By Adrian Bloomfield, CEO at nci Resources
Over many years there has been a designed, refined and delivered process of essential field services for short-term lenders. Unlike the major financial institutions, short-term lenders operate from a single, centralised office and do not have branches. For this reason, it is not easy or convenient for lenders to meet applicants or conduct reviews for first-time borrowers and yet these are crucial tasks and best practice for vigilant lenders.
The service is mainly for first-time borrowers as there is a limited requirement to repeat the exercise after a good first-time experience, and is arranged directly between the lender and the service provider.
At the early stages, experience has shown how essential it is for there to be a face-to-face meeting between the applicant and the lender, prior to the drawdown of the loan. Lenders have found that it is vital to meet applicants to verify identity and to check the crucial details and unequivocal proof of deposit, if the proposed loan is to assist with a property purchase.
Competent lenders make certain they know of the source, existence and whereabouts of the deposit to ensure that the applicant’s stake is truly invested in the project. An adverse publicity search is crucial but often not carried out. All too often some lenders do not meet their applicants but instead leave crucial verification tasks to others, such as valuers and solicitors.
Part of the required field services is to confirm the existence and nature of the security and to provide evidence of its suitability through an extensive report with photographs. This supports the valuation – although of course it does not replace it. From time to time these arrangements fail and fraud is committed, which almost always results in considerable loss to the lender. This can and should be avoided.
From experience it is known that the best fraud prevention and information gathering capabilities are provided by the lenders themselves (DIY). This is not always possible or convenient – and that is where a service provider comes in (YDI). nci has a fully national, FCA-authorised operation of experienced field agents and we can visit any address in the UK within a few days. The cost of this service is modest and is usually picked up by the applicant.