| I was speaking to a loan valuer recently and he | | | | Companies en-mass. The Council of Mortgage |
| mentioned a bizarre situation that cost a purchaser | | | | Lenders, the body that regulates loan lending, considers |
| many hundreds of pounds in fee costs. | | | | allowing individual companies the right to have differing |
| The Valuer (Bob) was sent a property loan valuation | | | | lending criteria is satisfactory even if the public are not |
| instruction on a Victorian house in the south of England. | | | | told these vital policies. |
| On inspection Bob noted that the rear kitchen | | | | I am sure each Lender is, in the small print somewhere, |
| bathroom wing of the building was constructed in | | | | under a duty to publish their leading criteria and so "it is |
| half-brick form, common for the period in that district. | | | | not their fault that customers choose not to read |
| Technically this part of the home was below habitable | | | | lending terms given to them". |
| standard notwithstanding these walls had been | | | | So what can be done about this bizarre situation? |
| weather-proofed externally and set internally with a | | | | This is the easy bit but is something that seems to |
| dense render. The ratio of sub-standard wall to cavity | | | | always be talked about but never completed. How |
| full-standard walling was about 20 per cent. | | | | about we properly regulate Estate Agents including the |
| Bob prepared his report in accordance with that Loan | | | | introduction of standard examinations upon a syllabus |
| Company's Valuers Manual and they accepted it and | | | | that includes construction recognition and general |
| offered the client purchaser loan finance accordingly. | | | | property compliance issues to Lenders Valuer Manual |
| Unbeknown to Bob as his report was being | | | | criteria. OR....... |
| considered the client purchaser decided to change | | | | The Council of Mortgage Lenders should be granted |
| lenders for a better interest rate just announced by | | | | the power to issue only one set of lending criteria to all |
| Company B. Ten days later Bob received, by pure | | | | Valuers on behalf of all Lenders. |
| chance, the instruction to value the same home again. | | | | Any system, as is currently in place, that throws the |
| Bob prepared another report. However, this second | | | | emphasis on to a non-trained ordinary member of the |
| report was very different from his previous report. | | | | public to decide matters of technicality of construction, |
| The second report simply said that the home did not | | | | is fundamentally flawed and unfair. |
| comply with that Loan Company Valuers Manual | | | | I believe the Office of Fair Trading are failing in their |
| criteria and was declined as being acceptable security. | | | | duty to provide effective monitoring and regulation in a |
| In other words no loan could be offered. | | | | marketplace that is well known for its protectionist and |
| The reason behind this change in adequacy of security | | | | monopolistic tendencies that operate against the best |
| was stated as being that the wall construction was | | | | interests of the consumer. |
| sub-standard and the Loan Company did not lend on | | | | I also believe the Royal Institution of Chartered |
| sub-standard forms of construction. | | | | Surveyors has too long buried its head in red-tape to |
| Bob had been paid 400 pounds sterling in total for his | | | | accept the real challenges before it: why have they |
| two inspections. The client had paid over 700 pounds | | | | not recognised this simple fundamental market flaw |
| sterling in total mortgage application fees. Estate | | | | that places their membership is a rather strange |
| Agents in the property chain were many thousands of | | | | relationship with the end client, the home buyer. |
| pounds out of pocket on lost commission charges. The | | | | By the way --- if the Home Information Pack scheme |
| rippled effect caused these individuals, and many | | | | had had a Sellers Survey (like the system that |
| others, massive loss of revenue, waste of time and | | | | currently operates in Scotland) included then none of |
| effort plus related stress and disappointment. | | | | this nonsense would be possible. Oh well, we cannot |
| Who was to blame for this bizarre situation? | | | | expect too much from weak Government and less |
| It may be unconventional but I believe it is the Loan | | | | than fully impartial market Regulators, can we? |