The company believes that if sourcing systems fail to deliver accurate data and provide whole of market coverage, brokers will have no choice but to turn to lenders for reliable KFI illustrations.
Peter Beaumont, Sales & Marketing Director, said: “In an ideal world, brokers should be able to rely on sourcing systems to provide comprehensive and accurate product information. Unfortunately, we don’t live in a perfect world. If the systems fail to clear these two critical hurdles before M Day, then brokers will have no alternative but to turn to lenders for accurate KFI’s. Research recently carried out by Mortgages plc confirms that the majority (70%) of brokers would prefer to use sourcing systems because they make life easier. If systems are not 100% reliable, however, they will inevitably fall from favour.”
At the moment, sourcing systems are putting on a brave face and are saying they will be ready for M Day, but there is little evidence to support their stance. They cannot guarantee all product data has been verified by lenders and there are important sectors of the mortgage market, such as sub-prime lending, for which many systems cannot source accurately – an issue which some of them appear unwilling to address in the immediate future.
Beaumont continues: “To rub salt into the wound, sourcing systems are turning to lenders to finance the cure to the problem. Not only have we been asked to pay thousands of pounds towards the development of major systems enhancement projects, but we are also having to pay to verify our own data and for each KFI, DIP and application processed via a sourcing system! I don’t see why lenders are, yet again, being expected to pay for a solution which will ultimately feed other organisations profit streams.”
“Sourcing systems are no longer simply providers of product information; they also perform a critical role within the regulatory process. There is no doubt that life will be a lot easier for brokers and networks if the sourcing systems get their acts together and develop a reliable solution to the problem. If they don’t, however, their future is by no means guaranteed.”
Mortgages plc has committed considerable resource to ensure it can provide accurate KFI’s after 31 October and to ensure it can verify data being used by sourcing systems.