I’ve always felt that the relationship between mortgage brokers and mortgage lenders was particularly strong but yet, somewhat paradoxically, often rather brittle. Occasionally people pay lip-service to each other and, on occasion, each – sensing they hold the upper hand – push the boundaries of what might be acceptable. In a real sense the relationship is mutually fulfilling for the majority of the time however depending on their unique situations – pressure for both can come from compliance teams or to achieve sales expectations – each can appear to have a ‘thin skin’ and end up causing damage that often needs to be healed and repaired. This is definitely a marriage which can often require counseling.
I was reminded of this on reading a recent piece by Gemma Harle, managing director of TenetLime, which focused on lenders’ perceived greater focus on internal metrics. Her argument was that lenders are putting too much emphasis on these metrics to the potential detriment of the consumer. Examples such as conversion rates and the time brokers take to send in documentation were being overly relied upon to the point where brokers would begin to move away from these lenders to those who were not so hung up on these measures.
Gemma, I have to agree, has a point and this appears to me to be a prime example of a slight breakdown in the broker/lender relationship. Instead of both sides working together, the lenders in this case are spending too much time chivvying the network or club or broker along or, as Gemma puts it, wanting them to become ‘an extension of their in house processing teams’. This becomes an even bigger issue when we learn that some of the biggest lenders in the country are those that focus most intently on the fulfillment of these set metrics.
When looking at how we wanted to run Fleet Mortgages pre-launch, and the relationship that we wanted to establish with our distributor/broker partners, it seemed patently obvious to us that we had to have a large degree of flexibility. This was all about establishing a partnership approach rather than a ‘you’re lucky we allow you to access our products’ view. Plus I’ve often found that brokers who feel they are being treated somehow as ‘subordinates’ are not likely to be heading the queue when it comes to using your products and services.
For us, it’s all about mutual support; this is not a business where the side that appears to be continually flexing its muscle does the best. And I’m not just blaming lenders for this – I remember the pre-Credit Crunch approach that many distributors/packagers took with lenders. The ‘bully boy’ option seemed to be their modus operandi and, in my previous business, we were often ‘threatened’ by these businesses if we, for example, did not agree to a certain deal that at best pushed at the edges of criteria, or the marketing contribution they ‘needed’.
Therefore, with Fleet Mortgages, it was always our aim to work with those distributors who want a real, mutually-rewarding, long-lasting relationship. We want the relationship to be all about communication, listening and responding as we said we were going to. Our aim is to be flexible and agile and that means no overly bureaucratic system of reporting on the ‘stuff’ that doesn’t really help the customer (or the broker).
In a way we can probably differentiate those lenders adopting such a view – the specialist, dedicated intermediary-only lenders like ourselves – with those multi-channel, (direct to consumer) large lenders who, perhaps despite what they say, often seem ambivalent towards intermediary concerns, through no fault of the very talented people who work with intermediaries. Unfortunately for them the strategic decisions are not made by these people. I suspect, as Gemma points out, if this continues to be the latter group’s approach then they will find a far less receptive intermediary audience in the very near future. And this is definitely not a road lenders like ourselves will be pursuing.
Bob Young is chief executive officer of Fleet Mortgages