As the sun shines longer and the summer months wind down, the real estate market typically sees a surge in mortgage applications. Many prospective homeowners aim to secure their new homes before the long, dark nights set in. With this seasonal uptick, lenders are ramping up their efforts, enhancing their systems and processes to streamline the application-to-offer timeframe. In some instances, lenders are now issuing offer letters as quickly as the next day, a significant advancement that benefits both buyers and their agents. However, this swift pace does pose challenges, especially for compliance teams who must ensure all regulatory and procedural standards are met.
The Challenge of Compliance
When a case is reviewed by the Compliance Team, whether pre or post-application, any identified remedial work must be completed within 48 working hours. Unfortunately, there has been an increasing number of brokers who fail to meet this 48-hour deadline, leading to unnecessary follow-ups and delays. This lapse in compliance can have serious repercussions. If a case has unresolved remedial issues, it could be at risk of being withdrawn to avoid complications for the broker or the network. Even after an offer has been issued, lenders retain the right to withdraw it if new information surfaces. Additionally, lenders conduct post-completion checks, particularly concerning income verification. Cases have been cancelled when the income declared at the application stage was found to be reduced or unsupported at drawdown.
Best Practices for Brokers
To ensure a smooth process and avoid potential pitfalls, brokers should adopt the following best practices:
- Verify Documentation: Ensure that the documents provided, such as pay slips, match the bank statements. If discrepancies arise, seek additional supporting evidence, such as an HMRC Taxable Income Listing, a letter from the employer, or a copy of the employment contract.
- Confirm Identity Documents: Check that identification documents are signed and current. For driving licenses, verify the place of birth; if it is outside the UK, provide proof of residency.
- Adhere to Deadlines: Complete all remedial work within the 48-hour timeframe. If you anticipate any delays, contact the Compliance Supervisor who sent the initial email and provide an update. Do not leave notes on OMS, as these will not alert the team to the issue.
- Stay Informed: Keep abreast of the latest compliance updates. Regularly check the Network’s communications or log in to LMS and click on the Compliance Updates tab to stay informed of any changes or new guidelines.
Conclusion
As the market heats up and more clients seek to finalize their home purchases before winter, it is crucial for brokers to stay vigilant and compliant. By adhering to these guidelines, brokers can ensure a smoother application process, reduce the risk of delays, and maintain a positive relationship with lenders. Keeping up-to-date with compliance requirements and promptly.
If you need any further information or clarification, please contact the Compliance Department who will be happy to help.
Regards
Alan Baldwin
Director of Compliance
For any questions or queries, contact the Compliance Team
Call : 01708 676110
Email : compliance@connectmortgages.co.uk