Lenders too frequently favour a “black and white” approach to qualifying clients, complain a growing number of frustrated brokers.
“Lenders have tightened up so much; they no longer employ common sense (when evaluating an application),” David Hetti of Invis told MortgageBrokerNews.ca. “They go entirely by criteria that are set; the feedback is poor and the underwriting has no common sense.”
Broker frustration is palpable as lenders, unsure of what the future holds, have begun tightening lending rules and, in some cases, raising rates.
“Lenders are being too tight on the deals they take and who they take deals from,” Sundeep Saggu of Verico The Mortgage Wizards told MortgageBrokerNews.ca.
Saggu, however, has a creative solution that he thinks could overcome lender reluctance.
“There’s no communication or relationship building between lenders and brokers,” he said. “Most have never met and an attempt to bridge the gap would mitigate a lot of the lender’s concerns.”
It’s a solution that has worked well for dealing with insurers.
“If you have a common sense approach and tell a story that makes sense, I find that Genworth is willing to listen to and work with me,” Jeff Attwooll of Verico K-W Mortgage told MortgageBrokerNews.ca earlier this month. “They will put the pieces together of your story makes sense and their credit allows it, they will push the deal through.”
The insurer’s willingness to listen to Attwooll’s story is due to the relationship he has forged with them – something that is sorely lacking among brokers and lenders and a sure-fire way to ignite a more liberal approach to lending, argue some industry vets.