A broker has condemned the “smoke and mirrors” and delayed turnaround of online lending, saying that “nothing has improved” since its introduction in the early 2000s.
Katrina Rowlands, Mortgage Success principal, has said that the greatest challenge she faces in her day-to-day work is the turnaround times of 10 days for online lending.
Looking back at its introduction around 13 years ago, Ms Rowlands told The Adviser that the advent of online lending has improved “absolutely nothing”.
She explained: “The online lodgement, when it was very first sold to us, was to give us what was purported to be a four-hour turnaround. [Yet] here we are 12, 14 years later and our turnarounds are still 10 days.
“It’s incredibly frustrating to think that we're working to improve our efficiencies and our standards of service and yet those that we rely upon to help us fulfil those standards of service have somehow gotten worse and worse and worse and promises that were made have been lost somehow in transition.”
Ms Rowlands launched Mortgage Success 20 years ago and now has a staff of six in her Wollongong office. However, the broker remains perplexed that even with a larger staff, it still takes 10 days to get loans approved.
“Nothing has been improved, other than that the workload [has been] pushed back to us. But I still can’t quite understand how those efficiencies on the other side haven’t improved.”
Noting that “if it’s a 10-step process, brokers now do nine of them”, Ms Rowlands said that a four-hour turnaround would not be an ideal situation either. Clients would not be ready to sign a contract, valuations would not be performed and contracts would not be vetted within four hours, she explained.
“I remember a conversation that I had very early in the days [with] a very senior manager [who] said to me, 'We're going to be able to deliver a four-hour turnaround', and I said to him, 'Have you actually asked the brokers if they want a four-hour turnaround?'"
The principal asserted: “We don't need that [four-hour turnaround]. We need a consistent five-day unconditional approval. It would be really nice to have a consistent five-day turnaround.”
[Related: Regional banks update turnaround times]