Posting loan documents has proved cumbersome during the pandemic says Melbourne broker
With only one major bank offering a fully digital experience, COVID-19 is making the loan application process difficult for brokers in Victoria. With the state in stage four lockdown, the majority of borrowers who go through the broker channel are being forced to rely on Australia Post to deliver their loan documents on time in an environment where delays have skyrocketed. Bernard Desmond experienced the full effects of this recently when a client’s documents were delivered to the wrong address.
Don’t ditch the printer
In a pre-pandemic world, printing out loan documents to sign and post back to the bank was no big deal. Now that Victorian brokers can’t meet with their clients face to face, this is proving to be quite a challenge – especially when most of Desmond’s clients don’t own a printer.
“When we are taking clients on board now, we are actually asking them, do you have a printer at home?”
“If I’ve got a 30-day settlement and the client says, I don’t have a printer, I’m not going to take them to a bank that does not support digital documentation.”
With only one major bank and one second tier lender offering a fully digital process for the broker channel, Desmond is advocating for change.
“We know from my own experience their proprietary channels are doing digital.”
“Why is the broker channel not being given the same experience?”
“There’s nothing we can do.”
He recently had a client who missed settlement after their loan documents were sent to the wrong address.
“It’s quite a stressful situation for them.”
“They can’t do anything, I can’t do anything – and the bank’s not being very accommodating in this instance.”
The client sent the loan documents for their purchase to the bank via Express Post, only to find that they didn’t arrive. As it turns out, the documents had been delivered to an Adelaide address.
“We called up Australia Post and they just bluntly said, sorry we can’t do anything.”
He was told that the mail had been missorted. After raising a compliant request, the documents were eventually tracked down and returned.
“Eventually we got it back, but these are documents which are time sensitive so the banks have to follow their processes.”
“They can’t act on it on the basis of scanned documents.”
As a result, the client has paid interest for the delay; which Desmond is trying to get reimbursed.
According to Desmond, Australia Post has refused to be held accountable for the mishap due to the increased pressure they are under at the moment.
The problem with snail mail
Delays have become all too familiar in the current environment. Another client recently waited almost two weeks to receive loan documents from a big four lender after their application was approved.
He says the client of a fintech even faced a similar problem. Despite advertising a fully digital process, the lender still requires mortgage of land documents to be wet signed and posted. The reply-paid envelope given to the client was addressed just one suburb away – yet it took 10 days for the documents to be received by the processing centre, even though they were posted through Express Post.
“Suddenly all this becomes the broker’s problem because you are trying to act for the client.”
He says a simple solution would be if lenders invested some extra funds into digitising the process for brokers.
“Brokers are more than happy to see the client and get in front of them and guide them in the process – we’re only asking for these changes now because we can’t see clients.”
In a push to better this situation for brokers and their clients, Desmond has started a petition to Australian banks, calling on them to digitise their home loan contract signing process and standardise VOI processes across the board – a sentiment echoed by FBAA managing director Peter White AM. In a press release prompted by Desmond’s activity on social media, White said that in the year 2020 there was no reason for banks to mail time-sensitive loan documents and that this made the process “farcical” on top of already lengthy turnaround times.
“Electronic signatures are used and accepted legally across the world, and those banks that don’t embrace this will start to lose business as the broker channel looks to a more streamlined system for their clients.”
In some good news for the industry, White says he has been contacted by lenders who have committed to making the change following the social media outcry.