round-table
at a transaction where a client wants a period of time to turn around and sell that property on. they’re not fire selling the property, they’re actually pulling the equity out of the property rather than a lender repossessing it and turning it away. but you couldn’t do that if they’re telling you they’re refinancing it on a product that doesn’t exist from a lender that’s never been heard. It’s all common sense. Kevin: credit scoring and credit checking are two completely different things and high street lenders don’t all credit score so I think it’s a
So you look at everything that forms that transaction, the rationale behind the loan, you look at the property you’re taking into security and obviously you look at the exit and that’s how you build your picture. You do look at the credit search
and build your profile of the client and the comfort to do that lend. If somebody is going to exit with a refinance and their credit is shot to bits, then obviously you’re not going to do the deal unless they provide you with evidence and that evidence has to be hard evidence. but there is a route to do adverse orientated lending if you’re looking
misnomer. credit checking is valid and quite right. It can be when it goes on credit score it’ll depend on when the lender changes the credit score to and that’s a different question altogether and even the exit strategy can be with a non- credit scoring high street lender. AC: With all lenders it will depend on how the exiting lenders are acting. So if the two lenders are bM Solutions and the Mortgage Works and they both credit score, you have to have views about that. If the market gets better where properties sell more quickly the exit via sale becomes a much more palatable route. If other lenders come into the
TIUTA 26 brIDgIng IntroDucer september 2011
market that don’t credit check, then you can take a view on that. We have to constantly look at how the exit is moving and how realistic it is. GL: If more lenders are refinancing within shorter periods of time, if loan to values go up on your mainstream finance, then it allows you to be more hospitable to those cases which are higher LtV or more problematic. You’re gaining confidence from market forces on how you’re going to be paid.
Are there any common errors that brokers make with bridging clients and how can they be avoided?
GL: even experienced brokers don’t provide all the information they should. As a lender you want to see everything and some inexperienced brokers try and judge what lenders want to see when lenders want to see everything. We don’t want to have to work on a need to know basis, we want to see everything so we can formulate a picture. SK: We get that when we have brokers coming to us and we package a deal with them but they’re not upfront with the information. It all comes out in the end but it’s not always provided at the first stage. CS: that can cost the customer. Daniel Churchill: A lot of brokers do think that because it’s a bridging loan, they don’t have to give you all that information. SK: It’s exactly the opposite, if it’s a bridging loan you want exactly the same information because it’s based on the exit, so you’d want exactly the same information you’d want from a normal residential loan. LG: the problem with our sector
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