The way in which high-risk mortgage borrowers are being assessed has highlighted a divide in opinion between two UK sub-prime mortgage lenders. Kensington mortgages and newcomers to the sub-prime market Edeus are apparently at odds over the process.
Kensington mortgages argue that the increasing automation of the underwriting process could leave some prospective homebuyers without a mortgage deal. Edeus, who are a technology-oriented lender, disagree. They believe that online processes are more reliable and more likely to deliver a better consistency.
e-commerce has undoubtedly become a major part of most mortgage companies business. Since the beginning of this year, untold amounts of money have been spent on the online presences of mortgage lenders, each seeking to make their mortgage application process smoother. But, Kensington say that too much technology might not be positive.
Alex Hammond, the public relations manager at Kensington, said: "E-commerce systems undoubtedly improve speed and efficiency, but there is a very real danger that some specialist lenders may be becoming too blinkered in their approach to technology at the expense of human involvement in the underwriting process."
Hammond poses the question: what of the borrowers who do not fit the computer-based criteria? He argues that this rigidity undermines the reasons for the development of the sub-prime market.
Sub-prime mortgage lenders disagree
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Sub-prime mortgage lenders disagree
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