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Dispelling bridging myths Exploring the merits of dual representation Roger Morris Group Distribution Director Precise Mortgages
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hen I joined Precise Mortgages over ten years ago, my main focus was to develop the bridging strategy and create a quality training programme which would ultimately challenge the reputation of bridging, which at the time was seen as relatively murky. We wanted to be at the forefront of educating the market, leading on what best practice should look like and to help establish a better customer journey. So, we decided to follow the protocols and processes laid out in the CML Handbook and, from the outset, we only dealt with brokers who held a credit consumer licence. Before 2010, bridging and short-term lenders would insist that as bridging was complex, you needed a solicitor for the customer and a separate solicitor for the lender. In short there were a lot of myths floating around. I carried out my own research about why this was needed, why bridging was seen as complicated, and why dual representation wasn’t used more widely. For those of you who don’t know, a bridging loan is treated no differently from a first charge loan and by law we implement regulated practices across every product line that we deal with. This ensures that the customer has the same code of conduct and can be confident that the lender treats regulated and non-regulated business in the same way. Now when it comes to applying for a bridging loan, you have the option to either go for dual representation or sole representation. If you select sole legal representation, the first thing the lender’s solicitor will do is write to the borrower’s solicitor and ask for a 22 | NACFB
written undertaking that the borrower will cover all the costs for the lender and just that process could take three to four weeks. Dual representation is where the same experienced solicitor acts for both the customer and the lender. When speed is of the absolute necessity, which it often is with a bridging loan, this is the option I would personally go for. At Precise Mortgages, dual representation is used in around 90% of the cases we deal with. To give you an idea of how much quicker it can be to use dual representation, we can complete a bridging application in as little as two weeks, as long as all the paperwork is complete and correct. If the case is urgent and the borrower pays for valuations and dual representation at the same time, the legal work could be completed by the time the valuation comes back, which is roughly three to four days on average. But don’t just take my word for it. At Precise Mortgages we have access to a panel of expert bridging solicitors, so I asked Jodi Lund from JMW Solicitors to share her professional opinion for brokers to consider when tackling bridging cases. Jodi said: “It’s vital to the efficiency and speed of a bridging transaction to ensure that solicitors with an in-depth knowledge and expertise of bridging are instructed to act, whether on a separate representation basis on behalf of the lender only or on a dual representation basis on behalf of the lender and borrower in pre-approved circumstances based on outcome-focused risk analysis and managing potential conflicts.
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Dual representation is used in around 90% of the cases we deal with
