The lending landscape has now stabilised somewhat.
Myles Williams is CEO at First 4 Bridging
It’s something of an understatement to say that the past few weeks have proved to be a testing time for all firms across the mortgage market. As a specialist distributor, we have had to adapt our internal working practices and undertake extensive reviews of all lending options for our clients.
The lending landscape has now stabilised somewhat. However, getting to grips with the scale of changes to policy, products, criteria and the capacity to transact business over this period has proved to be a major challenge.
This review process has been exhaustive and extensive, although it has offered a real insight into how a raft of lenders have handled these conditions.
In fairness, lenders have had a huge amount on their plate and had to adapt business plans, models and how they service client needs overnight.
This isn’t easy and the vast majority have acted in a highly professional manner during this period, but there are some which have fallen below the acceptable standards and these actions – both good and bad - will not be forgotten in many quarters moving forward.
The good
Transparency, strength of proposition and quick, decisive decision-making processes have been the key to continued good lending practice. By strength, I don’t necessarily mean ploughing on regardless.
Some of the strongest decisions have been made by lenders who informed the market that they need to take a step back because they were/are temporarily struggling with logistics, funding, pricing and a lack of physical valuations.
Such decisions are fully acceptable provided they are upfront with their intermediary partners, working hard to overcome these issues, keeping us updated on future plans and dealing with any pipeline business in a responsible manner.
So, let’s hail those who have continued lending where possible in the right way, and also those who are regrouping to find solutions which will better support a range of borrowing requirements now, and in the future.
The bad
Sadly, a few lenders have simply not adapted quickly enough and quietly closed the doors on pipeline cases without due care, attention or the right levels of communication. And some continue to say their doors are open to lend, when frankly they aren’t.
Here at First 4 Bridging, we’ve had to pick up the pieces from a number of cases where introducers have approached us after their client had been left in limbo by their original lender.
I appreciate how tough the initial transition period was and the resulting uncertainly, but - in some cases - the lender reaction of burying their heads in the sand was simply not good enough.
The rise in professional standards throughout the specialist markets in recent years – especially across the bridging sector – has been nothing short of staggering and it’s a huge disappointment to see some of these standards slip – albeit from what remains a tiny minority.
The future
We can all learn a huge amount from a period which has tested us all on a business and personal level. As outlined recently by the Association of Short Term Lenders (ASTL), the bridging market is still open for business, but communication is vital in helping customers to identify the best options for their borrowing situation.
In times like these, the resilience, flexibility and solution-led attitude attached to the short-term lending sector will continue to rise to the fore, as will the importance of relationships. All lenders have been taken out of their comfort zone and tested to the max.
As previously outlined, many are enhancing their reputations, but some have been found wanting. It’s our responsibility to ensure that introducers and intermediary partners have access to the types of lenders who are fully transparent and can deliver the right level of solutions and professional standards when required. As such, we will undertake a further review of our lending panel and remove those who are falling short.
We also urge brokers to ask similar questions of their specialist distribution partners, in terms of how they are coping with the current crisis.
What measures are they taking to ensure the right solutions are still in place for your clients? Do they know which specialist lenders currently have the appetite to lend? Which lender can service a case right through from application to completion? And what type of case will they consider in the current economic climate?
And if they can’t answer them, then maybe it’s time to look for a new partner who can.
