Commonwealth Bank has hired about 400 new staff and has told AAP its workers are doing thousands of hours of overtime to keep up with loan requests.
“The exponential growth in home loan application volumes has placed considerable pressure on our support teams and operations,” the CBA said in a statement.
The bank says it’s kept pre-approval times down to two days over the last three months but some more complicated applications are taking longer.
And it’s not alone. Fellow ‘Big Four’ member ANZ says increases in response times have been as true for itself as for most major lenders.
“ANZ continues to increase its processing capacity through a combination of actions including increasing the number of skilled assessors to ensure strong overall coverage across assessment types and upskilling more assessors to review complex deals to reduce turnaround times for these applications,” it said on Saturday.
It also intends progressing its home loan automation agenda.
Meanwhile two property industry veterans say pre-approval delays of more than two weeks are seeing buyers miss out.
Jellis Craig Stonnington Managing Director Andy McCann told AAP he believes the banks are under-resourced to deal with the volume of would-be buyers.
“You do feel for customers who are going to miss out on their dream home because the banks are dragging their heels,” he said.
He says delays have led to subject-to-finance deals falling through and would-be buyers being unable to bid at auction.
He says “subject to finance” offers would normally be processed in 3-7 days by lenders but now that time frame is considered unreasonable and vendors would need to allow up to two weeks.
“When customers suffer unnecessarily, something needs to change,” he said.
Earlier in April, executives from the big four banks were grilled by a House of Representatives economics committee about mortgage approval times, after the federal government delayed plans to scrap responsible lending laws recommended by the banking royal commission.
The president of the Real Estate Buyers Agents Association of Australia Cate Bakos told AAP pre-approval delays are “painful,” and agreed sales have fallen over at the last minute.
“It’s really hard for us, you can be hanging by a thread … it’s very stressful,” she said.
“We can put in a two or three week finance clause and we are still scrambling for extra days,” she said.
ANZ said on Saturday where it had not met customer’s expectations, it apologised.
“We have processes in place to help escalate time critical applications (mostly for purchase transactions) in a bid to avoid this very scenario, so we would welcome a conversation with the customers or their broker.
“We encourage all customers to get their applications in as soon as they can so we can help them with their finances as soon as possible.”
By Liz Hobday