MortgagesMay 22 2015

Concern raised about lack of mortgage transparency

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Concern raised about lack of mortgage transparency

There is still not enough transparency in the mortgage application process, the managing director of EDM Mortgage Support Services has said.

Joe Pepper said the lack was especially apparent in the audit chain across the complete application process, and presented a risk to the mortgage market.

He said: “It is a year since the introduction of the mortgage market review which was designed to ensure that borrowers could afford the mortgages offered to them by lenders and that products suited their needs and circumstances.

“Without transparency in the application process, it’s difficult to see how lenders can prove that they have undertaken all the necessary stages to ensure that due process has been followed.”

He warned that the opportunity for fraud was also wide open if lenders and brokers were unable to carry out necessary checks and balances throughout the application process.

“From a regulatory as well as a customer experience point of view it is vital to get the right platforms and processes in place”, he said.

EDM Mortgage Support Services provides information and business process management technology and services to the UK mortgage market.

Mr Pepper said research conducted by his firm found almost 20 per cent of UK mortgage professionals believed that information exchange in their industry was either poor or very poor.

Meanwhile, transparency of the audit chain was viewed as ‘poor’ or ‘very poor’ by almost 25 per cent of mortgage professionals.

Sue Anderson, a spokeswoman for the Council of Mortgage Lenders said lenders had not raised specific problems about undertaking the necessary checks.

She said: “If anything, there are now more sophisticated systems to spot fraud available as technology has evolved to assist in this area.”

In its business plan for 2015/16 the FCA has said it plans to do a post-MMR market study looking into responsible lending which will start during the second quarter of 2015.

However, a spokesman for the FCA declined to comment on this particular issue.

Adviser view

Kevin Dunn, a mortgage adviser with Leicester-based Furnley House, said: “It would be nice if lenders all used the same playing field but that’s what the broker is there for.

“If it was dead easy and all lenders were the same then people would be able to do it themselves. But it is more and more the case that it is not straightforward.”