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Application rework claims ‘contentious’, says broker

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Application rework claims ‘contentious’, says broker

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”.

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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Malavika Santhebennur

AUTHOR

Malavika Santhebennur is a content specialist at Momentum Media, focusing on mortgages and finance writing.

Before joining Momentum Media in 2019, Malavika held roles with Money Management and Benchmark Media, where she was writing about financial services.

Comments (9)

  • Some queries from an assessor today:

    Q: Is the "Rail Ticket" dedcution on payslip ongoing?
    A: The deduction is in the YTD colum. It's not an active deduction. Client cancelled the annual rail ticket subscription due to COVID lockdowns. As already declared she's working from home. It's obviously not ongoing.

    Q: Customer Objectives form is not the current version.
    A: Current version downloaded from lender website is now attached. Form previously provided was generated by ApplyOnline the day prior to submission.

    Q: There's a shortfall of funds to complete.
    A: Client is a first home buyer. Whilst she won't get the FHOG, she will not have to pay stamp duty. My (attached) funding worksheet shows a healthy surplus.

    Almost every file I submit generates queries like this.
    0
  • Sad to see so many naïve brokers! You should all know that this is a lender strategy of delaying brokers files to give the customer the perception that they will get better (quicker) service by going direct - online or in branch. I'm not sorry to say that as long as all you fools keep using these lenders (you know who they are) it will keep happening. So stop whining and something about it
    2
  • I would suggest that most problems we experience in this area relate to the interface between AOL and the Banks.

    I very, very rarely have a file pass straight through, despite uploading ALL required docs to AOL. The doc upload from AOL to the lenders seems dubious at best and a complete flop at worst.

    So until the lenders force AOL to lift their game substantially, nothings going to change.

    and I would hazard a guess that AOL management consistently tell Bank management that brokers are not loading docs, and thus the cycle continues.

    I now report any issues I have with disappearing docs to my Aggregator, they can start to demand more from AOL and if becomes a widely known problem, then maybe we can get the Banks to push back on AOL.

    Then, and only then may we eliminate this constant conflict.
    2
  • Very True all of the points are relevant, also lenders who change their requirements but not their core submission checklist. U want us to complete and check off the submission list - but don't have everything on there.
    1
  • If lenders want to improve the quality of broker submissions, perhaps they should provide that assessment flow chart to brokers.
    We provide every document required by the AOL checklist and often additional documents we think will be required. I frequently get told that we have a high application quality. Despite this a 'straight through' application is almost a unicorn in my office.
    2
    • Agree 100% that "straight through" is a relic of the past as the smarter AOL becomes , the dumber the actual loan approval process is.
      2
  • I find that most these reworks are usually due to their own document checklists nor being up to date, or more likely due to an assessor coming back and asking something usually totally irrelevant, as an example BOM wanting to know existing outgoing rental being paid income for owner occupied purchases, why is this stupid question even necessary, and this creates a rework at BOM for every O/OC purchase, despite AOL not requiring this irrelevant statistic, include it manually in your notes the assessors say , yeah, sure thing mate I'd remember to do that, I mean why wouldn't I ?

    1) Lenders need to get their own house in order and stop blaming Brokers for their own shortcomings as the standard of what is being loaded as never been higher.

    2 ) Stop playing pass the parcel with the files , particularly the complex ones.

    3) Pick up the damn phone and most can be resolved on the spot, but no, they seem to actually enjoy throwing files back in the queue, so back to day one you go pesky brokers, whilst they image the docs over the next day or two that we sent through to them immediately.
    2
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