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Master brokers praise MCD after conversion rates boost


Master brokers praise MCD after conversion rates boost

Master brokers have reported that the implementation of the Mortgage Credit Directive (MCD) has resulted in a better application to completion conversion rate.

Loan Talk reported last week that Enterprise Finance had seen an uplift of around 20% to over 60% in the conversion rates of applications to completed deals since MCD was brought in.

Now Loan Talk has been told by other second charge master brokers that they too are seeing a similar trend, with Rob Derry, managing director of Brunel Mortgages & Loans, reporting that MCD had resulted in a drop in processing times.

“There is a small counter-effect in that affordability is tighter, but once an application is assessed against affordability, the process is much quicker and more applications are going on to complete.

“I think the biggest single impact has been the change in the process so that seconds now mirror firsts so the application flows better than under the old CCA process.”

Paul Day, sales director at Clever Lending, also reported a growth in completions and felt MCD had increased awareness of the second charge mortgages.

“With it came not only increased enquiries, but more completions as brokers and their clients started to understand the benefits of secure lending. 

"We were always going to see, as we predicted, business levels almost replicating the heartbeat graph with the huge peak followed by a trough, but what has followed is another period of growth.  

“This growth is clearly mortgage advisers entering a space that they previously ignored – second charge mortgages.”

Tony Marshall, managing director Equifinance, said that niche lenders such as itself had benefitted from MCD and had seen increased conversion rates.

“It has allowed specialist lenders to review their business models resulting in improved processes, faster, more accurate loan decisions and opened up new avenues for broker distribution. 

“There has also been an increase in understanding the benefits of second charges across the credit profile spectrum and pointed the way to real alternatives for customers and new opportunities for lenders and brokers. 

“We have also seen applications [from] a more diverse range of client and, as we assess each case individually, this alongside better systems, has resulted in more business being written for clients who otherwise may not have been given access to the financial products they need."

Paul added that MCD had been the catalyst for technical development and sourcing systems being introduced to help brokers compare remortgages and second charges.

“We’re seeing these products being considered side by side and in our opinion, more customers are taking the second charge route than before MCD. 

“This is good news for all involved as it helps the client receive the most appropriate product for their needs, whatever their credit profile." 





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