Brokers demand bridging transparency

Ryan Fowler

November 26, 2014

Speaking at a Fincorp event she said: “Bridging is becoming more and more available to clients and more and more a necessity given the complication and regulation in our industry at the moment.

“And it is something the Financial Conduct Authority is looking at – the pricing and structuring of bridging deals – so well worth considering when you’re putting a solution to your client.”

Her comments followed a suggestion from bridging lender Fincorp’s director Matthew Anderson, that keeping bridging clear and simple was becoming even more important in today’s market.

He said: “I feel like a broken record sometimes when I talk about headline rates and the fact that they aren’t always the golden egg they might seem. I hear from clients far too regularly that they’ve been hit by heavy fees on the way into a deal or the way out.

“While bridging lenders have become a lot more professional and we are lucky to have a lot of great, honest people in this industry, there are still too many examples of clients who didn’t feel they were made aware of the true cost of a deal before they signed on the dotted line.”

Loggia said: “Fincorp’s offering is different from other providers in the market because there are no fees.

“It may appear that their rate is slightly more expensive, but I think their offering is a good example of transparent charging.

“There is no small print, no compounding interest, no interest charged on fees rolled up. It may not suit every scenario, but it demonstrates how easy it is to be up front about what a loan actually costs.”

In September, FCA mortgage and mutual sector manager Lynda Blackwell revealed the regulator had some concerns about the bridging market.

And with second charge mortgages falling under the regulator’s remit earlier this year, Fincorp’s directors Anderson and Nigel Alexander have both been vocal about the need for more transparency in charging.

Anderson added: “We are not suggesting that no fees is the only way to charge – far from it. People need choice and flexibility and sometimes fees are worth paying.

“The issue isn’t the fee itself, it’s the fact it can be so hard for clients to really get a grip on what a loan is actually costing them.

“This isn’t about badmouthing the market either – we just think it’s good business to be honest with our customers and make sure they fully understand the contract they’re signing with us.”

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