Call for transparency in the bridging loans industry
The bridging loans industry needs to take a lesson in candour and openness, according to Brian Rubins, Director of Alternative Bridging Corporation (Alternative). Rubins argues there are few places where such disciplines are more abused.
Where are there more misleading assurances which cannot be fulfilled, such as “loans up to 90% LTV”, “interest from 0.5% per month” and “completions in 24 hours” than in short-term loans? he asks, arguing that while qualifiers such as “up to” and “from” should tell us something borrowers will look at what they want to see and not the small print.
“Overall our industry is growing and maturing and so must each of the lenders and brokers who operate in it,” says Rubins. “We all want to attract as many new enquiries as we can and using “from” and “up to” may help to make the ‘phone ring or the computer ping but, in fact, building lasting relationships is far better achieved when founded on truth and facts.
“For brokers who can be relied upon it is far better for lenders to give them access to detailed underwriting criteria so that they are fully aware of terms, preferences and red lines. It saves the broker time and rather than relying on “from” and “up to” and being let down, he can say to his client on day one, these are the terms and you will get them, maybe a little better but definitely no worse.”