Too Much Too Young
Deutsche Bank who launched DB Mo
rtgages in April and looked like they were going to become a major force in the UK ’specialist mortgage’ market are said to be suffering from major service problems.
Best Advice reports
“BestAdvice.net has been informed that Deutsche Bank’s lender db mortgages is suffering “major” service problems just four months after launch - with packagers stating db had a 10-day backlog on cases.
Packagers have informed BestAdvice.net that db was taking around three days just to look at the AIPs (agreements in principle). It is understood db has withdrawn its fixed rates and re-priced its tracker deals to effectively “price itself out of the market” to help get service back on-track.
One packager said: “When you look at the current product range compared to the previous one, rates are typically 1% higher, so it seems they were trying to price themselves out.”
The packager said the underlying problem was due to db’s online decisioning system where the AIPs were being referred to the underwriters, rather than creating instant decisions. He said he was aware improvements have now been made to the lender’s online system where more instant decisions are now being created.
Bill Dudgeon, managing director of db mortgages, said: “We did withdraw the fixed rate, which was the main reason for the service blip. We found it was a market-leader, so a higher number of applications were coming in. We now have a three-day backlog, therefore getting from application to offer is taking about five days in total at the moment. With some packagers, there could have been a 10-day backlog, but only on certain individual cases. “
In January Deutsche Bank announced the recruitment of a mortgage lending team to develop “db mortgages” to offer sub prime, buy-to-let and self-certification mortgages in the UK. The team led by Bill Dudgeon all came from The Mortgage Business plc (TMB), a subsidiary of HBOS.
Only last month Deutsche Bank issued a press release saying it had commenced a broader rollout to the full packager market by increasing distribution from three to twenty packagers.
To quote from that press release
“In April 2006, db mortgages commenced a pilot scheme with three packagers to ensure that their systems and telephony were tested in a live environment. The broader rollout with the 20 registered packagers is the start of second phase of db mortgages’ expansion into the packager market.”
