As the mortgage and property expert for BBC Radio Somerset, I was asked to voice my opinion/concern about the possibility of a future repossession boom.
Well, I did it with aplomb, and sufficiently scared the whatsit out of every listener clinging on to their property by their fingertips.
My view, you see, is that when borrowing rates go north (regardless of low Bank of England base rates) the bubble will burst and out will pour all those unfortunates only able to hang on due to the current low cost of borrowing: the proverbial final straw.
Then I began to question this term ‘expert’.
Yes, I know more than the man on the Clapham Omnibus about the mortgage industry and related areas having spent three decades up to my neck in it, but ‘expert’?
Even I have to draw the line there. An expert to me is somebody able to shoot 67 on a par 70 course or hit a 147 break, or indeed somebody who specialises in a small area of their subject. We seem to get a bit carried away these days with self-importance. Morning TV is filled with experts from diet to fashion, none of whom state anything but the obvious.
Ok, where is this going I hear you say, and is there a point? Well, actually there is.
I was talking to one of our mortgage ‘experts’ and realised they are exactly that. They know every product available in the residential market and don’t stop wittering on about how much better the Halifax 2-yr fix is at 2.5% than TMW’s 2-yr at 2.5%.
Then I overheard a conversation whereby a frontline operator at a major bank suggested that he/she would refer the case (it had been turned down) to an ‘underwriting expert’. Well, finally I had heard it all – ‘underwriting expert’.
Today, more than ever in this wonderful industry of ours, nothing could be further from the truth. Underwriting experts would surely understand the benefit of a regular payer looking to switch from one lender to another to reduce their monthly commitment by 50%, or the value in a £500k case where the buyer is prepared to risk 300k of their own hard-earned money, or perhaps where a self-employed applicant of 15 years standing had, on the advice of their accountant, changed status from partnership to ltd in the last year.
But they don’t.
Unfortunately, lending decisions are getting harder and harder to understand and underwriting criteria is determined through fear of upsetting the FSA rather than using commercial nous and expertise. If ever there was a need to bring back the ‘experts’ in an industry, it is now.
For our part, we try to align ourselves with lenders that are prepared to ‘take a view’. They may be few and far between, but they are very good value for money when you need to call on a bit of common sense. Will the High Street catch up? I sincerely hope so, but at this moment in time I very much doubt it.
Ray Bohringer is partner of mortgage firm Obligo, which partners with estate agents.