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A mortgage broker has suggested that inconsistencies in credit application criteria between lenders and credit assessors could result in rework and delay the process.
According to a recent Broker Pulse survey from Momentum Intelligence, undertaken in partnership with The Adviser, brokers have reported that, on average, around a quarter of their interactions with credit assessors involve the assessor not applying the policy “consistently”.
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As such, brokers have been calling for credit assessors to apply lender policies consistently as broker satisfaction with lender assessors has continued to plunge to record lows.
While some lenders have reportedly suggested that rework from broker applications was a “very significant factor” in longer turnaround times, many brokers told The Adviser that the assertion of incomplete applications remained a “contentious” issue.
Speaking to The Adviser, Melbourne-based Accession Finance director and founder Tim Reynolds suggested that, for a loan application, a lender may require two payslips, contract of sale, and evidence of funds to complete.
However, a credit assessor may form their own criteria list, and a different view on the types of documents they would like to receive, depending on the particular client’s file, Mr Reynolds explained.
“I could give you a perfect file that fulfills all of the criteria that a lender has asked for, but that assessor on the day could turn around and say they want additional documentation such as a client’s group certificate,” he said.
“They could say that they’re well within their rights to ask the question about the group certificate, and they then throw it back to us for a rework asking for a group certificate now. It’s very tricky,” he said.
Mr Reynolds has also found that while some credit assessors would contact brokers in circumstances where a client’s loan application might require some rework, other lenders would close the file without contacting the broker.
“These lenders have already put the application back in the queue before the broker gets an email,” Mr Reynolds explained.
“They’ve not even bothered calling you to ask for clarification with regards to the application, which can sometimes be super simple.
“Now, even if we pick up the phone and speak to the assessor, it’s going to be another two or three days before they pick the file up again.”
In addition, Mr Reynolds has suggested that knowledge around lender policy varies between Australian-based credit assessors and overseas assessors.
The broker provided the example of speaking to a bank’s Australian-based assessor who “will work with you over the phone to get the deal done”.
“They’ll give you their phone number to actually call them back, and provide suitable suggestions around how to get the deal approved,” he said.
However, Mr Reynolds suggested that an overseas-based assessor might be more inclined to follow the flow chart when assessing applications.
“If it doesn’t fulfill the flow chart, they might ask for additional documents to abide by the policy,” Mr Reynolds said.
Many brokers took to The Adviser site to also lament that some assessors do not read the notes or supporting comments on a file.
“Just about every deal submitted I get an email or call asking for more information or clarification. I do feel disappointed while holding the assessors’ hand, directing them to the notes where the requested information had already been supplied at application,” one broker writing under the handle “GPS”, said.
Meanwhile, “JB” said: “Training people to make common sense decisions [is] not an easy task when they are constantly fearful of overstepping and file audits. Love an assessor who can discuss real issues in easy to understand English and make a common sense call.”
The issue of the length of time it takes to access finance has been a key point of focus recently, with the government proposing to repeal responsible lending laws to free up the flow of credit.
On Friday (19 February), the Senate economics legislation committee held a hearing on the proposed bill – the National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 – asking representatives from the banking, property, consumer advocacy, legal and indigenous assistance sectors their thoughts on the impacts of such a repeal.
A second hearing will take place on Friday (26 February).
The Senate committee is expected to report back on the impacts of the repeal by 12 March 2021.
[Related: Brokers call for credit assessor consistency]
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