A survey by finance lender LendInvest found that more than half (56%) of brokers said lenders failing to stick to their original decision is the most frustrating part of the alternative finance market.Nearly a quarter (24%) said poor service was their main frustration, while high interest rates were the main complaint to 14% of the survey’s respondents.
The chief commercial officer at LendInvest, Matthew Torch, said:
“At LendInvest we are regularly approached by brokers who began their case with another lender but became so frustrated with the process or decision making that they are now looking to switch to another lender.”
Brokers approach lenders on behalf of their clients for residential mortgages, commercial mortgages and bridging loans. They can usually get an initial loan decision very quickly. An initial loan offer is not binding, and lenders can change their mind part way through the loan application process. Sometimes, a lender changes the conditions of the loan and this can be unacceptable to the borrower. The lender’s underwriters may agree on a loan, but the credit team could disagree and turn down the loan.
If a loan deal falls through, the borrower may blame the broker even though it is outside of their control. For this reason, brokers are asking for transparency and the assurance that once a lender has agreed in principle to a loan, they should commit to it, provided that the loan application documents and information submitted by the borrower are accurate.