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Smaller lenders and regional banks could regain broker business as some of the majors struggle to maintain servicing levels as a result of increased volumes.
Events of the last 12 months have seen a major swing in volumes towards the major banks.
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However in many cases the big banks have struggled to meet capacity, with ANZ identified by brokers as one of the slowest; loans now reportedly take up to 12 days to be approved.
A spokesperson for the bank acknowledged the situation; the lender told Mortgage Business it was “working hard to restore service levels in line with market expectations of ANZ; brokers should see improvement over coming weeks.”
Westpac said that its mortgage flows have increased over the last 12 months on the back of the lower interest rate environment and government initiatives aimed at first home buyers.
A spokesperson said that there had been a subsequent increase in applications but “the majority of these are still being processed within normal timeframes”.
Of the major lenders only Homeside, a division of NAB that only distributes via the third party channel, claims that its servicing levels were up on last year which it accredits to its switch to an online service.
Choice Aggregation Services CEO Brendan O’Donnell said that he was concerned over the impact slower service levels would have on brokers and their clients.
While he acknowledged that the major banks were working on their turnaround times he said “we would like to see more proactive support and communication from them around service levels”.
But it is a different story for some of the smaller lenders and regional banks.
Bendigo Bank told Mortgage Business that its servicing times have remained stable and are “about three days, plus whatever time it takes to get a valuation... this is consistent with our performance 12 months ago”.
With pressure on the major banks to meet broker demand plus a recent improvement in funding conditions, the market has again opened up for lenders outside the mainstream banks.
The recent rate cuts have opened up a spread of 26 basis points between the comparison rates offered by the major banks leaving a gap in the market for other lenders.
“Those smaller lenders still in operation are without doubt superior to the big four in service levels,” Mr O’Donnell said.
“Brokers need to uphold their own service levels with the client – and the client expects the broker to deliver on time.”
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