HSBC – Stop It, My Sides Hurt…
18th October 2011
Apparently, and, (said in the style of Theresa May), I am not making this up, HSBC have said that “HSBC accepts around nine in 10 of all customers who apply for a mortgage with the bank”.
Ha ha ha ha ha ha ha ha ha ha ha ha ha ha, (stop it, ha, my, ha, sides hurt, ha).
Actually maybe that’s a little disingenuous, as to be fair at least they are giving the impression of supporting the average mortgage borrower and their rates have been consistently attractive. However, in making this comment whilst trying to put the proverbial boot in to mortgage brokers who they clearly see as an irritant, (who needs independent advice pah, advice is for wimps), they are opening themselves up to closer inspection.
So, if 9 out of 10 people who go through their door genuinely go on to get a mortgage offer then that is brilliant. It is so brilliant because it means that there is no mortgage issue at all and I would urge everyone who needs a mortgage, first-time buyers, foreign nationals, the self-employed, those at high loan-to-values, those whose income is from multiple sources, who need a guarantor, who may have a little credit blip, who are on a Visa, who need to stretch beyond the published 4.5 times income multiples, etc, to get down to a branch pronto before the queues get too long. You get my drift.
I have no issue with the fact that HSBC do not deal with brokers, seriously I don’t. Of course I would love them to and even sent a cheeky email to them recently asking them for a pilot, but I don’t like the fact that a 1st time buyer or anytime buyer for that matter, can take out the biggest debt they are ever going to have without getting any advice.
I also have an issue with blind stats like 9 out of 10 blah blah. The reality is probably this :-
“Of the people we see that come through our door for a mortgage, who, after speaking to our mortgage “specialist” to confirm they fit our published mortgage criteria and can demonstrate their affordability and have a clean credit score, who we then allow to actually complete a mortgage application form, around 9 out of 10 receive an offer, perhaps not the exact offer they asked for, but an offer nonetheless.”
In truth, that is still pretty good given the market at the moment, but to give a blurred message without the full explanation when criticising others, is perhaps a little off.
So, dear HSBC, what percentage of the people who walk through the door, go online or phone up wanting a mortgage actually get the mortgage offer they asked for? I do not believe it is 90% – sorry, I just don’t. Also, how many clients accept that offer and go on to complete?
If it is true then why do, as the very wise Ben Thompson, managing director at Legal & General mortgage club, said: “…direct to consumer only mortgage products make up just 19% of all the mortgage products available in the UK and HSBC’s direct only offering represents 2% of this direct only market.”
The statement from HSBC also said that “The bank’s strategy is that it believes it is best placed to sell its own mortgages” (fair point) … “and that lender and borrower need to deal with each other during the sale process to make the best lending and borrowing decisions.” (Well, if the lender is providing independent advice then ok, but what if the best option for the borrower is a 3 year fix and the lender only has a 2 or a 5 year?).
Even more intriguingly, Peter Dockar, head of mortgages at HSBC, said: “Mortgage customers used to rely on brokers for the best deals but this is no longer the case”.
Unfortunately this shows a misunderstanding of what brokers do. There have always been direct lenders who sometimes offer the “cheapest” headline rates, (when I started it was always Britannia). Then the pendulum swung to brokers because lenders needed the volume and quality they provided, but that is still not the point.
The point is that mortgage customers have always relied on brokers to obtain the right deal for their circumstances.
If it was just always about the lowest headline rate, well then you don’t need me. Don’t worry about the fees, penalties, flexibility, portability, suitability, potential lifestyle changes, timescale, deadlines, service etc..
In fact, if HSBC really offer a mortgage to 9 out of 10 who walk through the door, within the required timescale to secure the property, then I humbly apologise and well, to be honest you don’t need me either then.
Anyway, never mind that I’m off there now to remortgage my 90% interest only loan…er, sorry, what do you mean 2 years full accounts…?
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.