Bank exec urges competitors not to communicate directly with borrowers
Lenders who bypass brokers to communicate directly with borrowers – particularly to tell them that a mortgage offer has been made – risk damaging trust with intermediaries, a bank executive warns.
Concerns have been raised in the broker community that some lenders are telling their clients that an application has been accepted even before letting the broker know or allowing them to deliver the good news.
Darrell Walker (pictured), group sales director at Chetwood Bank, who has recently established new lender ModaMortgages, empathises with advisers. “It does steal the broker’s thunder,” said Walker. “I’m not sure what lenders are gaining by doing so. I can certainly understand why it might frustrate many people in the broker community. It clearly creates some unrest in the broker community that will likely turn into distrust. That’s not going to do lenders any favours. Our industry relies on a lot of repeated business from the broker community – cutting them out puts this at risk. The relationship can be a little fractured at times.”
Broker Gaurav Shukla, managing director of Home Me Mortgages, recently told Mortgage Introducer that he did not want lenders to be communicating directly with a client over his head. “There are a few lenders out there who will contact the customer directly when we're doing applications,” Shukla said. “We're dealing with the client, not the lender. But they send the customer a text or an email to say their mortgage offer has been issued. That's for us, specifically, to tell the customer that we've got them the mortgage offer, as we've done the work for it. We then ask them for a review at that point. The lender takes that away from us because they've already received the good news. I think allowing the broker to have the full communication with the client is what's needed.”
Underplaying the role of the broker is not in anyone’s interest, Walker believes, and will impact borrowers, reducing the options they have available to them, particularly from those who only offer certain products via intermediaries. “Something needs to change,” he reasoned. “By cutting brokers out of the equation, lenders risk transforming what should be a collaborative process into a competitive one, and that just results in worse outcomes for borrowers.”
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How should lenders behave towards borrowers and brokers?
Lenders should have well-established processes for communicating with brokers and, as necessary, with the end client, Walker urges. “Brokers, being experienced and well-versed in the mortgage sector, typically favour honest, clear and direct communications so they reach a decision quickly and report back to their clients,” he said. “Communication to the borrower, meanwhile, might need extra detail and clarifications. Lenders should provide clear criteria upfront, to improve transparency, and ensure they have a dedicated broker support team. These factors should be deployed alongside some automated processes, which help brokers get a better sense of their clients’ options. This helps brokers work through any difficulties they might be facing at speed and ensures they can keep their clients updated on their progress as well.”
ModaMortgages has an online application processes, and brokers can also talk to its team via web chat or the phone, which Walker considers should be the industry standard. “We saw a clear issue with brokers becoming frustrated by the quality of service and support they were getting from lenders,” he explained. “Clearly, brokers are absolutely essential in the mortgage market, and even more so in specialist lending. By working with a third party, borrowers have access to an impartial individual who has their best interests in mind.”
Walker acknowledges that what lenders do is very different to what a broker does. “It’s really important we recognise our roles and responsibilities,” he said. “As a broker-only lender, we understand that we have to make their lives as easy as possible, and in turn they can deliver an excellent service and experience to their own clients, the borrowers. It sounds simple enough, but sometimes I think we have to re-establish the importance of that relationship and consider how to best work together.”
Walker hopes that those lenders who bypass brokers can now recommit to maintaining trust, transparency and good communication in the sector. “It’s only then that borrowers can be properly supported as they navigate today’s complex investment landscape,” he said. “If we can work together, brokers and lenders can ensure that the market remains resilient in the face of some challenging macroeconomic conditions – that can only be a good thing.”
