In a sector where speed is often of the essence, sluggish transactions can often lead to disappointed clients and sometimes result in aborted applications.
Consequently, some bridging lenders are using title insurance are part of their proposition, to help speed up transactions and deliver more certainty.
Title insurance ultimately protects a lender should an issue arise with the title if the property needs to go through a possession process as part of any recovery activity. This gives lenders greater certainty during the application process and it means they can, in turn, provide greater certainty – and speed – to brokers and their clients.
Often a title insurance policy will also go well beyond what would be unearthed by basic searches and can protect against unknown defects, such as fraud and forgery on behalf of both the borrower and the solicitor, negligence on behalf of the solicitor or search agents, and false assertions, undue influence and mental incapacity.
So, with a comprehensive title insurance policy in place, lenders can focus on underwriting the fundamental elements of a bridging case and this can create more efficient and effective application processes.
Another benefit of title insurance is that it can enable some transactions to proceed that may not have otherwise been able to do so. For example, at Castle Trust Bank, we recently completed a portfolio loan secured on 19 Buy to Let properties in London, with an aggregated value of £9.3m. There were a number of complicated legal issues associated with the case, but the application was able to proceed quickly and easily with the use of a bespoke Title Insurance Policy, obtained via specialists Westcor International.
With this in place, we were able to provide a £5.4m TermTen loan on a 5-year fixed rate to the borrowers, who were an Israeli and a UK national, both of whom currently live in Israel.
There may be challenges around conveyancing delays in the bridging market at the moment, but there are also potential solutions. Title insurance can unlock some of these challenges, which is why it is being used by a growing number of forward-thinking lenders, like Castle Trust Bank, to deliver the best results to their brokers and customers.