Turnaround time turmoil

Advisers say turnaround times of two to three weeks are commonplace in the market, as banks struggle with rising demand and mortgage deferral requests. 

Friday, September 11th 2020, 8:06AM 3 Comments

Turnaround time turmoil continues across the market, with big four banks taking anywhere from a week to three weeks to process mortgage applications. 

Additional questions about future financial security, more forms to complete, and mortgage deferral requests have been blamed for the slowdown.

Joel Oliver of SuperCity Mortgages said turnarounds of about ten working days were common. He described the delays as "embarrassing".

Craig Pope at Loan Market said "a two to three week turnaround" was the norm at the moment. 

Pope said borrowers were subject to intense scrutiny. 

"No matter how thorough we make an application, they [the banks] inevitably come back with a question or two, sometimes having not properly read through what has been sent. Or asking mundane questions, like 'what is a 43 year old's exit strategy for retirement?'"

Pope added: "As soon as they ask questions or request more info, we get put back down the bottom of the queue and then it takes even longer."

Geoff Bawden of Q Group said turnaround times were "a disgrace" across the main banks. He said lenders were asking clients unknowable questions about their future financial security.

"To seek declaration that a client will not be affected adversely by Covid in the future, which some lenders are now requesting, is laughable," Bawden added. "How the heck can any one provide an assurance around that, when we don't even know what effect Covid might have on the community or economy moving forward?"

Glen McLeod of Edge Mortgages said banks were "still inundated" with loans. 

"They are all between eight and 10 days at the present time," McLeod added.

The complaints about turnaround times come as ANZ, New Zealand's biggest bank, makes changes to try and reduce its backlog of deferral requests and new loan applications. 

The bank has reallocated staff from branch to handle broker applications, and has made some new hires to its adviser market team in recent weeks.


Tags: Lending

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Comments from our readers

On 11 September 2020 at 9:28 am krish@mortgagesuite.co.nz said:
To get approvals under 10 days is a luxury but banks are not doing much to help themselves. Over the last few years, the Broker Hub's of all mainstream lenders with the exception of BNZ have taken on the responsibility of approving Business Loans as well or any applications with Self employed incomes. These applications should be farmed out to the Business Managers as they do at BNZ. Approval turnaround times from BNZ Business Managers are a quick as 24hrs. In most of the cases, the Business Managers are better equipped to handle the more complex applications than the Broker unit teams.

Krish Krishna
Mortgage Suite Limited
On 11 September 2020 at 9:52 am JeffQV said:
Turnarounds are a disgrace and worse the questions coming back with requests for Employers and Accountants to confirm ongoing work is, as Geoff Bawden says, laughable.

We've had Employers refuse and a couple of less than comfortable chats with Accountants. As my daughter says, 'sort your s**t out banks, there is no excuse for this. Agents, please stop putting 5 day finance clauses in Contracts, it only leads to a request for an extension.
On 12 September 2020 at 10:48 am michaelb said:
Banks no longer have skilled face to face managers. So sad to see as up and until early 2000s Branch managers, business Managers’ all approved their own lending within delegated authority. The more skilled and senior the higher the lending discretion.

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