assessing quality but can be altered according to the volume of business a lender wishes to take on at a particular time. So a prime client who would have qualified for a mortgage one week may not pass a credit score at another time. For intermediaries used to criteria driven mortgage decisioning, this is frustrating but ultimately requires brokers to factor that into the reassurances they give clients.

The other has greater ramifications for intermediaries, particularly for the longer term. Ongoing assessment of business from intermediary firms as well as individual brokers by specialist teams which takes into account ongoing performance of all mortgages, is going to have a radical effect on which firms and individuals they will actually want to do business with in the future. The days of ‘fire and forget’ mortgage

procurement, where once the mortgage had been agreed, the broker had no further responsibility for subsequent poor loan performance, are now at an end. The effect this is having is already being shown by the number of brokers who are no longer able to submit cases to particular lenders because they have been deregistered. In some cases, intermediaries are finding that just having been associated with a firm that has been banned is enough to ensure that even though they themselves were innocent of any malpractice, the association was enough to have them deregistered.

Wake up call

It is a wake-up call for us all. As intermediaries our responsibility is not only to our client but also to the lenders to whom we introduce business. I am sure that the majority of brokers would consider this to be a no brainer but we only have to look at the future of ‘fast track’ to see the problem faced by lenders. We all know how important fast track is as a concept and how useful it is for the kind of clients for whom it was designed. However, as we have seen, the principle has been abused in the past and if the FSA is going to be persuaded that fast track is a legitimate

mortgage introducer MAY 2010 27

option then we are going to have to work to ensure that not only are our clients’ best interests served but also those of the lenders we deal with. The prize at stake for all intermediaries is the ability to offer a ‘whole of market’ service to clients in the future. Lenders, both existing ones and those seeking to enter, are committed to eliminating risk in their lending, regardless of increasing competition for new business in the future. Therefore, it makes sense that they seek to do business where there is a corresponding interest in compliant and high quality business.

OutcOme

The outcome for intermediaries, particularly for smaller firms involved in mortgage advice, will not only be about maintaining lender relationships but enhancing them through effective monitoring of income proof and past credit history, as well as good throughput of cases. For brokers who are considering whether the AR or DA route is best for them, I would suggest they take a hard look at whether they believe they are going to be able to

offer lenders the kind of peace of mind they require in the long term both in terms of quality and quantity. From our experience in the last six months, it is becoming increasingly obvious that lenders are keen to develop strong relationships with networks, not only because of the potential business that a grouping will represent in the future but also to help them meet their quality requirements as they have begun to appreciate the monitoring role we provide on behalf of our members.

It is clear that the mainstream mortgage market has changed completely. Funding issues aside, the emphasis is now on ensuring quality before quantity and while the market is dominated by a few big names, new lenders coming to market will adopt the same attitude to risk. If the intermediary channel is to continue to be valued, the provision of volume business is no longer the main criteria. Quality is now the watchword and intermediaries who ignore that are going to find themselves out of the industry because there won’t be anywhere else to go. n Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48