Precise Mortgages

Our launch of joint legal representation has caused a stir in the bridging market.

Most bridging loans are completed under separate legal representation where borrowers and lenders use different solicitors for conveyancing.This can create delays and increase the cost to the borrower and I can’t figure out why lenders inflict it on customers.

The Solicitors Regulation Authority code, which came into force in October 2011, is principles and outcomes-based rather than having prescriptive requirements. It includes examples of indicative behaviours, which tends to indicate compliance with the requirements.

The onus is on the appointed solicitor to be satisfied that they can act on a joint representation basis in view of the requirements of the code, and our solicitors have confirmed this to be the case.
We should not forget that residential bridging loans are secured against residential properties and most of the market operates on a joint legal representation basis.

Some lenders would have you believe that bridging is a mystical art that can be practised only by the chosen few, but that is not the case – bridging loans are like any other loan secured on property.
We are starting to see cases complete using joint legal representation and, as expected, the amount of hassle, time and cost for borrowers has reduced.

To paraphrase Peter Kay’s famous line in the television show Phoenix Nights, joint legal representation is like garlic bread – it’s the future.

Last week I had a call to my mobile from a company that claimed it was authorised by the Ministry of Justice to get me compensation for the payment protection insurance policies I had been mis-sold on my credit cards.

When I asked the caller how he knew I had a credit card he glibly asked: “Well do you?”.

When I said I was not interested he replied: “What are you not interested in? I haven’t told you anything yet.”

At that point I politely told him where he could stick his compensation and hung up.

Only two weeks ago I heard a fellow traveller on the train getting equally annoyed with what sounded like a similar cold call.

These people who are claiming to help people are flouting every rule in the book and it is time the Ministry of Justice clamped down on this menace once and for all.

I have no doubt these firms are charging fees and I hope this tawdry practice is not allowed to flourish in the mortgage market. With all the protection there is for consumers I wonder how long it will be before the authorities end this unauthorised practice.

Click here to vote for Precise Mortgages…your favourite Bridging lender.

A couple of weeks ago I wrote in my column about the inconsistency in the way bridging lenders calculate interest payments which could end up costing borrowers thousands of pounds.
Shortly after publication I was at a meeting with a number of trade bodies interested in the bridging market and it was clear that now the issue has been raised we will get some consistency.
But in the meantime my advice to brokers is to compare the total amount repayable as this is the only reliable way to ensure you get customers the best deal. The last thing a broker or lender needs is an unhappy customer.

I am pushing for more transparency in the bridging market so that brokers and borrowers know how much is being charged so that they can make an informed decision when choosing which lender to go with. Not only is this important in terms of how interest is calculated on retained interest but also with regard to arrangement and other fees.

We charge the arrangement fee against the net loan, in other words the amount the customer has asked to borrow. Many lenders charge fees on the gross loan, which is the amount the customer wants to borrow plus retained interest and other fees. Another thing to look out for is when the borrower repays early whether the lender refunds the interest charged upfront on the retained interest.