For many people working in the mortgage industry today, interest rate volatility – and the need to have difficult conversations about rising rates and product pulls – will be a challenge they are facing for the first time in their careers. So, it’s inevitable that there will be some who feel their understanding of the current situation is limited or incomplete.
Even those who thoroughly understand how lenders operate may feel they lack a trusted resource they can point to when asked by less experienced colleagues or non-experts how it all works.
The guide also makes suggestions for lenders on how they can move forward and adapt to the new normal.
Because of its educational remit, the guide assumes no prior knowledge and is designed to be accessible to anyone working in the industry from entry level up. So, whilst we realise much of this document will tread familiar territory for many readers, we wanted to create a truly ‘back to basics’ guide so that everybody could be brought up to speed.
For the same reason, IMLA and AMI decided to host the guide on our Working in Mortgages website, where it will sit alongside other educational resources for a wide audience of aspiring, newly-qualified and experienced mortgage professionals alike.
The guide answers questions like:
- How are fixed-rate mortgages funded, and what is a swap?
- Why can some lenders offer more notice of product withdrawal than others?
- Can product withdrawal deadlines be kept within the 9-5, Monday-Friday?
- What would happen if a 24-hour product withdrawal notice period became mandatory?
- What needs to happen next – what can lenders and brokers do?
We welcome feedback from member firms, and hope it will serve as a useful resource for many across the wider industry.
Consumer guide – let us know your thoughts
We are also considering producing a similar guide designed to be client-facing, to help advisers explain to clients what is happening in the mortgage market. We know managing expectations is incredibly difficult at the moment, and a plain English consumer guide may help prepare the ground for future conversations.
Please let us know if you think such a guide would be helpful via info@a-m-i.org.uk so we can gauge interest.
What this guide is not
It’s important to note that this guide only describes how things work at the moment. It is not there to say we can’t evolve or do things differently in the future.
We realise it has been a time of exceptional stress, uncertainty and frustration for almost everyone in the industry – brokers especially. Current systems are set up for a world of low rates and long-term predictability, so clearly the status quo will have to evolve.
That’s why AMI is urging lenders to maintain an open dialogue with brokers, try to ensure all product withdrawal deadlines stay within normal business hours (especially if no technical support will be available after 5pm/at the weekend), and give as much notice as they can via all reasonable channels.
We have also conveyed that we expect the reasons for a product pull to be communicated clearly and promptly, to help brokers explain to clients what has happened and why.
AMI will continue to engage with the broker community, IMLA, other trade bodies and key stakeholders in the lending sector as we work towards common solutions.
This guide is therefore only a starting point for the conversation we need to have as an industry – not the final word.
The guide can be downloaded here.
