“The key is the strength of the relationships between lenders, specialty distributors, advisors and consumers.
In recent months much needed attention has been drawn to adverse credit and its relationship to the mortgage market.
Many specialist lenders and construction companies are leading the way both in terms of the education process and through innovative and highly competitive product lines.
There is no hiding the fact, or should there be, that loan demands are changing and many large lenders are struggling (or unwilling in some cases) to do so. adapt. The last thing we want to do is go back to some archaic and risky lending practices of yesteryear, but the point is that increasing levels of credit problems are emerging. In the vast majority of cases, these remain minor, but that does not prevent concerns about credit history and the future ability of consumers to secure a mortgage.
As such, we, as an industry, must rise to the occasion and meet the needs of these borrowers responsibly. The key is the strength of the links between lenders, specialist distributors, advisors and consumers. Despite much progress, there will always be difficult questions to ask of the lenders in the middleman community in this area, and rightly so. A recent study by Smart Money People suggested that brokers are the least satisfied with the way lenders deal with adverse credit and commercial buy cases. Based on broker feedback in its Mortgage Lender Benchmark, broker satisfaction with mortgage lenders’ handling of adverse credit events is 74.6%, rising to 77.1% for commercial cases. purchase-lease. The average satisfaction for all types of mortgage files is 81.1%.
When it came to adverse credit events, brokers were particularly dissatisfied with the timeliness of processing requests through to offer. The average adverse credit lender received a rating of 59% for speed, which is 15% below the average in all cases (74%). Broker satisfaction with the ease of determining the maximum loan amount was cited as another major weakness and stands at 76%, which is 7% below the average (83%). Meanwhile, the ease of determining product eligibility has proven to be the key point for brokers leaving feedback to commercial rental lenders.
This data is based on additional research from Pepper Money which suggests that the majority of people who have experienced credit problems in the past three years fear being denied a mortgage. Its survey found that 69% of those looking for a mortgage or new mortgage in the next 12 months fear their application will be refused due to their credit history.
We have spoken to many clients who, due to their credit history, felt they could not get a mortgage or re-mortgage from their current lender. On this basis, we are forming even stronger alliances with various lenders to help get this message across and ensure that our brokers have the knowledge and access to the types of deals that can help these borrowers achieve their aspirations for debt. property. In fact, we have just announced a referral agreement with Habito which will allow owners with a poor credit history to access the services of Impact’s specialized brokers free of charge. The deal will see Impact offer advice to these clients while waiving our standard fees.
It is these types of new approaches that will allow brokers to help more people with the right solutions (even by referral) and help their clients put their past credit problems behind them. Hopefully 2020 is the year the unfavorable mortgage market starts to grab the headlines for all the right reasons.