Turnaround times worsen

I think this is a little bizarre to see banks quote “record volumes” as the cause of the current poor turnaround times, if you ask any real estate agent, the number of actual house sales has dropped away dramatically compared to say 5 years ago but the actual prices have gone sky high, poor turnaround times by the banks can’t be attributed to high sales volumes because the sales are just not there, so what causing the slowdown in service ?.
Are banks currently also experiencing their own regulatory requirements via the FMA and need to “slow things down” or are they understaffed to maximize that yearly profit, or is the third-party banking quality of application submissions still poor?
There are some very professional advisers out there who summit fantastic applications and have draw down ratios of 75% to 100%, Yes that’s right 100%, so advisers should not even be contemplating submitting a deal without thinking to one’s self ,””I know 99% this is going to get approved first time “’.
Downside for the good brokers is that no matter how good your quality of submission is your still stuck in the Que behind all the rubbish and multi submitted applications that are just going nowhere.
Technology ?
BNZ made it compulsory for all NZFSG brokers to submit deals via their loan market owned CRM system which was supposed to speed up the assessment process but by the looks of the current BNZ turnaround times starching out to 8 to 12 working days this obviously does not work, plus with BNZ continuously talking about poor quality of application submissions this submission via CRM is just a waste of time and could actually be breaching the privacy act by loading personal banking data up on a cloud based system without permission from the customer ( which is an FMA requirement ) .
What if the banks developed their own Portals where applications are submitted direct to the banks on writable PDFs that can be “data scraped” which in turn loads the information fast into the bank systems, no silly CRM systems in the middle.
That would mean the banks would have to spend a little or invest in the current adviser part of their business that draws in 40% of loan settlements currently and climbing, could be a good investment ?

Maybe Banks could have a 3 tier quality rating for advisers based on draw down ratios say 70% to 100%, 40% to 70% and 0% to 40% with better turnaround times offer accordingly, (just an idea) .

Poor turnaround times at banks have traditionally been caused by a busy market, lack of resourcing at the various broker units and certain brokers in the industry who continually multi submit deals to several banks at once. Granted that in the current climate of ever-increasing assessment check lists by banks brokers need sometimes to have two or three options up their sleeve, however banks need to start prioritising assessment of applications from brokers that have not been multi submitted.

The biggest issue I hear from bank staff regarding turnaround times is broker applications submitted with incomplete information attached i.e. evidence income or insufficient bank statements. This slows up bank assessment times continuously and impacts upon other brokers and their well packaged deals. Unrealistic expectations around turnaround times are also an issue for the mortgage broking industry to address. Brokers themselves need to educate their customers much better explaining that customers need to have their finance pre-approved prior to them wanting to make offers on properties. A customer contacting you on Monday who doesn’t have their finance pre-approved already is unlikely to be able to secure finance in time for the auction they want to bid at that Thursday. Expecting banks to drop everything for your customer’s super urgent application is becoming unrealistic. Gone are the days of mortgage brokers simply telling customers to just make a cash offer without first checking that they can secure them finance. Brokers that are still doing this won’t be around in this industry much longer. We are moving into a licensed industry now and the advice process starts at the very first conversation we have with our customers.

The key solution though to poor bank turnaround times is for the lenders themselves to invest in technology. The banks need to build online portals for mortgage brokers to log into to submit customer loan applications to banks directly. These systems can be built in such a way that a broker must attach and supply the correct information each time for the lender to assess the deal. This will in some cases then enable a loan application to be approved by the lender on the spot or with a significantly reduced approval time to that currently possible. We’re talking about a direct “broker to bank portal” like what Partners Life have done with their MUM online application software enabling insurance advisers to secure underwriting decisions for their customers in many cases instantly. This is the ultimate future for all mortgage brokers when submitting lending application on behalf of customers to banks. A broker to bank portal independent of any third parties such as dealer groups.

Really :-) slow turn around, or brokers on holiday as well? The last loan application processed with Squirrel to ANZ started in Oct 2019 and finalised in a drawdown Feb 2020. LVR was 30% and servicability high. No risk. It was clearly delayed at the time in the hope by the bank that rates would rise in the interim. It was that or incompetent bank back office staff who kept raising requests for single pieces of information over time to validate insurances or whatever else they could think up for a borrowing level that was under $300k.