It’s wise to call clients home owners

About a week ago I conducted a telephone interview with Toni Moss in the US. Moss, who prefers to describe herself as a Texan rather than an American, is the driving force behind a pan-European conference on mortgage servicing called EuropeServicing. It will take place on April 28 and 29 at the British Film Institute in London.

I called Moss to talk about her plans for the conference and she confessed that she was struggling to know what to leave out of the discussion sessions. Some might say her fertile brain is too full of ideas.

This bodes well for the conference, where each section of the programme will be preced-ed by a clip from a major film. The films will introduce the themes that will be explored by a panel of industry experts.

But back to our conversation. Moss was wondering if she should introduce a debate about what is more honest – calling clients buying property with residential mortgages home owners or borrowers?

She said: “Why is it that the term home owner is used in the UK while in the US the term borrower is applied? Is it culturally determined or is it more significant than that?” Moss says that the US terminology is more accurate because the majority of home owners don’t own their homes and it’s the lenders who have the biggest stake.

In her opinion, the term home owner is misleading when it comes to the issue of defaults because it is lenders that lose out because it’s their money.

It’s an interesting question – does the terminology we use to describe our customers in part determine how we treat them?

In the US repossession is a lot easier to carry out than in the UK where borrowers are regarded as home owners.

True, it may be more honest to call our customers borrowers rather than home owners and make it that much easier for lenders to repossess properties.

But on the other hand it could also be argued that there’s wisdom in regarding borrowers as home owners because the industry will take lending and repossession decisions more responsibly as a result.

This may explain why the UK’s experience has been so different to the US one, particularly in sub-prime. There’s no equivalent here to what’s happening in Cleveland, Ohio and thank goodness for that.