New technology being backed by the Independent Mortgage Advisers Federation (IMAF) could cut the time it takes brokers to secure approval for a mortgage to as little as 90 seconds, according to the company distributing the system.
Known as Mortgage Brain, the desktop technology allows brokers to find out which lenders will approve a particular borrower for a certain type and size of mortgage.
Under the current paper-based process, approvals can take more than five days, depending on the efficiency of the lender's response to the mortgage broker's application on behalf of a borrower.
Mortgage Brain, currently used by 18,000 brokers in the UK, will be rolled out to IMAF's 70 members by the end of February and will be available to all 1,151 mortgage intermediaries by the end of 2004.
However, the system will not be fully up and running until lenders agree to be connected to the technology through a link called the mortgage trading exchange, which will allow mortgage brokers to send loan applications electronically to the lender.
For the moment, brokers will have to print off application forms once they have used the system to select a mortgage product.
Mr Michael Dowling, IMAF president, said he expected that all lenders would eventually sign up to the system.
Two lenders, Bank of Ireland and Permanent TSB, are already in discussion with MBL Ireland, the sole distributor of the product in the State, about linking their approval systems to Mortgage Brain.
But he added that it suited some lenders to keep mortgage approvals paper-based, as it prevented brokers from speeding up the "shopping around" process they perform on behalf of borrowers. "There is resistance from the lenders. They don't want the competition working as quickly as this," he said.
But he said the system would bring savings to lenders, because brokers not lenders would input applicants' personal data.
When fully operational, the technology could increase the attractiveness of approaching an independent mortgage adviser who acts on behalf of a range of lenders. At the moment, a comparatively low number of borrowers in the Republic use intermediaries to source their mortgage.
Some 60 per cent go to a bank or building society directly, compared to around 35 per cent in the UK and just 15 per cent in the US.
The introduction of the broker technology coincides with new rules for intermediaries on the disclosure of commissions paid by lenders.
Since December 15th, 2003, brokers are required by the Irish Financial Services Regulatory Authority to state the lenders for which they hold an agency and the percentage commission they receive from each lender in a four-page "terms of business" letter.
This must be signed by the consumer before any advice can be given. The value of the commission the lender will receive for a particular loan must then be noted on the mortgage quote document handed to the borrower.
