The introduction of the Mortgage Market Review (MMR) in April last year was one of the biggest changes we have seen to the mortgage market for nearly a decade. Most industry commentary has been focused on how the new rules have affected lenders and brokers, looking at the potential increase in application times and the change of process needed in order to remain compliant. Fewer people have devoted their comments to the customers’ perceptions following the MMR.

Customer view

We recently partnered with YouGov to conduct a research survey of 2,000 consumers, looking into borrower spending habits following the MMR. With more rigorous checks being undertaken by mortgage lenders, 42% of respondents said that they would change their spending patterns in an effort to ensure they got the mortgage deal they were happy with. A further 33% of borrowers said that they would be more likely to take out a new mortgage with their existing lender if it meant that they would face fewer checks and fewer questions.

Borrowers are clearly aware that there has been a shift in the way mortgage applications are being processed, even if they don’t fully understand the new requirements. They need more help than ever from advisers who can alleviate any fears or concerns they may have by explaining the process and ensuring that borrowers are only put forward for deals that are suitable for their specific circumstances. Advisers who have the right systems in place to do this, and can stay in tune with changing lender criteria, have an opportunity to win over consumer trust and confidence.

Outsourcing helps lenders keep a competitive advantage

Whilst the MMR is still bedding in, lenders need to continue to streamline and improve their processes. In addition to supporting compliance and easing administrative pain, outsourcing can also help lenders retain a competitive advantage. Third party administrators are in a position to undertake multiple roles dependent on the lender’s requirements. By outsourcing these processes, management teams are free to focus on improving and diversifying propositions and driving their business growth.

Outsourcing is more relevant than ever in today’s market, especially with these tighter regulatory rules. Selecting an outsourcer with the right experience can enable lenders to access improved technology, enhanced processes, market insight and operational expertise. This results in good practice so that lenders can focus on what they are there to do. Aside from the tangibles, it also comes with the assurance of predictable costs and leveraging a regulated servicer to deal with the ever shifting regulatory landscape.

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Target Group is one of the longest standing servicing and software providers, with over 35 years of experience across 50 major international financial institutions.