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Banks’ methods of handling bond applications questioned
Bank-bashing (by no means always justified ) has become a popular pastime in SA – but there is one serious cause for concern and that is the banks’ methods of handling bond applications, says Clarke.
“Almost daily,” he said, “we pick up complaints about the way mortgage bond applications are handled by the banks.”
The big four SA banks, he said, are fortunate to have many exceptionally loyal clients – and one result of this is that often these clients will reject any help from bond originators and will instead go directly to their own bank.
Here, said Clarke, after an initial meeting with a consultant, who is not always an expert in bond finance, they can often find themselves having to track the progress of their bond via a call centre.
This, says Clarke, can be a totally impersonal experience.
“The client finds himself dealing with a disembodied voice on the end of a line – and this bank representative voice is likely to have no concern or compassion for the client’s position.”
In the worst cases, said Clarke, the bond gets seriously held up or even lost – sometimes forcing the applicant to start all over again.
“It goes without saying,” commented Clarke, “that this can result in the buyer losing out on his dream home and the seller having to start the sale process all over again.”
The (sometimes) unsatisfactory bank performances, said Clarke, date from the time when bond origination caught on and the banks found that they could leave much of the paperwork to the originators. This, in turn, led to their cutting back on staff numbers.
Now, said Clarke, they are on a different tack and are trying once again to channel more applications directly to themselves.
“By and large,” he said, “this does not work to the benefit of the applicant. If, however, he approached a bond originator to apply to several banks to get the deal best suited to the client.”
“The importance of this cannot be over-emphasised. “It is perhaps the main reason why Mortgage Plus Finance is achieving a hit rate 10 to 15% above the SA average and building such a good reputation for itself.”
“All in all, therefore, I am inclined to feel that banks must foster rather than try to eliminate originators.”
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