Lenders’ support staff have been slogging through piles of mortgage applications in recent months after at least seven companies temporarily withdrew from the market just to catch up.
Mortgage providers have been facing “intense backlogs” following a rapidly changing interest rate environment over the past six months which has weighed on service levels.
Specialist lender Saffron Building Society is one such company which withdrew from accepting new mortgage applications - other than new-build - on August 4. It is yet to re-enter the market.
Tony Hall, the lender’s mortgage sales head, heads up Saffron’s support team. He told FTAdviser his team is currently working through more than double its usual pipeline.
We’ve drafted staff in from other areas of our business to help brokers.Tony Hall, Saffron“The hours our staff are doing is incredible. They’re working weekends and evenings to try and push cases through for brokers and their clients,” said Hall.
With a recent spike in Covid-19 cases, members of Hall’s team have come down with the virus and needed to take time out to recover.
“As an employer, we’re saying ‘please don’t overwork yourself’. This spike in Covid-19, as well as the huge increase in demand, has placed pressure on our service levels,” Hall explained.
“We’re asking brokers to be kind to our teams. The intensity and abuse from brokers is growing, and it’s upsetting. We’re not going to tolerate this anymore. We should all be in this together.
“One colleague said to me the other day in frustration: ‘We don’t have a draw of blow up underwriters’.”
This week, the lender emailed a plea to intermediaries in order to reduce the rising levels of abuse it says staff are facing.
“We’ve drafted staff in from other areas of our business to help brokers. They aren’t trained mortgage professionals. They’re following what they have been asked to do, but are getting battered by brokers.”
It all adds up to pain somewhere. If it was just us making mistakes, I’d understand.Tony Hall, SaffronOther delays throughout the home buying journey have placed a stress on lenders like Saffron’s service levels, such as valuers and conveyancers.
While rate changes are finally starting to slow now, when Saffron revamped its specialist range last month rates were still rising rapidly, leading it to become extremely busy.
“It all adds up to pain somewhere. If it was just us making mistakes, I’d understand,” said Hall.
“I regret our current service levels, they’re not where we’d like them to be. But we believe we can commit to them without causing detriment to our staff.”
The main two pain points for brokers are, according to Hall, when a broker has asked for their case to be escalated but there is no capacity for it to be escalated immediately, or where the lender changes its service level agreements mid-application process.
“I’m getting a lot of emails from those that shout and scream the loudest and threaten armageddon, and those that are patient,” said Hall. “Both ultimately get the same outcome.”
‘Brokers need to give us what we ask for’
The lender’s current service level agreements [SLAs] sit at 12 days for processing, and 24 days for an underwriting review.
“It’s a long period of time, but there’s no point in us lying. We’ve pushed it to the appropriate figure. That’s the worst case scenario and we’re doing all we can to get under that.”
If a broker sends in a fully packaged document on day one, Hall said the lender is far more likely to be able to cut this time down.
Whether you like what I’m asking for you to send me is irrelevant. We’ve asked for it and we need it.Tony Hall, SaffronThis is why Saffron has advised brokers to only submit mortgage applications when they have all the details. If details are missed out, this can hold up the lenders’ identity and verification processes.
The lender has put together a ‘right first time’ guide to help brokers, including a ‘what don’t you have and need to?’ section.
Recently, Saffron has faced increasing pushback from brokers when it comes to the questions it asks in relation to applications.
“Whether you [brokers] like what I’m asking for you to send me is irrelevant. We’ve asked for it and we need it. Don’t get wound up about it. Just because ten other lenders don’t do it, doesn’t mean we don’t have to,” Hall explained.
“Often brokers are coming to us with more specialist cases. Naturally, they take us longer and we need to ask more questions to get to a ‘yes’ answer on the mortgage.”
Saffron’s model is also about personal underwriting versus rates, meaning the underwriting is more manual and less automated to reduce the chances of a ‘computer sys no’ scenario.
Hall said he challenges his underwriting team on a daily basis at 9:30am, where his business development team goes through cases they have not been able to answer with the underwriters. “This isn’t seen, but it’s been happening for months.”
‘What we’ve got isn’t broken, it just needs improving’
Saffron is in the second year of its technology overhaul. Inevitably, Hall said, this programme has seen delays. The plan is to launch the new suite sometime next year.
“If it hadn’t been delayed, the benefits of the finished project would have helped us in all this,” he explained.
“But we can’t launch things before they are ready, as frustrating as that is. And the technology changes are separate from our current position.
“A lack of technology hasn’t created this demand. What we’ve got isn’t broken, it just needs improving. The problem is you can’t manage beyond full easily, like other lenders have found.”
In June, Saffron recorded a record number of phone calls, and this volume rose by 50 per cent again in July.
“We simply haven’t got extra resources to support these figures,” said Hall. “This is our position. We didn’t want to be in it and are doing everything we can not to be in it.”
Once current cases have washed through its systems, Saffron hopes to be back online.
“We want to avoid going straight back to the situation we were in before,” said Hall.
ruby.hinchliffe@ft.com
