During COVID we have seen lender approval times extend in time well beyond pre-covid levels.
Many lenders were forced to devise and implement substantial changes to policy and process, at a time when many of their staff, whether on-shore or off-shore, were themselves in lock down. It is fair to say the banks grappled to understand, and deal with the impact COVID had or would have on both their ability to process loan applications, and on the quality of their loan book.
Since late last year, we have also seen a massive upsurge in the property market, and this has caused additional pressure on lenders to approve loans as they continue to deal with later stage Covid impact. This has seen turnaround times lengthen to the point that it is rare for banks to meet standard finance approval dates for clients. We have also seen evidence of different turnaround times varying depending on the channel used when clients applied for finance (direct or via a broker).
As a result of this, the Mortgage & Finance Association of Australia (MFAA), and respected mortgage aggregators such as Connective, have initiated a program to invoke change to improve the turnaround times of applications, and to get consistency across channels. It was very pleasing to be involved in a meeting today in which several major lenders acknowledged the status of play, and communicated their commitment to improving turnaround times across the whole market. At the heart of this issue is our customers, and as brokers, we have a best interest duty to ensure you get the best outcome that you can. Connective now publish a daily dashboard that enables us as brokers to see current turnaround times for each lender. This is one factor of many that we consider in addition to the obvious focus on rate. We are hopeful the experience you receive as customers will improve greatly over time.