Banks slammed for yet more application delays

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has again called out banks for slow approval times, saying that the problem is not only impacting consumers but now affecting the mental health of some mortgage advisers.

FAMNZ country manager Leigh Hodgetts said the association is working hard for mortgage advisers, including taking the case of unfair ComCom recommendations directly to the new minister of commerce and consumer affairs Scott Simpson, but its efforts are being undermined by poor banking practices.

“Our members, and I’m sure other mortgage advisers, are spending 70 per cent of their time on work that should be taking 20 per cent of their time, chasing banks, getting errors fixed, and following up loan applications that have been in a queue for way too long.”

She said times have again blown out to more than 10 working days, and has heard reports that real estate agents are telling buyers to deal with banks directly.

“This is unacceptable and anti-competitive, and if the Commerce Commission is serious about competition they need to divert their focus away from advisers, who are doing all they can to ensure consumers are looked after, to the banks who clearly see delays as a way to increase their profits,” she said.

Ms Hodgetts said many of the association’s members are solo advisers, and “this directly impacts their income and ability to write new loans.

“Some are struggling emotionally as they see their income drop through no fault of their own.”

She said feedback from members is that the workload and delays advisers are experiencing is “next level, and in fact worse than prior to Christmas.”

Her concern is that the situation will even get worse as the market increases due to lower interest rates.

“We cannot accept more excuses from banks about staffing and lack of technology.

“Just fix the problem,” she said, adding that similar delays don’t happen in most other countries. 

“Our banks are using manual and antiquated systems that should have been updated years ago.”

Ms Hodgetts called on ComCom to “put more pressure on banks to support mortgage advisers and their customers.”