Connective focus on lenders and brokers leads to launch of new digital community
Digital lender scenarios provide real-time support through toughest lending environment of our time
Removing barriers and processes that prevent timely and direct access and communication between lenders and brokers is a critical priority for the mortgage industry right now, as we continue to face the most complex lending environment Australia has ever seen, according to Australia’s largest mortgage aggregator, Connective.
The pandemic has not only created a highly unstable regulatory environment around lending, with frequent and often dramatic changes to policy such as the recent Federal announcement on Responsible Lending Obligations, but also tied up the home loan approval process with the variance from application from pre-approval to conditional approval increasing across the major lenders, making for an unpredictable lending environment.
Connective has tackled the challenge of facilitating a more dynamic diaglogue between brokers and lenders with the launch of their digital Connective Community, including the popular loan scenarios group – which has proven a game-changer in broker, lender communication.
The online community provides a digital forum for lenders to converse with brokers in real-time, brokers can present real scenarios of clients they are servicing for lenders to provide guidance and options and, in-turn, brokers can provide a much more efficient service to their clients.
Mark Haron, Executive Director at Connective, said that the community has grown rapidly to over 4,000 members with 2400 active every month, and includes several scenarios revealing key issues and trends faced by the industry as it navigates the economic fallout of COVID-19. There are over 60 lender BDMs in the group helping clarify how the scenarios would play out from a lender perspective and answering questions.
“The need to improve the flow of information between brokers and lenders has been compounded by the multitude of economic challenges that COVID-19 has thrown at us all. At the same time, we know that processing times for queries with lenders have increased, making it hard for brokers to get certainty and stability for their clients.” he said.
“The industry is confronted with one of the most complex lending environments we have seen this generation. Brokers and lenders need more direct lines of communication for everyone’s sake. We’ve found that creating these online communities is the perfect solution to connecting more people, more efficiently.
“Our community is already showing many brokers are looking for more clarity from lenders on how JobKeeper will be considered when applying for loans. We’re also seeing a lot of scenarios exploring refinancing options. Both of these trends point to increased financial pressure on Australians and potentially more complex lending scenarios, which was confirmed in some of our seminars in our popular Digital Lender Splendour program in October this year.
“Some lenders, especially many of the major banks, won’t accept loan applications relying on JobKeeper payments, with some major banks encouraging brokers to ask prescribed questions about the impact of the pandemic on their finances. Layers of complexity like this deserve timely interaction and guidance between brokers and lenders – and we can provide it with our online communities,” Mr Haron said.
A common scenario observed in the loan scenario group in the Connective Community is customers looking for larger loans relative to the size of the asset they wish to purchase, measured as the Loan to Value Ratio (LVR). With many industry commentators anticipating that lenders will drop their maximum LVR in response to risks created by the pandemic, access to credit will likely be an ongoing issue.
“The recent announcement by the Federal Treasurer to remove Responsible Lending Obligations demonstrates that providing access to credit is clearly a priority for the government,” said Haron.
“Couple this with announcements in the recent Federal Budget about the expanded instant asset write off available to 99% of businesses, the expansion of the First Home Buyers scheme by 10,000 places, and capital gains tax being scrapped for granny flats, the opportunities for borrowers are opening up.
“We are seeing strong interest from brokers for more information on how factors such as JobKeeper are going to impact the size of loans granted, and we predict new initiatives will continue to increase the demand for more timely and easier access to information from lenders.
“Digital solutions that bring together lenders and brokers to openly discuss how the current landscape is changing is essential to facilitating the flow of credit safely.
“Brokers need to know how lenders are responding to rapidly changing policies and new information, in near real time, to support their customers, many of which are in very vulnerable financial positions.
“Over the last twelve months brokers have stepped up to support their clients through very challenging times; drought, fire, floods and a global pandemic. It’s important that, as an industry, we embrace these opportunities to ensure we help the Australian community recover.
“We will continue to explore ways that Connective can increase the flow of information from the lenders through the broker channel to the end consumers,” Haron concluded.
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