Since the implementation of the Mortgage Credit Directive (MCD), the second charge mortgage industry has seen a flood of new sourcing systems enter the market. Last week Shawbrook, Precise Mortgages and Together all integrated with LenderGateway, while over 1,000 brokers have already used Mortgage Brain’s new second charge system, LoansBrain.
Nicola Mooney, Head of Secured, Intermediary and Business Finance at Freedom for Intermediaries, felt that sourcing systems were a very important part of the loan process, but warned of the dangers of becoming over reliant. “It is vital that the industry does not become reliant on computers alone to decide who should be acceptable for a loan. “The human touch that intermediaries provide, paired with technology, can be the difference between a loan agreement or rejection for many potential borrowers.
“Many of the sourcing tools currently on the market, which process countless applications a day, may miss vital information, for example affordability calculations, and therefore risk rejecting responsible borrowers.”
However, Tony Marshall, Managing Director at Equifinance, said there was no doubt that sourcing systems had come a long way in recent years and felt MCD had been the catalyst for technology in the second charge market. “This is good for the sector generally as a tremendous amount of R&D has gone into making it faster and easier for brokers to find lenders’ products that match their client needs. “But we must never forget there are sometimes ways for a lender to offer a product that aren’t always covered by a system. “For example, irregular client income and various forms of historical debt are best considered by an expert underwriter and decisions made on an individual case basis. “Getting these two aspects of the application process to work together is the key.”
Meanwhile, Paul Day of Clever Lending added that a sourcing system should be: “User friendly, simple navigation enabling both the adviser and client to quickly compare products and product types deemed suitable for their situations. “The key word here is “compare” as a sourcing system can only guide to a certain extent and this is where the adviser steps in with their intimate knowledge of processing and lending criteria. “Some lenders will flex the criteria or have a broad band of acceptability of specific criteria which cannot be picked up all the time by sourcing.” Rob Derry, Managing Director of Brunel Mortgages & Loans, said every broker had their own favourite system, but felt the sourcing system was only the first step. “In the specialist market and second mortgage space, there is flexibility in criteria that master brokers can refer to the lender on. “It would be tough for a sourcing system to know where all of that flexibility is for all of the lenders.
“The sourcing system is the first step, then all the detail needs unpicking – that’s where the master broker earns their crust. Paul concluded by adding: “A good sourcing system should be an extension of the service a business provides, it should work alongside the advisers and underwriters. “Actually speaking to someone and making the most of their product knowledge and experience is not something that necessarily can be, or should be, replaced by a sourcing system.”