By: Belinda Luc
Mortgage Choice chief executive officer Michael Russell has called on lenders to improve their online loan processing systems to reduce turnaround times.
Speaking at the Mortgage Innovation conference in Sydney yesterday, Mr Russell said as more loans are lodged through the online processing system, the time it takes to grant unconditional approval has stagnated instead of improving.
“We are getting 70 per cent of loans approved within a short period of time, but the delay between conditional and unconditional hasn’t improved... at all.”
Mr Russell said over the last five years the lending and broker industries have invested billions of dollars into developing their own systems to create online gateways and lodge loans electronically.
While these systems have resulted in 65 to 70 per cent of online applications being conditionally approved quickly and easily, he said the delay between conditional and unconditional approvals has stayed the same.
“I scratch my head because in 2001/2002 we were thinking that online lodgements would solve this problem but this hasn’t been the case,” Mr Russell said.
Government stimulus incentives created an influx of first home buyers last year, which pushed lender turnaround times to 15 or more days.
But despite the blow-out in turnaround times being widely publicised in the media, research by Retail Finance Intelligence found 80 per cent of borrowers considered times of less than 48 hours to be acceptable for approval.
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