Where should advisers place 'complex' borrowers?

Now 0.1 days slower might not seem a lot in the grand scheme of things but it could also be seen as a consequence of the increase in activity, plus what we believe is a rise in the number of cases that might be defined as ‘complex’. These types of cases, particularly in the wrong hands, could end up taking far in advance of these timescales – far worse in some instances.

If that is the situation for certain lenders, then the news that we’re seeing a rise in ‘complex’ cases should be of interest to advisers who will need to think carefully about where they place these borrowers.

For instance, there’s no doubting that the last 12-14 months have been very challenging for many homeowners. Finances have been impacted for millions of people, with many relying on furloughed income, and also having to cut their cloth accordingly in terms of some of their biggest outgoings.

While payment holidays for mortgages, credit cards, and the like, is well past its 2020 peak, the consequences of those decisions are likely to be felt by those individuals for some time.

Plus of course, many people will have seen their circumstances change – often dramatically – over the course of the last year. Jobs will have been lost and regained; people who were employed will have struck out on their own becoming self-employed; individuals will have taken on multiple roles in order to secure the income they need. The list goes on.

For many people, the complexity of their financials and their financial footprint will have grown and changed, and this clearly has an impact in terms of the advice that is provided set against the potential needs and circumstances of the client.

One of the most popular uses for second charge mortgages is debt consolidation, and for many people through the pandemic, there has been a need to take on debt – or to take a holiday from the debt they were paying. Now, however, as confidence returns to the economy, many homeowners are able to consider the equity they have in their homes as a means to pay off the debt they have accumulated.

The interesting part here can often be how advisers approach those cases which are far more ‘involved’ than your vanilla prime ones. For instance, not every lender is set up to deal with this type of case, and when you couple this with potential resource issues, you might find yourself on the back front.

For instance, we had a recent case through from an introducer which we were able to fund within three days, much to the delight of the advisory firm that introduced it. The reason for their delight was that it had been a complex case which they had initially placed with another lender – unfortunately, that case had then sat with the original lender for six weeks before they decided they were unable to proceed on it.

Clearly, participants in the market will always work at a different pace and when you come across a complex case it takes a certain skill-set and experience to be able to see the wood for the trees and deal with it quickly. This is certainly not to disparage the other lender here, because we’re all aware of what can happen with certain cases particularly if it’s not quite fitting criteria or you’re perhaps having to dig for clarity.

Thankfully, in this circumstance, we’d worked on a number of cases in this vein and, from that point, it was not as ‘complex’ for us as it might have been for others. Plus, we have a specific product range aimed at those borrowers who might well have been through some financial difficulties over the last year that fitted the bill

The important point to take away here is that, just because a case might be viewed as ‘complex’, doesn’t mean that the borrower isn’t just as deserving of the finances they need, or that those cases can’t be turned around in exactly the same timescale you would expect from a more ‘vanilla’ case.

You might well argue that, given what many people have been through over the past year, their need can be greater and we have a duty as a second charge market to find the right solution in as quick a time as possible. Having the ability to quickly pass that case over to a lender like Evolution might be the very best option as you’ll know it’s going to be dealt with immediately and you’ll be in a position to give a far more definitive answer to the client than perhaps otherwise.

If you’re finding cases – complex or otherwise – sitting on other lender’s desks for weeks on end, the good news is that the market is highly competitive, and if you’re aware of the options available to you, and the lenders well-versed in this part of the market, then you can provide the right solution in double-quick time.