Mortgage servicer Oakwood made the statement following the yesterday’s news that 27 of the 40 FLS participants had increased their net lending in quarter one this year.
Richard Klemmer, partner at Oakwood Global Finance, said: “Increased levels of new lending can only be a positive thing for the industry, which welcomes and needs new stimulus.
“But new activity brings its own challenges and lenders need to be sure that, post completion, they have the people and systems in place to handle any sustained uplift in customer servicing requirements.”
Klemmer added that the actions of lenders once the mortgage has completed can damaging for brokers if the relationship has not been managed correctly, as brokers rely on referrals and repeat business as a major source of future business.
He said: “Brokers too will be wary of potential reputational impact if their customers buy products with lenders that subsequently may not have the capacity to cope with their ongoing demands.
“Servicing a mortgage account could be as simple as keeping in touch and answering questions or it could require a more sensitive arrears management strategy if things go wrong. Either way, brokers and lenders will bear a reputational and possibly regulatory risk if these requirements are not met.”
But Klemmer said that new and established lenders alike are recognising the need for robust servicing systems and expert people, and are seeing the benefits of the flexible cost model that outsourcing brings.
He added: “A lender working in partnership with a really good servicer enhances the customer experience, protecting the loyalty and referrals that are at the heart of broker business.”