One broker is hoping lenders better streamline their documentation process after a number of law firms began charging clients more to deal with files that come from monolines than their bank counterparts.
“I’ve been hearing from lawyers’ offices that they are having difficulty with some of the instructions that are being sent by non-bank lenders in Edmonton and some other areas in Alberta,” Connie Graham of Axiom Mortgage told MortgageBrokerNews.ca. “Many of the lawyers are actually starting to charge clients an additional fee if the mortgage instructions are from a non-bank lender because it makes more work for them at closing.”
Graham and her colleagues attended a meeting with one of the law offices last week and were told, specifically, what the issues were with each file.
According to Graham, the length of the instructions are sometimes seven times as long as a bank’s instructions. They also often lack specific funder contact information, forcing lawyers to call a 1-800 number and wait on hold before reaching someone who may or may not know how to answer the specific question.
“They need to streamline their instruction process, they need to have clear contact information for a person to contact if the lawyer has a question about instructions, they need to have an email portal or access to the information because the lawyer has to fax everything in (and that can take) 20 minutes for someone standing in front of a fax machine instead of two minutes to package it in a PDF or upload it to a portal," Graham said.
Some law offices now ask which lender the client is getting their mortgage from before giving a quote, according to a number of Graham’s clients. She has also heard from at least ten different law offices in the past year who have had to charge more for monoline files.
“It really isn’t just because the lawyer’s office isn’t familiar with the instructions or they don’t really know the process or they’re dealing with a different lender than they normally deal with; it’s because it actually physically takes them more time,” Graham said. “As brokers we want to use monoline lenders because it’s to our advantage.
“The whole point … is that we pass the message on to the lenders so that they consider streamlining their processes.”