from a bdM point of view, the days gone where it was easier to place a bridge. now it’s educating brokers to understand that. they’ve got to be providing a lot more information up front because lenders are a bit savvier from the underwriter’s approach. it’s probably no secret that we have one of the most stringent underwriting programmes in the industry but it’s probably a testament to the fact that bridgebank hasn’t had a default in three years. bridging is a different kettle of fish, but as long as brokers understand that information has to be provided for the reasons we’ve discussed, service levels do not drop because you’ve managed service levels from day one.
From a lender’s perspective, are brokers stepping up to that challenge and providing all that information you need?
GB: Some people specialise in bridging. You’ve got a very wide market: the introducers to packagers, who are still being educated in it probably still find it a little difficult. they think it’s some sort of urban myth that bridging is complicated but it’s not really. the basics behind it are the same. brokers are becoming more educated and the sales teams are becoming more educated. the lenders have evolved as well in that period as well. We know the questions to ask to sort the weak from the chaff. MS: there’s no doubt about it, bridging is part of the product suite of many more brokers than two or three years ago. it is incumbent on
lenders and specialist introducers to educate and set expectations for those introducers who aren’t as familiar with bridging.
Loan to values in bridging tend to be up to around the 60% mark because of the risk involved although some lenders will go further up the curve. How sensible is this and will we see more high LTV loans as providers are forced to compete?
MS: it’s all down to the exit. if a lender does choose to go above 60% LtV then if the exit is right then fine, i think that there’s sensible lending above 60% LtV. the danger is with more and more lenders entering, do you get what you see in the sub-prime market moving up and up? i don’t think the main lenders will go down that route. they’re sensible enough to see where their market is. MG: there is a fundamental difference now. Previously every transaction was lost in a bigger
picture because lending had a value and the securitisation was the endgame. in bridging the value is in each transaction. if each transaction doesn’t make sense then it’s not going to happen. GL: ultimately LtVs in the short- term market will be governed by the take out and the availability of take out and provided that you were due diligent on a case then why can’t you lend at 75%?
Isn’t this the point though that the sub-prime market moved with the times and while securitisation isn’t currently an option that’s not to say that sometime in the future it won’t come back?
GL: the lending profile and the book in short-term lending is a small amount of money compared to the rest of the mortgage world. You’re not turning around and writing a loan book to then sell it on to someone else or move it elsewhere so the recourse is for
with our Decisive Bridging solutions
www.mortgageintroducer.com
www.blemaingroup.co.uk bridging intrOducer MAY 2012 25
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