ANZ’s fresh cuts for variable rate borrowers might not deliver the market share gains that chief executive Shayne Elliott is so desperate to achieve because waiting times for loan assessments appear to be blowing out again.
While ANZ started to improve average turnaround times on loan applications in late August and September, a memo issued to brokers on Monday confirmed that the bank’s already clogged mortgage pipeline has come under further pressure in recent weeks.
In the middle of September the bank was taking six business days to complete assessments on loan applications from pay-as-you-go income earners requiring no mortgage insurance and 12 business days for applicants needing LMI.
The average wait was 22 business days for borrowers with “complex” profiles such as owner builders, applicants with foreign sources of income and those relying on guarantors.
However, according to the latest notification from the bank (issued on 8 November), borrowers not requiring LMI now have to wait eight business days for assessments, while the average time to process applications from low deposit home buyers has blown out to almost 4 weeks (18 business days).
So-called “complex” borrowers are being asked to wait five and a half weeks (27 business days).
It is no secret in the broking industry that ANZ’s turnaround performance on applications compares unfavourably against lenders growing market share such as Macquarie and Bendigo Bank.
These lenders have taken on average less than a week to assess applications throughout 2021.
ANZ’s new cut to its basic variable rate home loan puts its pricing on a par (at 2.29 per cent) with CBA and NAB for borrowers with large deposits, but experts believe brokers are likely to bypass the offer because of the assessment delays.
“Any delay in getting final assessment beyond 12 or 13 business days will make it difficult to settle the mortgage within the legally required contract period,” said Canstar director, Steve Mickenbecker.
“The extended delay through to approval of the finance puts lenders in a position where their offer is only viable in the refinance market.”
At the announcement of ANZ’s full year profit in late October, Elliott said he was throwing more people and technology at fixing the mortgage processing problems.
“Our problem is not that people don’t want to borrow from us,” Elliott said on 29 October.
“The branches are working well and our application processes in branches match our peers.
“The problem is in broker and the manual assessment of applications. These things take time to fix.”
While many bank analysts have cited the bank’s declining position in the mortgage market as a drag on the share price, several have also noted that it could emerge as a disguised blessing in the next few years as borrowers who purchased homes at the peak of the property cycle are tested by higher rates.