Sunday, 22 November 2009

Sunday, 22 November 2009

Renewable energy, & mortgage lenders

A week ago we were driving back from the Algarve, passing through Portugal and Spain en-route back to the Poitou Charentes. What was immediately evident was the extent of the efforts that have gone into providing renewable energy sources in those 2 countries. Wind farms appear on many horizons as you make the drive. Whether you like them or hate them, they do appear to lie idle for an awful lot of the time, either because there is too much wind, or conversely, because there is not enough. However, given that they have a projected life span of 20 years, and they take 15 years to break even, we remain to be convinced about their value. What was noticeable on this journey, was an increase in the number of solar powered projects. Sitting in football sized fields, the panels are low level and unobtrusive, quite a difference to the modern éolien (wind mill), that stands 140 meters high and is visible for many miles. In fact, you almost miss the solar fields because they are so discreet. It is therefore a bit of a puzzle why this region of France has opted to invest in so many wind farms, (34 parks planned for our department alone), with a complete absence of solar energy except for small individual installations. It is acknowledged that we enjoy well over 2,200 hours of sun per annum, and the area is the 2nd sunniest in France, the decision to opt for wind power baffles me. Enough on this subject for the moment – now for another moan ... Mortgages - I often arrange mortgages for clients and have previously had good experiences with all French lenders. This year, we have been facing one problem after another with one particular lender. Earlier in the year, they were keen to promote their Equity release mortgage, which is a relatively new product here in France. I consequently submitted a number of cases to the lender, and found that each case was rejected by the office that we dealt with, as the rules had apparently changed retrospecively. We subsequently found that the same clients were able to arrange these loans via another branch of the bank, despite assurances to ourselves that this could not be done. Recently, I have had 2 on-going sales where the buyers wanted to take advantage of low French interest rates and finance their purchases via a mortgage. Both cases stood up very well on income and valuation, and both were approved in principle quite quickly. However, the bank’s underwriters started to request information that had already been provided several weeks earlier in both cases. As a consequence, both loans were significantly delayed, although finally approved. The annoying thing was that the completion for both sales had to be rescheduled, to great inconvienience to all parties, and causing a significant amount of stress. No apology has been received to any of the parties, and we feel that this reflects upon our business, as it is us that have made the recommendation to use the lender. We have to seriously question whether we could ever recommend this lender again. (I am quite happy to name and shame the lender to any interested parties).
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