Brokers seek greater transparency in lender guidelines
Posted on Aug 22, 2012 in Mortgage Market Updates and News
It's one issue likely to crop up again and again in the 2012 CMP Brokers on Lenders survey, but lenders should move now to correct it, say brokers calling for more specific guidelines and restrictions.
“Lenders need to be more up front about their rules and restrictions,” said George Mazurek, manager at CMC Automated Mortgage, in Cranbrook, B.C. “A greater measure of transparency will help in speeding up the mortgage process for brokers and their clients.”
For instance, he said, clients lose anywhere from three to four days simply because many lenders do not publish the regional restrictions of the products they offer.
“We only find out that a lender does not lend in a certain area after we put in the application," said Mazurek. "By the time we get a response from the lender, several days have passed. It is especially problematic for client working under the deadline of tight subject removals.”
Such was the experience of one of Mazurek’s client who wanted to purchase a property in Agassiz, in B.C.'s Fraser Valley, just north of Chilliwack.
“Lenders turned down the application because of their respective geographical restrictions,” said Mazurek. “Those lenders lend in Chilliwack, but not in Agassiz.”
His concerns, mirror the complaints aired earlier by Sharie Marie Francoeur, sub-broker with TMG Mortgage Group in Port Alberni, B.C. She said many lenders tend to favour large metropolitan areas and ignore applications from small rural communities.
But Mazurek said the situation can be remedied if lenders simply told brokers upfront which areas they serve.
“Lenders should advertise or make it a list identifying the areas they serve available to brokers. This way we can avoid wasting a lot of time,” he said.