Banks are scrambling to clear a growing backlog of home loan applications ahead of the summer holiday period and are warning mortgage brokers to expect processing delays until the middle of January.
Macquarie and National Australia Bank notified brokers on Monday that they had been flooded with loan applications in recent weeks, which meant they were likely to encounter problems meeting normal approval and settlement times beyond New Year.
To help clear the logjam of applications, NAB told brokers that it had tweaked its process for handling complex applications that required funding for more than A$5 million or involved more than one commercial borrower.
“With the Christmas and New Year period fast approaching, we are currently experiencing a high volume of applications,” the bank’s head of partnerships told brokers in a note.
“This is causing delays in our normal processing times and we thank you for your patience.
“To improve our current service levels and deliver a more consistent experience for you and your customers, we have streamlined our NAB Commercial Broker (NCB) home loan application process for ‘complex’ home loan transactions.”
Macquarie, which is widely recognised as having one of the most efficient mortgage processing platforms in the country, has also flagged delays handling applications and settlements in the coming month.
“Over the next two weeks, our teams will be working hard to support all loan settlements during this time,” Macquarie told brokers in a memo.
“If you experience a delay in a refinance settlement being pushed out past Christmas due to our reliance on the outgoing lender, please be assured we’ll work with that lender to book the first available time.”
Macquarie has increased the time it expects to take processing applications from new clients.
According to the note issued on Monday, Macquarie now requires up to twelve hours to pick up files submitted by brokers and 24 hours to make assessments.
In its previous update to brokers on 7 December, Macquarie said it was picking up submitted files within four hours and undertaking assessments within eight hours.The notifications from Macquarie and NAB provide anecdotal evidence that demand for residential mortgage funding has accelerated since October when property buyers secured a record $22.7 billion in new home finance.
Moreover, the refinancing boom triggered by the declining rate cycle is magnifying the pressure on back offices of leading lenders.
According to the Australian Bureau of Statistics around $20.5 billion worth of mortgages were refinanced in October.
The ABS data indicates that more than a third of the refinance market relates to “internal refinancings” where borrowers switch to another mortgage product offered by their existing lender.