Important changes to Fast Track

17/02/2010

As you know 'Fast Track' effectively enables an immediate decision at the point-of-sale for low-risk mainstream mortgage applicants.  In recent years this has facilitated a fast and convenient process for clean mortgage applications.

We do know however, of examples where the Fast Track processes have been abused. Some intermediaries and some lenders appear to have treated it as 'self-certification by other means', and this has driven the FSA's negative opinion of the Fast Track process. 

We fully recognise that we as lenders must take our responsibilities seriously, and balance the availability of Fast Track with maintaining the quality of loans written using this process. We need to be pro-active in looking for abuse and acting when we find it. We've proven that, when properly managed, Fast Track is not a driver of arrears or repossessions and we are pleased with how it has performed within our business.

It is because of this that we have made some changes so that we can continue to offer a Fast Track proposition while at the same time putting in place certain safeguards.

You will know that we carry out a monthly random sampling exercise as part of our independent quality assurance programme to monitor and report intermediary performance against control requirements. On the selection of a particular case, you are contacted by our Quality Assurance & Control Team and asked to provide Proof of Income and a copy of the signed declaration from the customer(s).

By ensuring we receive a response when we request validation of an application, we have been able to ensure the success of Fast Track. However, our experience has been that where we have requested the customer's Proof of Income (POI) and the declaration, they have not always been retained. 

It is important that we all recognise that, for Abbey and A&L Fast Track applications, Intermediaries are responsible for keeping a copy of the customer's file, including Proof of Income, for a minimum of 2 years from the completion date of the mortgage.

As a result and to allow us to continue with a Fast Track proposition, we are introducing a number of changes that will be implemented on failure to supply on request a copy of the customer's Proof of Income and the signed declaration.

From 1 March, our sampling will be sourced from transmissions within the previous month.

If you do not send back the POI, or if when we receive the POI it would have resulted in a case not being agreed, we will impose the following sanctions

• we will remove Fast Track from the individual intermediary
• we will not pay the proc fee for this case

Where an intermediary has been removed from Fast Track for 3 months, you can reapply for Fast Track by signing a document outlining that you understand and agree to follow the requirements. If there was to be a second failure then this will result you being restricted from submitting new business, without future appeal.

This is a strong message, however, we need to put in place certain safeguards, so that we can continue to offer a Fast Track proposition.