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While sentiment with credit assessors is at record-high levels, brokers are urging lenders to have better consistency in mortgage decisioning.
With the prudential regulator having recently upheld its rule for banks to hold serviceability buffers at 3 percentage points over the mortgage interest rate, many brokers have warned that borrowers are finding themselves left out in the cold when it comes to passing the buffer test.
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However, even with many lenders having introduced a 1 per cent buffer exception for certain borrowers – and while the current cash rate of 4.35 per cent is now widely expected to be the peak cash rate for the current cycle – brokers are calling on lenders to ensure that assessors are focusing on consistency across credit decisioning and adapt to market demands.
Speaking to The Adviser’s Elite Broker podcast, IFA Mortgages broker Luke Harborne explained: “[There has to be] consistency across lenders and their assessors … you want to be confident that you can submit a deal to a bank and you’re going to have a consistent decision and overall view of the deal applied by each assessor at the bank.”
Mr Harborne said that he had found that he may submit “two pretty similar types of deals” with the same lender, but the result may differ “depending on where that deal falls”.
“You could get a completely different set of responses,” Mr Harborne said, particularly noting that the issue could be exacerbated if one particular assessor is focusing on one particular aspect of an application or if the assessors are relatively new.
“I get it that it’s a really hard thing to standardise. And banks are obviously turning over credit assessors all the time, so people are coming on and getting trained and getting trained by different team leaders, who might focus on one thing compared to a different team leader … so, it’s really hard to get that consistency.
“But I think it’s so important that the lenders keep striving to focus on having consistency because, at the end of the day, we’re advising the client based on our knowledge and experience and what we think is going to be possible. If that doesn’t compute on the other side (because it falls on a desk of someone who just doesn’t understand or gets caught up on something in the deal that is just completely irrelevant/not even associated with credit ), you’re [getting] a lot of blow-ups in the office.”
Similarly, Joshua De Buelle, principal broker at FiNEXT told The Adviser that he was experiencing the same type of inconsistency from business development managers (BDMs).
He said: "Our team has different BDMs at the same bank due to location ie: North and South. Each broker will ring their respective BDM from the same bank and get a different answer to the same question."
According to Mr De Buelle, the brokerage recently "tested" the issue by calling two BDMs with a scenario and getting "two opposite answers".
"This is a frustration of ours; when different people at the bank tell you different information. BDMs are helpful at times, but having access to the bank’s credit team directly (which some of the majors do) is a far better way to shortcut to the answers you need," he added,
Founder of Borro, Cara Giovinazzo, also told The Adviser that understanding how different lenders assess borrowers was getting more difficult.
For instance, while some lenders like Macquarie may disregard private school fees given adequate evidence of savings, others consider these fees as ongoing liabilities, thereby reducing borrowing potential.
Others, such as Suncorp, disregards investment property expenses due to shaded rent, she said.
“We’re really becoming more creative and doing a lot more upfront work with clients to find them a solution that really does fit their needs,” Ms Giovinazzo said.
“It will continue to make broking a little bit harder.”
While consistency of decisioning has been a hot topic recently, broker sentiment with assessors has been increasing to record highs recently.
The Broker Pulse survey from Agile Market Intelligence for the month of November (conducted in December) saw credit assessors receive an index score of +54. This is the joint highest credit assessment satisfaction level received since the survey began in 2019.
Non-major lenders have been leading the way when it comes to credit assessor service – with the top five highest-rated lenders being non-major banks.
Adelaide Bank took the top spot with the highest credit assessment score – with 92 per cent of broker respondents citing a positive experience. Following closely behind was Bankwest at 91 per cent satisfaction. Macquarie Bank, Suncorp Bank, and ING also received high experience ratings.
ANZ received the lowest satisfaction rating of credit assessors among the most commonly used banks, with only 54 per cent of brokers saying they had a positive experience with them over the month of November.
You can find out more about what brokers think about credit assessors and lender consistency in the Elite Broker podcast.
Tune in to the episode with Luke Harborne, How this broker creates relationships that last, here or by tuning in below:
[Related: How supportive are lenders’ policies? Brokers reveal]
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