Online Mortgage Systems

Online systems - are they Packager friendly?

As Packagers account for a large part of most non-conforming lenders distribution, you would think there would be a pressing need for lenders to integrate their online systems with those of their packaging partners, whether through front office point of sales systems or back office processing.

You would also think that any development of these systems would take into account packagers thoughts and ideas, as many of them are at the forefront of non conforming distribution and have been for many years. However, news reaches us here at 3G that one or two lenders have developed their online offering specifically, NOT to be packager friendly. The upshot of this is very simple

To drive business through their direct broker arm and cut out the packager.

This disturbs us. We have said elsewhere on our site that we do not have any issues with lenders developing a clear, transparent broker offering but to be anything but upfront about their intentions shows a blatant disregard for their loyal packaging partners and the role they have played in developing and building lenders distribution. The useability and stability of some of these online systems leaves a lot to be desired and it makes us wonder if they were ever tested to any great degree?

Lenders have predicted the demise of the Packager for a number of years now and it hasn't happened. The use of technology in the mortgage industry is becoming increasingly important and Packagers are at the forefront of this.

Online systems and the Packager Let us make a bold statement here. In 2007, Packagers will be the preferred distribution route of the vast majority of UK mortgage brokers, including Network ARs. Why? It's simple. Here is an example:

Two potential routes of submisson from Mr Broker in Mortgageshire.

Option 1 Mr Broker sends his online DiP to ABC lender. That lender does its Online magic and comes back, unfortunately, with a decline. So, Mr Broker completes another Online DiP with XYZ lender and unfortunately again, this lender declines his case. So, eventually after trying a 3rd lender, Mr Broker is able to place his case. The fact that this has taken him the best part of half a day because each lender has different DiP criteria is just the way it is. Or is it?

Option 2 Mr Broker sends his Online DiP to Packaging Home Loans. The Packagers new fully integrated Online system comes back with 2 declines but also an acceptance (fully credit searched, mortgage referenced, etc) from one of the lenders on its 8 strong, lender panel. This has taken just 15 minutes as there is just one set of information to imput into the Online DiP.

So, the choice is the brokers. Choose 1 lender each time, using different Online systems with different information or 1 Packager with one online system and one set of information but from a choice of lenders?

I think we all know the answer. So the message to our lending partners is: Don't write us off just yet, with new entrants in the mortgage market and challenging business volume targets, you could end up needing Packagers much more than you originally thought.

By Paula Harrison

Paula Harrison is the Managing Director of Capital Mortgage Solutions, a specialist mortgage broker catering for individuals who cannot prove their income or have suffered from adverse credit problems in the past. With years of experience in the sub prime mortgage market, Paula fully understands the problems her clients face. Visit her at CCJ Mortgages and Mortgage Packagers