Good mortgage clubs help the industry do business better

Mortgage Clubs are important players in the sector and none more so than the Legal & General Mortgage Club, now in its 25th year and involved in nearly 1 in 5 mortgages arranged in the UK. Danny Belton, Head of Lender Relationships, describes how Clubs’ roles have changed in the last few years and what we can expect to see from them in the future

Danny Belton is Head of lender Relationships at the Legal & General Mortgage Club. Over his 23 year career with the distributor, he has been an integral part in the
development of the proposition that supports both brokers and lenders in providing better outcomes through products, criteria, education, and more recently technology.

In the last five years alone the role of mortgage clubs has changed significantly. Shifts in the support and resources they provide to intermediaries and panellists have been driven by changing consumer and regulatory demands and, of course, Covid-19 has also played a transformative role in how we ensure effective communication between lenders and intermediaries. However, significant changes still lay ahead. So, in which key areas will mortgage club’s help support the success of the mortgage sector?

The Coronavirus crisis has shown us the importance of implementing technology to improve stakeholder communication and reduce operationalinefficiencies. Supporting advisers and lenders to adopt new technologies is therefore a key area where mortgage clubs add value to their members. A key example can be found in sourcing. Our latest tool, SmartrFit, combines the power of our lender sourcing technology and an in-built affordability calculator to help advisers more quickly and accurately determine suitable providers for their clients. This has brought about efficiencies to both lenders and advisers by improving the accuracy of case packaging and reducing instances where cases are rejected due to failed criteria. Historically, there has been resistance to technology in the mortgage sector, with some fearing the potential for disintermediation. However, mortgage clubs should be focused on developing digital resources which help advisers do their jobs more effectively, not finding ways to replace them.

Another area where mortgage clubs can add value to members is through support with changing regulation and compliance. In recent years, we have seen the introduction of GDPR, EWS1 forms and new guidance from the regulator relating to the residential, later life and buy-to-let markets. It seems there is new guidance out every month and there are also now so many different advice areas that it can be more difficult for advisers to be experts in them all. That is where the support and educational resources provided by a mortgage club become paramount. Having a wide range of timely and relevant learning opportunities for members can help them get to grips with the latest industry developments. This has been especially important through the crisis, but it will remain critical for years to come.

Helping to spread awareness of the benefits advisers can bring to borrowers remains a core objective for mortgage clubs. At Legal & General Mortgage Club, we have long been campaigners of the value of independent mortgage advice and have conducted extensive work into this area to help dispel misconceptions and understand the views of borrowers when it comes to accessing mortgages. Most recently, we uncovered that borrowers who had been negatively financially impacted by the crisis could see their annual mortgage repayments increase by as much as £2,500 if they fail to remortgage onto a new product. Promoting these pitfalls and the opportunities for advisers to help will continue to be a key part of how mortgage clubs underpin intermediary business volumes.

The role of the mortgage club will undoubtedly continue to change over the coming years. However, the principal objectives will always remain. It is about finding ways to help promote the good work of advisers and lenders, while also helping to develop resources that help them carry out their everyday services in the most effective ways.