HSBC UK Bank Conveyancing Panel Information

In operating open conveyancing panels, lenders such as HSBC UK Bank face a number of fraud and negligence risks. While there is no authoritative source of data on lender exposure to solicitor–led mortgage fraud, anecdotal evidence from lenders indicates exposure on individual cases are often in the millions of pounds. The National Fraud Authority estimates that £1bn per year is lost in mortgage -related frauds in total, which is seen as a conservative estimate.

These risks are exacerbated by the lack of a comprehensive set of data on all conveyancing firms (which, for the avoidance of doubt, would include solicitors and conveyancers across the UK) which is in a readily accessible format. Currently, lenders vet the suitability of their panel firms against a variety of disparate, incomplete and potentially inaccurate sets of information. One top 5 lender pointed out to us that it is almost impossible to track individual fraudsters who move from firm to firm, especially where they are no longer registered or no longer hold a valid practicing certificate.

HSBC UK Bank and other lenders are in varying stages of reviewing their approach to vetting firms on their conveyancing panels, to ensure their ongoing exposure to unsuitable firms is reduced. There is also regulatory impetus on lenders to ensure that they have satisfactory oversight of their third party panels, including a due-diligence process.

During 2013, 0 sections of the UK Finance Lenders’ Handbook P2 were changed by HSBC UK Bank. Some changes are more important than others but as a firm on the HSBC UK Bank conveyancing panel you are of course obliged to comply with individual lender requirements, as set out in Part II of the UK Finance Lenders’ Handbook. Locktons have recently pointed out in an article that non-compliance with Part 2 requirements account for a number of high value claims, and it is therefore important to be aware of any particularly onerous terms that an individual lender may impose.

Remember: CML requirements are not guidelines; they are the lender client’s instructions.

When a solicitor is acting for both HSBC UK Bank and borrower there is potential for conflicts to arise. You owe duties to both clients. All information received by you from your client is confidential and cannot be disclosed without the client’s consent. In the situation you find yourself in if the purchaser will not consent to the information being passed on to the lender the solicitor must cease to act for the HSBC UK Bank and it may well be prudent you to cease to act for the purchaser as well. You can not tell the HSBC UK Bank the reason for termination of the retainer over and above the fact that a conflict has arisen. The fact that you can no longer act should alert even the most somnambulistic of lenders that something is wrong with the borrower and/or purchase. The fact that you have disinstructed yourself should not affect your HSBC UK Bank conveyancing panel status.

You will be aware of the trend in recent years for lenders such as HSBC UK Bank to take a much more pro-active approach in relation to the management and make up of their conveyancer panels. The knock on effect of this is that it is more likely that there will be a higher number of cases where a conveyancer is not on the HSBC UK Bank panel. The situation that you find yourself in is where your client’s purchaser has his/her own lawyer and HSBC UK Bank have appointed a separate lawyer to act on their behalf where the new CML Part 3 requirements apply. Section 11.1 of the UK Finance Lenders’ Handbook Part 3 requires HSBC UK Bank’s panel solicitor to ‘ ...transfer the mortgage advance directly to the Seller’s conveyancer. The Seller’s conveyancer must be required to hold the mortgage advance on the terms of the required undertaking. The example borrower’s conveyancer’s undertaking letter includes a specific example of the seller’s undertaking’. You should expect to be advised to received the mortgage advance directly from the conveyancing solicitors for HSBC UK Bank. You will no doubt be required to undertake directly to HSBC UK Bank’s solicitors to discharge any charges secured on the property and to send directly to them the executed transfer and any other documents required to enable us to effect registration. Please remember to carefully consider undertakings in accordance with your firm’s protocol and record them in your undertakings logg. Please remember that as well as this breach of this undertaking having regulatory and compliance implications it’s breach could also result in your firm being removed off the HSBC UK Bank conveyancing panel.

The Law Society’s CQS membership is no guarantee to lender panel acceptance. Nevertheless the CML have indicated that it is likely to become a prerequisite for firms wishing to join their approved list of conveyancing solicitors. A number of Lenders now use CQS as the starting point for Panel approval such as Astra Mortgages.

You need to communicate with HSBC UK Bank to obtain standard documents. The CML Handbook has an individual question for lenders to reveal who to contact to obtain standard documents. HSBC UK Bank in their Part 2’s state: You will need to quote your HSBC UK Bank solicitors panel number.