The arrival of automated sourcing systems could result in the bridging market becoming the next sub-prime space
As time moves on you quickly have to accept that you cannot halt progress.
The television I have in my front room certainly doesn’t look like the one I had when I was 10 and in fact, the mobile phone I had when I was 25 certainly doesn’t look like the one I own now.
To be honest, I don’t look like I did when I was 25 but it’s progression I was talking about, not decline.
Now I’m a big fan of making my life easier, but I simply don’t understand how a sourcing system for bridging is going to do that.
I agree that for mortgages and secured loans, where there is strict criteria and little room for manoeuvre in the decision making that sourcing systems have a place.
But for bridging, I just can’t see how this can work. You need to know your lender, you need to know what they have an appetite for, the areas they like to lend in, the areas where there are LTV and rate restrictions, you can’t import these details into a system you will only know this if you have strong relationships with your lenders, sourcing the right bridging lender isn’t easy !
Firstly, if you look at the Sourcing Systems that are currently trying to enter the market, you will see that they have been created by new entrants into the Bridging Industry trying to quickly establish a percentage of market share. Whilst I’m sure the techno’s amongst us think they are a great addition, I have my reservations.
If I had a tooth ache, I would visit my dentist, someone who I trusted and who specialises in the problem that I have. I wouldn’t dream of entering my ailment into a computer which would then come up with my diagnosis and then try to remedy the situation myself.
If you come across a potential bridging deal, my advice would be to pick up the phone to someone who specialises in that field, has years of experience , who can diagnose the issue and deal with it in an appropriate manner thus bringing satisfaction to the client.
One of my major concerns at this moment in time is inexperienced brokers entering our market space and trying to place a bridging deal by themselves, a lot of cases need the help of experienced bridging personnel especially when the client is up against deadlines.
This is when the assistance of an expert is needed who will advise you where to place the deal, there are too many stories of clients being placed with the wrong lender and having their time and sometimes money wasted.
The market has changed dramatically in the last twelve months and the Industry should be wary that with the demise of the first and second charge mortgage market that bridging doesn’t become the new sub-prime space.
We need to be wary that just because someone is desperate to raise funds and they can’t prove their income it doesn’t automatically mean they should get a bridge.
Brokers need to be educated in what a bridge actually is. There are many reasons why bridging should be used and the brokers need educating so they do not miss the huge opportunities that are out there.
Some lenders have understandably welcomed the fact that the sourcing systems have arrived.
But I wonder if they will still happy once they have been swamped by brokers who don’t know how to present a bridging proposition let alone know what one is.
I know of one certain lender who has numerous brokers giving them deals on a daily basis and complains that these same brokers do not have an understanding of the industry and end up wasting the customer’s time with their inexperience.
It would also be interesting to find out how brokers are directed to certain lenders, is it by rate, LTV or is it that the commercials are more attractive, who knows? Well they do, I wonder if the sourcing systems are treating customers fairly?
However, I should stop being cynical as some may say that as I am indeed a bridging packager, I see them as a threat to my business.
All I’d say is the last time I tried to extract one of my own teeth, it left a nasty mess.