Are brokers to blame for slow turnaround times?

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New CMP research identifying turnaround times as brokers’ biggest gripe has lenders suggesting blame may ultimately rest with those same finger-pointing originators.

“If brokers would actually put notes in their apps that make sense,” writes on frustrated professional at a broker channel lender. “And stop sending deals to three or four lenders at the same time, it would likely improve service levels.”

He or she (the comment was posted to MortgageBrokerNews.ca anonymously) is by no means alone, with other “bankers” offering the same sort of defense against broker criticism that slow turnaround times are stifling growth.

On the contrary, say lenders, some brokers are guilty of throwing up their own obstacles to winning quick commitments for their clients.

“Brokers’ notes in the application improve the turnaround time,” writes another commenter, Kuldip Panesar. “Originators after processing the app should stick to the one lender.”

The inference is that brokers aren’t providing the kind of file details lenders increasingly need to satisfy underwriting guidelines. There’s also concern that brokers simply aren’t spending the requisite time because they’re sending out one-size-fits-all applications to multiple lenders in an effort to hedge their bets.

That may actually be working against them.

Still, this year’s CMP Brokers on Lenders survey points to growing broker dissatisfaction with lender turnaround times as a whole, although individual players are actually garnering more praise that in past years.

A new MortgageBrokerNews.ca poll is also adding weight to broker concerns.

Some 32 per cent of mortgage professionals responding to the online research question in September identified turnaround times as the “single-most important lender feature.” Underwriting support and interest rates came a distant second and third, capturing 25 per cent and 10 per cent of the vote, respectively. 
  • Mark Brennan on 2014-10-17 12:38:09 PM

    100% agree. Learn your lender's guidelines, or ask your BDM before you throw it against their wall to see if it will stick. Then package your deal with concise notes for the underwriter!

  • Adrian on 2014-10-17 3:00:18 PM

    Agreed, sort of...Know your lenders and their appetites first and foremost. I collect and provide as much supporting docs up front as possible and give detailed notes. Very few issues with turn around times. As for multiple lenders.... That's just the game and why we have a 4 hour lock out.

  • Z.M.Padar on 2014-10-17 3:00:34 PM

    Just a suggestion: when deal is send to lender, should be complete and not bits an pieces. Explanation of situation and circumstances must be understood by underwriter ant their team, to enable them to provide quick approval and ultimately quick final approval, removal of all conditions. Upon a broker has done this work, collect all information and documentation upfront from client, the underwriting team will and do provide timely respond and funding will be fast and without problems. Way too many unprofessional people in the industry in my opinion, lack of experience and or willingness to learn.

  • Broker on 2014-10-17 3:01:28 PM

    This whole article spawned from "banker" writing a comment on the previous article discussing turnaround times. The real issue is understaffing, go ask TD how many deals they funded this year compared to last year and you will find where the problem lies, they are insanely busy. A 'note' is not going to solve the issue for them.

  • Z.M.Padar on 2014-10-17 3:05:35 PM

    That also an issue as I have been tossed around by underwriters, too busy, to get a deal approved, as my underwriter was too busy or on holiday... however it is our common goal to find solutions and work side by side for our client relying on our services!

  • Terri on 2014-10-17 3:24:19 PM

    I have had experienced both sides as an underwriter and a mortgage broker - and I 100% agree with the writer. As an underwriter, I gave preferential treatment to brokers who provided detailed comments and paperwork up-front, eliminating a lot of guesswork and emails back and forth, and as a broker, I usually get quick turnarounds from my go-to lenders.

  • Adrian on 2014-10-17 3:29:52 PM

    "Broker" has a valid point. There are certainly issues with volumes backing up the system. This is witnessed by the emails we periodically get from BDMs warning of delayed turn around due to volumes.. However, if you make a habit of making the job easier for the underwriter by submitting and well packaged file, you will find your deal goes to the top of the pile and turned more efficiently. It's one of the things that will make you more internally competitive and as such a better service provider. That's my experience anyway.

  • Brian on 2014-10-17 5:57:42 PM

    Not only are they understaffed, I think often they don't even read the submission notes. Often the questions coming back were already covered in the notes. Also, you get an approval one day the next day the Approving Underwriter goes on vacation. Then there's the nit pickers.. I had one the client's name was Ted... his birth name was Edward this underwiter was holding up the deal until his employer changed his Job Letter and Paystub from Ted to Edward!!!

  • Peter on 2014-10-17 6:18:04 PM

    There are great underwriters and brokers. There are marginal underwriters and brokers.

    I think it is important in your notes to only put the mitigating factors not the basics of the application, remember the 5 Cs of credit and ask for your exceptions upfront.

    Make a good package of docs. Make notes to help the underwriter and or credit assistant.

    In response to "banker". I had a TD credit assistant not know what an NOA was.... my deal took 7 days for a commitment and another 8 for docs. So while I understand some brokers may be slowing up the system.... there is definitely a problem on the other end.



  • kevin from kelowna on 2014-10-17 6:20:51 PM

    I think part of the problem is the lack of training some brokers have. The course in BC teaches you virtually nothing about the real job or anything about how our systems work or how to submit a deal to the lender. On top of that every two years we are now forced to take these very simple but expensive courses which once again are of very little value to any experienced broker and provide very little real hands on job experience to a newer broker. Our governing bodies need to stop using this as a fund raiser and actually teach valuable lesson so we are not stuck with all these brokers learning on the job....it's very sad and the volume of crappy apps kills good deals and clogs the system

  • kevin from kelowna on 2014-10-17 6:23:40 PM

    and please don't mention TD as their own staff doesn't even know their own products...I'm tired of telling them their own policies and what they can do as they just don't know their own products. It's brutal and they know it

  • Dave on 2014-10-18 10:13:59 AM

    TD is behind 800 deals on any given week. Just call the BDM and ask. Their management is a joke and their staff are poorly trained and work for peanuts. I never send my business to a bank anyways so don't really care how they operate, just find it funny brokers still deal with banks .

  • Deborah on 2014-10-19 2:28:02 PM

    Both Peter and Brian make excellent points. yes there are good and bad on both sides. Some times I wonder did the underwriter even read my notes? I have to give BMO credit for drumming into me that we have to give the clients story to the underwriter, we know the client, but the underwriter only knows what we tell them. 5 c's very important, address each one.

  • James - Sub Broker on 2014-10-19 2:58:33 PM

    I appreciate the necessity of clean files and substantial notes to maximize efficiency for underwriters and so I work to provide this. I do however get multiple excuses for extremely slow turnaround times on approvals and document review where the common theme is ... "We have gone through a turnover of underwriters and this is quite normal for this time of year".

    This happens all year round from these multiple sources. My question is ... when is this not normal.

    It seems to me there is a consistent underlying problem being staffing, and by some of the tones of underwriter responses both verbal and written, they are overworked.

    I would like more consistently efficient turnaround times, and considerate responses as I am as much a client to lenders as the borrowers. As Brokers we need to make sure in our capacity we step up to make intelligent submissions supported by clear and complete notes as the first step to mitigate, but we all need to make a stronger effort on both the underwriting and submission side.

  • rhéau on 2014-10-20 10:57:31 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:34 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:34 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:37 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:38 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:40 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:41 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:44 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:45 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • rhéau on 2014-10-20 10:57:45 AM

    I THINK THAT BROKERS SHOULD BE QUALIFIED ENOUGH TO SEND DEAL ONLY TO ONE LENDER AT A TIME,I DO,THIS WAY WE COULD GET RESPONSE FASTER FROM LENDERS,OTHER WISE WE ARE DOING PROSTITUTION WITH OUR DEALS

  • Geoff on 2014-10-20 12:06:21 PM

    Wow...lots of comments, with well thought out, valid points based on each writers' experience - on both sides of the fence.

    They all seem to come down to one thing: We should strive to be the best operator we can be regardless of what our particular role is.

    The goal is {should be?} to achieve the correct result for the client. Therefore Brokers should know their clients in depth AND know which Lenders/products are suitable. Underwriters should evaluate the info with urgent attention. If each is doing their job well then the other's job is easier to do well, and the goal is easier to achieve.

    And we should never abandon the "first we get good, then we get fast" approach because as an old colleague of mine said to me 25 years ago "if we don't have the time to do it right the first time, when are we going to find the time to go back and fix it?"

    Instead of blatant commission chasing and volume building, let's focus on being good operators. Commissions and volume will follow naturally.

    Idealistic perhaps, but worth trying...

  • JPMU on 2014-10-20 2:49:41 PM

    The reality is that 99% of brokers rarely submit files to lenders that are essentially complete. You already know what the standard requirements are for a deal to be done by a lender. You know the basic documentation and you know what risk needs to be mitigated either via documents provided or by our notes in the application. MOST brokers claim that they are simply too busy and do not have the time, or they claim that their clients will not or have not provided the information. Well time for a reality check on those two – the biggest excuses.

    1) Brokers are too busy… The average mortgage underwriter in Canada will adjudicate a minimum of 5 deals per day, that includes reviewing all documentation, etc. 5 deals x 20 working days = 100 deals per month / 1200 per year. Make no mistake, even declined files need work, and the less complete that file is at submission time… the more work the underwriter has to do. Incomplete notes and applications means that they have to contact the broker to get answers to questions so that they can decision the file. The thing that gets me about this… the broker SHOULD know their clients… they should be having discussions with their customer and asking the questions that they know will need answers. ANY broker that submits an incomplete file, without adequate notes, is not doing their job. The underwriters do NOT know your customers, you somehow think that they are mind readers? The fact of the matter is that NO individual broker is too busy to take the time to have a discussion with their clients and ask the right questions. There is not one single individual broker in Canada that funds 1200 mortgage on their own without any assistance.

    The other part of this one… with a funding ration of barely 50% in this industry, it means that if a broker submits 100 deals to a lender they are likely to fund at best 50 of them, which means that you are wasting 50% of your underwriters time.

    But hey, the banks are understaffed… right? Imagine if an underwriter received applications that were actually complete, with the notes addressing risks, and the basic documentation received. Imagine how much more they could get done.

    2) Client will not / have not provided the information… This falls right into the lap of Know Your Customer. If you ASK you might be amazed at what a client will tell you. I have had MANY personal experiences where a broker has told me under no uncertain terms will the customer provide the document I am asking for… So I called the client, and guess what? Every single time they provide what I asked for. 99% of the time it is because the broker told the customer that they had all they needed, or made some commitment that they knew full well they could not live up to. They always blame the lender too, ALWAYS.

    Underwriters are not perfect, but in my time I have been yelled at by almost every broker I have ever dealt with. I have adjudicated credit for some of the biggest brokers in this country, and not one of you are innocent in this. You threaten to take your volume elsewhere, you are rude and the vast majority of you treat your underwriters like garbage unless you are getting what you want – but you are not prepared to actually do the work needed. When you do get what you want, you are as nice as pie, you buy your underwriters booze and treats.

  • JPMU on 2014-10-20 2:55:25 PM

    Continued...

    You treat your underwriters like dogs, or animals when you behave like that.

    Fact of the matter is brokers... lenders do not NEED you to survive, you think customers will stop getting mortgages if brokers disappeared?

  • kevin irvine on 2014-10-20 3:26:58 PM

    all good points but wow, you might need counselling as you seem to think 99% of brokers are bad...that is just not true and with an attitude like that you should not be working with brokers. Just like everything out there there is good and bad and just because there is the odd jerk out there that doesn't do a good job and tries to bully their way through the process doesn't mean you should paint everyone with the same brush. Also if every broker has yelled at you maybe you need to think about why that is happening as maybe it's something you are doing that is causing this as I know a lot of brokers who would never yell at anyone regardless of the situation so it makes me wonder why you get all the grief?

  • James - Sub Broker on 2014-10-20 3:29:03 PM

    JPMU,

    I am sorry you feel that you have been so harshly dealt with. I am sure a lot of your sharing is quite an accurate account of scenarios you have faced, however this anger can also fall to those who are not worthy of that frustration and anger, and in turn can feed from one person to another. We are all just humans trying to be.

    Lenders change policies fast and furious and at times which can confuse all parties, and on both sides of the coin either someone likely is having a tough personal or professional day that boils over into a bad communication exchange, however these are not excuses to allow for rude or disrespectful behavior for any of us.

    I have been on the flip side of these statements and many a time with a starting point of a rude or exhausted underwriter, whereby not all of the blame can be placed on the submitting broker.

    I think this statement of not needing brokers to survive may be short sighted, but either way, I hope either way, your day gets better and your wounds heal so that you can enjoy the positive relationships you foster in or outside of the industry moving forward.

  • Deborah on 2014-10-20 4:02:44 PM

    lets everyone settle down. MBN.ca you did a real good job stirring the pot. We are all working for the same end results people. Bottom line, there is good and bad in every situation. Nobody deserves to be yelled at, and nobody is ever so big and important that they should do it, (both ways). I have been treated poorly by underwriters, for no valid reason and I never yell at them. I tell myself they aren't yelling at me just the situation. Yes lenders are changing the rules fast and sometimes a broker misses something, but lenders remember... we don't just have your rules to remember, we have everyone's rules to remember, and it's hard to know everything all the time. You catch more flies with honey than vinegar, that's my mantra. Write great notes, try to give as many docs upfront as you can and if you didn't (and you know if you didn't) then don't get mad if it takes extra time to complete the file. :)

  • Adrian on 2014-10-20 4:10:43 PM

    JPMU,

    If you look at my previous posts you will see that I am all for good practices but it's pretty rich to paint us all with the same brush.

    "rude, not one of you is innocent, treat your underwriters like garbage, 99% rarely complete, 50% closing ratio" etc etc.

    In my substantial time as an agent I have never treated an underwriter with less respect than I expect from the underwriter. We can all have a bad day from time to time but the reality is that we should all assume the best of intentions, work respectfully with each other, stop playing the blame game and certainly avoid painting an entire group with the same brush, both brokers and underwriters alike. This is a high stress, long hours, high risk game we are in.. If we all recognize that, then perhaps we can work well as a "system", produce great results for our clients and all stake holders.

    Your post reflects a gap of understanding of the broker/agent pre lender application process and timeline and to be frank is simply not accurate. You are obviously angry and have a deep dislike for brokers.. If your post is an accurate account of your experience with "every broker" you may want to look inward.. The whole common denominator thing.

    "Fact of the matter is brokers... lenders do not NEED you to survive, you think customers will stop getting mortgages if brokers disappeared?"

    Really?? Yikes.. Might be time for a career change if for nothing else, for your health.








  • Seasoned Professional on 2014-10-20 5:35:02 PM

    Bottom line is this. Turn around times have slowed up. Why? Probably because lender staffing levels (not to mention being able to find experienced underwriters) do not match volume, because policy changes are happening as quick as you can change your underwear, insurers & lenders are paranoid about the legislative changes and all the claw backs to policy and qualification rules, realtors often do not place realistic COF dates in their rush for commissions, clients are not ready with paper before they see their broker (and/or lenders & insurers are asking for more and more paper especially from the broker channel), appraisers are slower and backed up, and yes some brokers aren't the best but the FACT IS turn around times are slower in our channel than at the branches in the case of the banks & credit unions and the mono lines have had staffing issues. No need to point fingers and place blame. Any rational lender can tell if their turn around times are slower. Any BDM will tell you this, and they will weigh out the time wasters, and the whiners along with all the other riff raff but when they talk to the seasoned, professional brokers out there they will hear a theme. Deals are tougher to get done so it is taking more time than it used to in order to make deals work (if you can get that far on many). So suck it up & do what is necessary for your clients and your lender partners. I hope our lender partners will do the same for us.

  • Ron Butler on 2014-10-20 7:41:19 PM

    I think almost every big broker in the country has yelled at an underwriter in their day. I plead super guilty and frankly I was wrong 90% of the time and I admit it. The underwriter is just following the rules their company lays down 90% of the time and how can we fault them for that.

    I am not sure it is lack of staffing that causes all the slow downs today, I think it is more of the massive levels of investigation that take place: google the clients names, google the workplace, run the mortgage credit bureau, research every single address that shows up on the Bureau, on and on, there is at least 200% more work to do today than 3 years ago, maybe 300%.

    Finally: pre-funding audit, heck, that barely existed 3 years ago but now with rooms filled up with compliance officers since B-20 pre-funding is going up one side the file and down the other. It's just so much more work to finish a file and likely it will get worse before it ever gets better.

  • Adrian on 2014-10-20 7:57:14 PM

    Very good points Ron..

  • Paul Therien - CENTUM on 2014-10-21 3:15:05 PM

    As someone who has worked on both sides of the fence at various levels I find the commentary interesting. In my current role I am neither a mortgage broker, nor am I a lender. As a brand leader my role is to provide solutions and support to our CENTUM franchise owners. That means looking out for my franchises while balancing the needs of our lender partners and working to create equitable solutions so that all parties are successful. At the end of the day, that is exactly what this is, a partnership.

    JPMU… you make some valid points, and back in the day when I was an underwriter and then senior manager of adjudication for FirstLine, I too had days where I felt some of the frustrations that you have expressed. I also had frustrations as a mortgage broker that pretty much align with what many of the brokers are saying.

    Your comment about lenders needing mortgage brokers. I suppose that really depends on your perspective. Some lenders have taken the position that they do not need brokers, and that suits their business modelling. The reality however, is that I think the need is mutual for most people who are in this industry. We have many lenders that rely solely on brokers to originate business, and we have others that do so through multiple channels. In all cases it truly depends on the needs and demands of the consumer and how they choose to obtain their home ownership financing.

    Much of the commentary surrounding this subject has always elicited a mentality of finger pointing from both sides, not from everyone of course, but in my opinion too many people participate in that type of rhetoric. I believe that we are in a partnership and that we, lenders and brokers, need to work to find solutions that at the end of the day provide our customers with world class service. We all know that these frustrations exist for both sides, rather than getting into a dialogue centered around who is worse and who is better, the question should be: “What can we do, working together, to come to a solution?” If we all take accountability for our own roles, it becomes a constructive conversation based on mutual respect and accepting ownership for those things that we can control while At the same time having an understanding of what we can do to assist each other in making necessary improvements.

  • M. Robertson on 2014-10-21 5:20:27 PM

    Well said Paul, and thank you for taking the time to share your thoughts. You must be one of the eloquent people in our industry.

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