Adoption of ane-commerce standardthat promises
tostreamline mortgage saleshas been put
on the back burner by mortgage brokers because of theturmoil in the market.
The XML standard, due for release next month, will let brokers
send mortgage applications to lenders without having to fill in
multiple application forms. It is also designed to help lenders
avoid risky
loans by alerting them to changes in mortgage rates
immediately.
But Richard Farr, director at the Association of Mortgage
Intermediaries (AMI), which represents 11,000 brokers and 30,000
independent mortgage advisers, said the slowdown in the mortgage
sector meant the standard was not a priority for AMI members.
"Mortgage intermediaries do not want to spend time and money
changing how they work at the moment," he said. "Standards will
continue to be developed, but the extreme market conditions are
putting this way down the priority list."
Lenders provided 64,000 mortgages for house purchases in March,
compared with 113,000 in the same period last year, the lowest
since comparable records began in 1999, according to the Bank of
England.
Katie Tucker, technical director at mortgage broker Charcol,
said the e-commerce standard would help lenders and brokers avoid
the problems caused by making risky loans, which have contributed
to the global credit crisis.
"Now more than ever the mortgage industry needs a system to pull
all of its communications together," she said.
Paul Pettitt, managing director at Origo, which developed the
standard, said mortgage intermediaries' need for business
processing standards was greater in the current market
conditions.
"As the market adjusts to conditions, it is vital that
efficiencies can be made with regards to getting products to
market," he said.
Bob McDowall, senior analyst at TowerGroup, said there would be
fewer companies offering fewer loans when the market recovers,
which could change the appetite for e-business standards. "The
mortgage industry will look very different and there will not be a
resumption of normal service," he said.
Clive Longbottom, service director at analyst firm
Quocirca, said the standard could be developed with additional
safeguards to prevent risky lending when the credit crunch is
over.
"If you have a model about how mortgages are put together, you
can use this to help them stick to the [lending] rules that come
out of the current crisis," he said.
Advantages of the standard
- XML standard can be used to add functionality into e-commerce
systems to streamline the mortgage application process
- Time and cost savings from reducing duplication of information
put into separate lender systems
- Fewer errors from information being keyed in multiple
times
- Once an application is confirmed as eligible for a mortgage,
that profile can be used by multiple lenders
- Standard will link lender and broker systems to enable
automatic updates when changes are made