Guest blog: driving efficiencies in the mortgage market

Guest blog from Michael Power, RBS Legal, Head of Mortgages – P&BB, Royal Bank of Scotland.

One of the key developments we’re working on as part of our business transformation is an electronic discharge service. Our user experience panel has been a significant resource for us as we have sought to design our new products and services that are tailored towards our customers’ needs.

As part of our user experience panel RBS’ Michael Power highlights the potential benefits of a digital discharge process to the mortgage market in Scotland and beyond.

For most of us our mortgage is the biggest financial commitment that we will enter into during our lifetime. When we are fortunate enough to have paid off our mortgage we obviously may want to focus our financial resources elsewhere, be that towards repaying a loan with a new lender or towards something else. Obviously lenders wish to have a positive relationship with their borrowers where the needs of borrowers can be met in a simple and easy way for borrowers and this includes where they are redeeming their mortgage.

As the competitive re-mortgage market continues to grow many more customers are taking the option to move lenders when their fixed or tracker rate ends. With the advent of greater technology, customers have rightly come to expect that redeeming their mortgage and moving their mortgage to a new lender will be as easy and quick a process as possible.

I think many people involved in the conveyancing process will have, however, seen instances where the current paper based system has led to delays in transactions.

Once a borrower has paid off their mortgage they often struggle to understand why they need to go through the sometimes time consuming process of arranging for a paper based discharge to be drawn up and registered. An efficient digital discharge process will undoubtedly help to address this difficulty and will likely drive efficiencies in the mortgage market.

Lenders who offer mortgages across jurisdictions will have seen that electronic discharges have worked effectively in England and Wales for a number of years. The key benefits being efficiency, simplicity and fraud prevention are benefits for customers, solicitors and lenders. A move to introduce a similar system in Scotland will bring a level of consistency to the process throughout Great Britain and will help lenders to provide an even more efficient service to customers whether they are redeeming, re-mortgaging or purchasing.

I think that we can all agree that developments in registration that make things better for solicitors, lenders and most importantly borrowers must surely be a step in the right direction.

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