CONCERNED that it takes much too long to process mortgage applications, president of the Realtors Association of Jamaica (RAJ) Gabrielle Gilpin-Hudson has floated the idea of panning poor-performing banks and awarding those that are efficient.

“The regulatory environment for banks and financial institutions has gotten very, very intense; the volumes have gotten very intense and what goes into underwriting a mortgage has gotten very intense. For the most part, we have not done the work needed to put the right things in place for us to deal with these things efficiently,” Gilpin-Hudson chided during a recent RAJ session that looked at legal reform in real estate.

“The mortgage process is very lengthy and unwieldy, and takes a lot of follow-up. It’s not until we start naming and celebrating and shaming the banks that we’re going to really see them start to move,” she added.

Speaking from personal experience as a realtor and attorney, Gilpin-Hudson argued that purchasers, real estate practitioners, and lawyers are the ones most adversely impacted by inefficiencies now plaguing the process. Lawyers and realtors are not paid until a property transaction is completed. The goal is 120 days for a purchase being made using a mortgage.

According to Gilpin-Hudson, the RAJ has sought and received help from the Private Sector Organisation of Jamaica (PSOJ) in identifying solutions to the worrying issue of lengthy processing times for mortgages. The result was a sit-down with representatives from RAJ, the Jamaica Bar Association’s conveyancing committee which handles property transactions, the Jamaica Bankers Association, and the National Housing Trust (NHT).

During that meeting, said Gilpin-Hudson, banks pointed to delays attributed to clients. For example, in the middle of the approval process some clients make financial decisions that affect their credit score — such as making a major purchase. They are also sometimes tardy in taking action needed to move the transaction along, slow to complete paperwork, and generally sluggish in responding to requests. The comments are in line with those reported in the July 13 and 20 issues of the Sunday Observer in which Victoria Mutual Property Services CEO Allison Morgan outlined common errors that can derail a mortgage application.

During her presentation Gilpin-Hudson noted that inbuilt glitches in the communication channels between realtors and banks are also an issue.

“Banks are bound by confidentiality, so sometimes the loan officer cannot tell you what is really holding up the loan…All of these things hold up the mortgage process, and the bank is not allowed to share that information with us,” the RAJ president said.

However, Gilpin-Hudson was harshly critical of bankers, who she believes are simply not pushing hard enough. She said during the PSOJ-facilitated meeting one banker suggested that 120 days to complete a sales agreement was unrealistic and that realtors should not tell clients it is an achievable goal.

“[That], for me, just wasn’t acceptable because, in my mind, if Jamaica wants to compete seriously in real estate we cannot be going in that direction. That’s the wrong direction to go, to say we need more time. We need to be able to deal with it more efficiently,” she insisted.

The RAJ president urged members to select mortgage officers carefully, citing a recent sale that took her 10 months to close.

“This is why it’s so important for you to have your mortgage officers that you know and have confidence in referring people to, because that makes or breaks your mortgage transaction and [impacts] how long it will take to close,” said Gilpin-Hudson.

“I’ve even had a cash sale where I’m selling to a purchaser for cash but the seller has a mortgage on his property, and no matter what I do I cannot get the mortgage company that has the mortgage on the property to give me the information to take the mortgage off so that I can finish the cash sale. So, the banks are really holding us up,” she added, her voice heavy with frustration.

Convinced that banks are “not interested in changing”, she believes the solution rests in a carrot-and-stick approach. The idea being mulled includes making it a competition, and awarding the bank that is most efficient. However, that would require behavioural change within the RAJ.

To identify good- and poor-performing banks, the association would need to mine information from the Multiple Listing Service (MLS) — a property database available to its members.

“So just a heads-up that we will be looking at focusing more on the mortgage information in MLS,” Gilpin-Hudson told her peers.

“I’m imploring everybody to put in that data. The fields are not currently mandatory but we are giving serious consideration to making those fields mandatory. I’ve heard the argument that some persons want that information to not be on the system because it’s private but at the end of the day, it’s on the title so it’s not private. It will help the industry if we can understand and better track the days on the market,” she added.

On a related issue she appealed to realtors to make timely updates to the MLS, promptly removing listings that have been completed.

“A lot of us have listings on the system and we’re not updating the status of the listings in time, and effectively. These things mash up the data. So, if we want good data and want to sound smart about what we’re doing, and know what’s going on in the market, people need to update the thing and stop having it there when it closed months ago,” she urged.

“That’s something that I really am asking persons to do. I would prefer to ask you guys to do that and be careful with it than to have to now look at putting penalties and fines on that — but that is the direction we’re going to have to head into if persons do not start putting in the information, because we need it,” Gilpin-Hudson added.

GILPIN-HUDSON…it’s so important for you to have your mortgage officers that you know and have confidence in referring people to