Mortgages

Mortgage brokers call for more notice of product with…


Mortgage brokers call for more notice of product withdrawals

Mortgage brokers have expressed concern about products being removed with little or no notice.


Hundreds of mortgages have been withdrawn from the market or repriced in recent weeks.


It comes as lenders respond to rising swap rates amid concern about higher than expected inflation and the prospect of more interest rate rises from the Bank of England.



But this is hitting borrowers, making it hard to secure a mortgage or decision in principle when rates are changing so rapidly.


Robert Sinclair, chief executive at the Association of Mortgage Intermediaries (AMI), said: “AMI acknowledges the volatile market conditions and the need for lenders to protect their pipelines, margins and profitability.  However, sudden product withdrawals could be seen to be indicative of insufficient pipeline monitoring.


“We recognise that a mandatory minimum notice period might be difficult for many, but we ask lenders to think about their broker partners and their current and potential customers by giving as much notice as possible.”

Sinclair said it would be preferable if withdrawal periods could be measured in hours and not minutes, with thought given to when cut-offs are announced, not at weekends or late in the day.


He added: “It would be helpful if lenders could commit to try to give 24 hours’ notice, with both announcement and deadline falling between 9-5 Monday to Friday. That would be of great benefit to all.


“We will continue to work with IMLA to see if we can establish some industry guidelines and best practice that all firms can support.”


Kate Davies, executive director at the Intermediary Mortgage Lenders Association (IMLA), added: “There is currently much comment in the press about the number of mortgage products being withdrawn from the market, often at very short notice. 


“This is frustrating for brokers, customers and lenders, but decisions to withdraw products and re-price are taken only when absolutely necessary.  The root cause is the current volatility in the swaps market, combined with the continuing speculation about further rises in Bank of England base rate. 


“In practice, we do not think there could ever be a ‘one size fits all’ approach to giving notice of the withdrawal of a particular product.  This is due to different lender funding strategies, which will drive the need for some lenders to move very quickly in order to remain prudent and profitable when there are large and sudden increases to funding costs.


“IMLA members do take this issue very seriously and will continue to do their best to give brokers as much notice as is reasonably possible when a product is about to be withdrawn.  We all look forward to a less bumpy outlook when interest rates and markets settle down.”







Source link

Leave a Response