A non-major bank has found that 86 per cent of brokers are most concerned about turnarounds at the moment, with three-quarters believing they’ve worsened this year.
According to a survey conducted by MyState bank in early April 2021, 75 per cent of the 269 broker respondents said that they believed turnaround times had worsened since the end of 2020.
Half of the respondents to the MyState Quarterly Broker Survey said that they believed turnarounds had “worsened greatly” this year.
The survey results echo those collated by Momentum Intelligence’s Broker Pulse survey. According to brokers responding to the Broker Pulse survey, the average turnaround times in 2020 blow out to maximum of 9.8 days (recorded in August 2020), whereas turnaround have been at this level or higher for every month so far this year.
Given that there are record volumes of home loan applications and hot competition in the housing market, the speed in which a borrower can settle a loan is becoming increasingly important.
According to the MyState Quarterly Broker Survey, turnarounds was the biggest concern of 86 per cent of brokers, with 65 per cent suggesting that these concerns could be addressed with closer contact/work with relationship managers and lenders.
MyState Bank’s general manager banking, Tony MacRae, commented: “Brokers are focused on meeting the needs of their customers with competitive solutions in a timely manner. However, long delays in processing an application from other lenders is now negatively impacting customers and reflecting poorly on the brokers.
“We recognise the impact of delays on a broker’s reputation. More importantly, slower processing times can also result in potential settlement delays for customers and customers missing out on the purchase of their home,” he said.
According to MyState Bank, the bank has been “focused on helping brokers build their businesses with positive referrals”, including by providing its broker network with features such as “swift turnaround times, smart, fast tools and the ability for brokers to communicate directly with assessors to ensure best customer solutions”.
Mr MacRae suggested that the bank has been conditionally approving loans in two days, which he said had resulted in “strong demand” for the Tasmanian lender’s loans.
The findings come as turnaround times, particularly at the major banks, have blown out amid surging mortgage demand.
Earlier this month, the CEOs of the Commonwealth Bank of Australia (CBA), National Australia Bank (NAB), Westpac and ANZ told the House of Representatives’ standing committee on economics that turnaround times are currently within one or two days in the proprietary channel but, on average, between 10 and 12 days in the broker channel.
However, industry data shows that turnarounds are slower than those stated. Indeed, Momentum Intelligence’s Broker Pulse survey for March 2021 found that CBA’s average turnaround for broker-lodged loans was 12.7 days; NAB’s was 9.4 days; Westpac’s was 13.7 days; and ANZ’s was 16.4 days. (However, it should be noted that all four have seen their turnaround times improve over the last few months, following long delays in January 2021.)
The issue is not isolated to major banks, however, with some non-major banks also seeing their turnarounds blow out. Recent AFG data shows that the median turnaround time for lenders on its panel was 27.1 days for the quarter ending 31 March (a three-year high), for example.
As a whole, the turnaround time issue has impacted how brokers rate the lenders, with the March 2021 Broker Pulse survey recently revealing that satisfaction levels dropped to new lows in March 2021.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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