Login
ISCOVER
Banks have been urged to speed up their discharge times so clients are not "held to ransom" when they want to refinance.
Cathy Dimarchos, general manager of non-bank lender Sintex, said banks typically take four weeks to process discharges – but that new loans are settled much more quickly.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
"It's absolutely ludicrous for banks to take four weeks to prepare a discharge. This type of process does not keep the consumer in mind," she told The Adviser.
"I find it challenging to understand how the banks continue to use their muscle and service level agreements to hold up discharges."
Ms Dimarchos said banks should be getting unhappy customers off their books as quickly as they add new borrowers.
"Their eagerness to settle a new loan should be reflected in providing the same service levels to their existing customer seeking to discharge," she said.
"If a client is looking to refinance to either assist with a rearrangement in their finances or seeking to release security for any reason at all, they should not be held to ransom waiting four weeks to conduct their business."
Seven Point Finance owner Brett Amos said lengthy discharges are bad for brokers.
"It may harm the relationship between the client and the broker if the customer is charged penalties due to discharges not being completed in a timely fashion," he said.
"We're time-sensitive as far as settlements and payments are concerned, so the longer the settlement takes, the longer it takes before commission is paid."
Mr Amos told The Adviser that lenders should be able to process discharges in two weeks, yet typically take four.
"Obviously, the customer is moving away from the lender for a reason. I think it's unfair for the customer to be penalised again," he said.
"I think it's a bit short-sighted of lenders to drag the chain because they're virtually ruling out that the customer will return in the short term or medium term."
