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Bank automates pre-approval process

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Charbel Kadib 8 minute read

A non-major lender has announced changes to its pre-approval process to address a spike in its turnaround times amid a 300 per cent surge in home lending volumes.

In a note to brokers, Teachers Mutual Bank Ltd (TMBL) has acknowledged a spike in its turnaround times for home loan applications, which have blown out to approximately 12 business days.

To address the lags, TMBL has introduced changes to its credit approval process. Effective from Monday (25 May), a “system-generated” credit decision will be provided for standalone applications from both owner-occupied and investment loans.

The lender stated that the decision would be based on ApplyOnline data supplied in the initial application submitted to the bank.

TMBL will only conduct a full assessment once a property has been purchased.

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The group has attributed the delays to sharp increase in daily mortgage applications, which have reportedly increased by over 300 per cent.

According to Mark Middleton, TMBL’s head of third-party distribution, interest in the First Home Loan Deposit Scheme (FHLDS), its low fixed-rate offerings, and changes to its broker commissions structure have been the main drivers of the uptick in volumes.

“In order to meet the demand, our dedicated staff are working outside of normal business hours, we are increasing resourcing and we are communicating with our broker partners directly to ensure submissions can be put through the process as swiftly as possible,” he told The Adviser.

Mr Middleton said the bank has no immediate plans to further revise its credit policy to address processing constraints but added that he expects volumes to moderate in response to exhaustion of the FHLDS.  

“[We] expect to see a slowdown in volume, which will allow us to start moving gradually towards our usual SLAs,” he said.

“At present, it is too early to say whether we will introduce any further changes. However, we will continue to monitor the situation and keep our brokers and members updated.”

TMBL’s latest changes come less than a week after ANZ acknowledged lags in its own approval process, with turnaround times more than doubling from “within a week” in March to between 15-18 days in May.  

ANZ also attributed the blow-out in turnaround times to the influx of applications, particularly from refinancers lured by the bank’s fixed-rate offerings.

The major bank has since hiked its two-year fixed home loan rate for owner-occupiers paying principal and interest by 10 basis points.

[Related: ANZ strained by mortgage inflows as turnaround times spike]

Bank automates pre-approval process
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Charbel Kadib

Charbel Kadib

Charbel Kadib is the news editor on The Adviser and Mortgage Business.

Before joining the team in 2017, Charbel completed internships with public relations agency Fifty Acres, and the Department of Communications and the Arts.

Email Charbel on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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