Sourcing systems accuracy and sub prime mortgages
Existing sourcing systems’ main USPs for brokers have traditionally been as a means to source mortgages from a wide range of lenders quickly and to be able to produce compliant quotations. The overall accuracy of the current crop of systems can be summed up by, until recently, a steadfast denial of responsibility for the content. The sourcing systems claim that they rely on the lenders for updates, the lenders claim that they provide the updates but the sourcing systems do not get the information out there quickly enough and sometimes it is wrong. The overall result is that the process is riddled with human error and therefore accuracy is lost.
MBL’s move to show products which have been ‘vetted’ by the lenders, which the lender is willing to stand by is a start. Trigold’s database is also a move in the right direction but even here, ironically information is still sometimes out of date or not correct.
The FSA will undoubtedly expect that consumers have access to accurate illustrations from their intermediaries. It has long been accepted that any broker worth their salt using a sourcing system checks with the lender to ensure the accuracy.
But going forward why should this be? If one is paying for software it is not unreasonable to expect it to do what it says on the tin.
To get around this problem at Mortgage Pro, the new sourcing system, due to be launched in March, we have designed a simple piece of software which sits on a lender’s PC. It contains a vetted version of their complete product matrix. Any rate changes, new products or withdrawn products can be quickly input and emailed to Mortgage Pro. Once vetted and acknowledged, the new information is then sent to every user of the Mortgage Pro system. so that all data held by Mortgage Pro is totally accurate at all times and in real time. In the unlikely event of a Mortgage Pro user having an issue over accuracy, a complete audit trail is available to both lender and user thereby ensuring that any dispute can be quickly resolved. It is our intention to be linked to every UK lender, bearing in mind just how easy the update software is to use.
The idea of a central database has its attractions but unless it becomes mandatory via the FSA, I cannot see any of the current crop of sourcing systems agreeing on content, access or ownership.
If I were a lender, I would not agree to stand by information on any sourcing system unless I had complete control of the input. Given the continued problems with sourcing system accuracy, it is hardly surprising that in the past no lender was prepared to put their head in the noose and agree to compensate brokers if errors had been made.
Much has also been made of how difficult it is to source sub prime mortgages properly via sourcing systems. Again, when you think how little underwriting information is actually carried by sourcing systems generally and the variations of product that are available that are not really represented fully, again it is not surprising that three of the biggest names in sub prime, Mortgages plc, Platform and GMAC have all publicly complained about how badly brokers are served by the main sourcing systems.
Peter Stimson at GMAC has 3000 variations to his products. Mortgage Pro will be the only system which can accurately source GMAC mortgages from their full range. Lenders with menu systems like GMAC will also see that their products will be faithfully reproduced and their brokers will benefit from a better service as a result.
The only answer for serious brokers is to invest in a system which lenders will update in real time and stand by the data. A system whose core database is not constructed in such a way as to accomodate the whole product matrix, can only be looked up on as an indicator of costs and product selection. Professional mortgage broking and FSA supervision will not allow ‘nearly right’ mortgage selection in the future.