced to them by a qualified mortgage adviser it is understandable that the lender will have expected the adviser to have done the basic checks already.
As we have seen lenders’ standards get higher where quality is concerned, it is very unlikely that these are going to be reversed under the MMR, it would make much more sense for the lenders to expect more from the brokers that they work with not less.
The other element implicit in this message from some lender BDMs is that the advisers do not need to know the ins and outs of each lender’s affordability matrix; but the adviser owes it to their client to place their mortgage with the lender from which they are most likely to get a mortgage that suits their needs, to do that they do need to know the ins and outs of what every lender requires. Flexible contract employed people comes to mind as an example of lender knowledge being required before submitting the case.
I am sure we will see criteria changes and definitions being re worded and modified post MMR, it will be the sharp eyed advisers who will benefit their clients the most. MMR has, if nothing else, made everyone re-evaluate their sales processes. My advice would be to cross check every piece of advice given to you at least until MMR has worked itself through the transition phase.