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‘Crazy’ turnaround times a big issue for brokers

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James Mitchell 3 minute read

Brokers are becoming increasingly frustrated as bank turnaround times continue to blow out by up to three weeks.

The Adviser spoke to a handful of mortgage brokers, who wish to remain anonymous, about how the blowouts are impacting their ability to secure a deal for their clients.

One leading Sydney broker said the “crazy turnaround times” for getting deals approved has led them to become accredited with smaller lenders and mutual banks.

“My biggest issue at the moment is turnaround times,” the broker said. “At the moment with so many of the first and second-tier lenders having crazy turnaround times, this is a massive opportunity for the mutuals in particular to grab some market share.”

However, another broker said that mutuals are also struggling to pick up applications. One mutual bank in particular blew out to 18 working days, they said, “which basically eliminates anyone looking to buy a property and makes it for refi only.”

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Brokers generally agree that the problem has become worse over the last 6 to 12 months. Lenders that announce special rates tend to blow out quickly, they say, particularly if they are updating their software and back-end systems at the same time.

But one Melbourne-based loan writer sees the issue as an industry-wide epidemic that correlates to the huge growth in broker market share over the last few years.

“I’ve pretty much given up on trying to push any loans through quickly. I’m now basically just trying to manage expectations,” they said.

“The nature of staff turnover at all lenders is getting worse. A lot of the lenders are saying the reason why turnaround times are blowing up is because they are working to educate brokers. I’m not so sure.

“It may be because the broker market is bigger. It’s 30 per cent bigger than it was when I started in the industry and I’m not sure that bank resources have gone up by 30 per cent over that time.”

Earlier this year, industry veteran and MoneyQuest CEO Michael Russell said the “data and digital revolution” has failed to improve the customer experience in the third-party channel.

The former Mortgage Choice boss made the comments during a roundtable discussion for the Deloitte Australian Mortgage Report 2016.

“We’ve been hearing about the data and digital revolution for 15 years in the mortgage industry but in terms of delivering new innovative products, we haven’t seen much,” Mr Russell said.

“In terms of customer experience in the third party, turnaround times from submission to unconditional approval remain largely unchanged,” he said.

“Brokers have certainly done their bit, investing heavily in online submission capability, process efficiencies and post-settlement customer contact optimisation. But alas, we still only achieve less than 40 per cent system-generated submission to conditional approval.”

In May, ANZ chief executive Shayne Elliott told The Adviser that the bank understood the importance of turnaround times for brokers.

“Brokers really want a bank that can respond quickly. They want to help their customer get into their house,” Mr Elliott said. “So they need a response quickly and one they can rely on. We have worked really hard at speed and turnaround. We are a very competitive bank from a broker point of view.”

[Related: Broker to speed up turnaround times with new app]

 

‘Crazy’ turnaround times a big issue for brokers
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James Mitchell

James Mitchell

James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.

He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.

He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.

James holds a BA (Hons) in English Literature and an MA in Journalism.

 

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