One of my long term client has asked me to sign off forecasts for her mortgage application.
The forecast figures look reasonable based on past performance.
Do you do this? How do I cover myself before I sign these forecasts? Should I be signing them?
Replies (5)
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Crystal ball?
Add a disclaimer to anything that you sign.
PM me if you would like a copy of the disclaimer we use.
I don't
Over a number of years, I've managed to grow skin thick enough to reject attempts to get me to sign such forecasts. Only put your name to past facts. A forecast can only ever be an opinion. No matter how reasonable, the forecast could be disastrously wrong.
Why risk unlimited personal liability? The lender and the borrower usually manage to find a way round which doesn't involve you being potentially exposed.
see below
'this reply is given in good faith but no liability either express or implied is to be attached hereto'.. or something similar
Assumptions
If you are going to make forecasts for loan purposes (and I agree best avoided if you can) then in addition to a disclaimer, list all of the assumptions that you have made in the forecast (level of income will increase by x% per year, bank base rate will stay at 0.5%, etc.)