Specialist lender Precise has come under fire from brokers who claim buy-to-let (BTL) underwriting delays are costing them clients and leaving them out of pocket.
The lender has been criticised for reaching a decision in principle (DIP) and requesting further information that then leads to the rejection of the case – even though this should have been apparent at the time of the DIP.
It has also been alleged that Precise takes five days or more to look at extra information submitted to support cases, meaning turnaround times are increased significantly.
But Precise defended its record and said that while there had been some small delays during the summer months, it was only slightly behind target.
I want brokers to be happy with our service 100 per cent of the time, but, in reality, that is a utopia I will probably never achieve.Alan ClearyTony Silver, director at London-based White House Mortgages, told FTAdviser he was around £670 down on fees he could have charged as a result of the delays.
He said: “There is a serious problem with Precise. They take five working days to issue a piece of paper.
“What a broker requires is a decision in principle that he can rely on. A DIP pass has to be a pass and a rejection has to be a rejection – but it has to be able to be challenged.”
Mr Silver said the problems had arisen because Precise’s five-year buy-to-let fixed rate deals are stress tested at the pay rate instead of 5.5 per cent, which means they are one of the few products that meet the needs of the London market.
He added that, as a result, they cannot cope with the extra business currently coming their way, and some of their underwriting staff do not have enough experience to handle cases properly.
He said: “They are taking on more business than they can cope with. They are a victim of their own success.”
Mossy Sowlat, director at London-based AA Mortgage Gateway, has also been experiencing delays with the lender.
He said: “It is roughly five to seven working days for a piece of information you send, and I was told yesterday it was four working days for them to look at any application submitted, and another four or five every time you send information.
“There has been a time that I had to phone up and say ‘has anyone looked at this case?’ and I then get a reply or a decision. Generally, they say they are very busy and the turnaround time is four days.”
Alan Cleary, managing director at Precise, said: “On our website we update service turnaround times each day. At present, we are processing applications within four days and getting to post in four days, so your broker’s comment about five days is pretty consistent with that.
“Ideally, we aim for a three-day turnaround, so we are a bit outside of that. The summer break does tend to cause a bit of disruption due to staff holidays and of course valuers and conveyancers tend to be a bit slower as well.
“We are a specialist lender dealing with cases that high street lenders do not, usually because they are more complex so a few days extra on turnaround times is to be expected.”
He added that underwriters have to verify information after the DIP, and this can lead to delays, particularly if documents are submitted ‘piecemeal’.
Mr Cleary said: “One of my peer group lenders was 20 days behind earlier in the year and I know quite a few of my peer group are seven to 10 days’ turnaround times, so while I am always striving to get the turnaround times better, I do not believe we are an outlier.
“We will never stop trying to improve our service to brokers and our customers, and I want brokers to be happy with our service 100 per cent of the time, but, in reality, that is a utopia I will probably never achieve.”
Liz Syms, chief executive at London-based Connect Mortgages, said: “We are experiencing delays with Precise, but as we package for them we do have some senior relationships we can call in for help.
“Other brokers may find improvements to the speed by using a packager who is experienced with the lender like us so that when the paperwork is put together correctly when submitted, it minimises delays from lender queries.
“I would also like to mention that Precise are not the only lenders with delays, nor are they the only lender who have competitive rental calculations.
"The broker could look to other lenders like Axis, Vida, Fleet and Kent Reliance who also have good rental calculation options.”
simon.allin@ft.com
