Brokers warned about 'over-optimistic' applications

Thursday 26th February 2009

Tuesday’s Meet the Patrons Day hosted by the NACFB saw some of the key lenders in today’s market gather for an afternoon of networking at the National Motorcycle Museum in Birmingham.

Whilst there were worries that it would be a gloomy affair, there was a surprisingly good turnout of lenders and brokers and a resilient atmosphere amongst those attending. The unofficial message of the day seemed to be a resounding: We’re still here.

However, bridging lenders spoke of seeing quantity rather than quality in the deals they are receiving at the moment. Many said that although they get a high level of applications, the same bad deals are bouncing around.

Sidney Cohen, consultant at bridging finance company Masthaven, said: “A few weeks ago, I had the same application three times in two days from three different brokers. If someone wants money and they get turned down, they don’t go away – they go somewhere else.

“You would naturally expect anyone who submits an application to a lender to put it in the most positive way possible, but there is a difference between being positive and going too far.

“Once a lender becomes concerned about an application, whether an evaluation has been overestimated or problems have been underestimated, it puts a taint on the deal.”

Mr Cohen went on to say: “My advice to brokers is not to panic. People are always going to want to borrow money and banks are always going to have to lend it. Those that survive will only come back stronger.”