Monday, August 2, 2021

Brokers use more specialist lenders for adverse credit cases


Specialist mortgage lenders received the highest percentage of positive feedback from brokers about their criteria and flexibility in H1 2021

Brokers used more specialist lenders for their adverse credit cases in H1 2021, giving them top scores for criteria, according to the latest research from Smart Money People.

Specialist mortgage lenders received the highest percentage of positive feedback from brokers about their criteria and flexibility in H1 2021. This follows a 12% rise in feedback for adverse lending cases for specialist lenders during H1, making up 40% of all specialist lender feedback.

82% of criteria feedback from brokers for the specialist sector was positive. When brokers talked about a specialist lender’s flexibility, 92% of the feedback was positive, the highest of any sector in the mortgage industry. ‘Ease’ themes increased in sentiment by 33% from H2 2020 for the specialist sector, up to 68% of feedback being considered positive.

However, the specialist sector received the highest percentage of negative feedback for speed in comparison to other sectors.

When brokers mentioned the time a lender took with the application, 72% of feedback for specialist lenders was negative, an increase of 11% compared to H2 2020.

Feedback about speed was also often mentioned in line with a frustrating underwriting experience, where brokers felt lenders took too long to review documents and asked for additional unnecessary documents.

Jacqueline Dewey, CEO of Smart Money People, commented: Circumstances over the last 18 months have meant specialist lenders have been in high demand especially for customers with adverse credit, and we imagine this trend for demand will continue following the pandemic. This high demand for the specialist lenders flexible criteria is likely to have caused the knock-on effect of their processing times slowing down as they struggle to cope with the demand.

Dewey said: However, as most of these lenders adopt manual underwriting, slightly slower turnaround times can be expected, but we may start to find more banks and building societies are willing to accept these types of clients, so specialist lenders need to work on their back-office processes to make them a competitive player to win business.


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