REVIEW
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Taking the stress out of product withdrawals Jonathan Stinton Head of intermediary relationships, Coventry for intermediaries
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ffected by volatility in the UK economy, the mortgage market has recently seen lenders pulling and modifying various products, often at short notice or even with no warning at all. This has put additional pressure on brokers who are already struggling for capacity – withdrawals require them to drop everything else in their busy schedules to respond quickly, and also leave their clients with a shorter window in which to make such a decision. So, what has caused this influx of withdrawals? And how can brokers and lenders work together to prepare for unexpected product changes, thereby making the application process smoother and less demanding? EXPLAINING THE SURGE
The UK economy is facing some challenging times as the cost-of-living crisis bites. Rising inflation has pushed the Bank of England to raise interest rates, and, as brokers will well know, this has seen lenders up the frequency of product changes and withdrawals. Today, lenders modify and reprice products more frequently. In fact, Moneyfacts found that the average shelf life of mortgage products plunged to a low of just 21 days in April 2022. In contrast, the average in April 2020 was more than double that, at 48 days. For brokers, that can cause a whole host of issues – a sudden product reprice or withdrawal can create havoc in the submission of applications, and can also cause www.mortgageintroducer.com
duplication of work, with brokers needing to re-source products on multiple occasions. How, then, can brokers and lenders work together to overcome the challenges these changes pose? TAKE ADVANTAGE OF SUPPORT
Brokers who are feeling stressed about product withdrawals should reach out to lender support teams as their first port of call. Although this may sound like sacrificing more time from their already strained schedules, which brokers are understandably reluctant to do given their high workloads, in reality it means saving time and work in the long run. With most lenders’ support teams having webchat functionality, brokers can receive support for case enquiries quickly and conveniently. Business development managers also offer support. While they might not know exactly when lenders are going to pull products from the market, they can provide added insight into the market landscape. With more lenders also offering telephone business development managers (TBDMs), it is now easier than ever for brokers to access BDMs with minimal inconvenience. BDMs are a trusted source of information, being experts on specific types of products as well as the wider market. It’s critical for brokers to stay up to date with market-wide trends and industry developments, but with a high number of applications to process, capacity can be limited. It’s therefore crucial that brokers maintain a good relationship with their BDMs, who will have all this vital intelligence at their fingertips, including how specific products are faring on the market. If, for example, brokers learn from BDMs that certain types of
products have recently been pulled from the market, they can deduce that similar products from other lenders might also be pulled and can prepare accordingly. Likewise, by speaking with a BDM about regulatory changes, brokers may also sense that certain products are unlikely to stay on the market for much longer or could be modified to adhere to changing regulations. With this knowledge, brokers can then focus their efforts on preparing and submitting applications before products are withdrawn. LENDER NOTICE PERIODS
It’s also a good idea for brokers to stay up to date on each lender’s notice periods and policies so that they can be as prepared as possible when a product change is announced. Some lenders have a standard notice period and policy by which they will abide, usually stated on their website. For example, at Coventry for intermediaries, we have been committed for over a decade to giving brokers at least two days’ notice via email before withdrawing a product from the market. This gives brokers the time they need to gather all relevant documents, speak to their clients, and submit full applications without the pressure to work out of hours. Alternatively, some lenders offer brokers a buffer period after a product is withdrawn, providing them with extra time to get their applications in. Whilst short-notice product withdrawals are far from ideal for either broker or lender, it’s important that both parties work together to ease the process while market uncertainty remains. Maintaining open communication and fostering strong relationships with BDMs, lenders, and their support teams can prove to be a huge advantage when it comes to product withdrawals, and by keeping track of lenders’ policies and notice periods, brokers will be in a better position to organise and prioritise applications, ultimately making the process more streamlined. M I JUNE 2022 MORTGAGE INTRODUCER
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