The Mortgage Lender Conveyancing Panel Information

In operating open conveyancing panels, lenders such as The Mortgage Lender 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.

The Mortgage Lender 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.

You might expect The Mortgage Lender via their Part Two requirements to address this but the Handbook is silent on time frames. You need to look at the Terms of The Mortgage Lender’s Conveyancing Panel Appointment that you entered into. For many lender's these Terms have a provision along the following lines: ‘To keep us informed of the reasons for any delay in your being able to send the title deeds and documents we require to us within 3 months of completion or evidence of proof of registration within that period. (We will send reminders if the deeds have not been received but will not acknowledge receipt of deeds’ It is imperative to keep The Mortgage Lender updated. Law firms can often compound their problems by not communicating with the lender when there is a delay or problem.

You will be aware of the trend in recent years for lenders such as The Mortgage Lender 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 The Mortgage Lender panel. The situation that you find yourself in is where your client’s purchaser has his/her own lawyer and The Mortgage Lender 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 The Mortgage Lender’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 The Mortgage Lender. You will no doubt be required to undertake directly to The Mortgage Lender’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 The Mortgage Lender conveyancing panel.

The Mortgage Lender approved panel lawyers have to comply with the Part II instructions relating to Transfer of Equity. These are set out in Section 16.3. First, your firm must approve the form of Transfer of Equity (which should be in the Land Registry's standard form) and, if The Mortgage Lender require, the deed of covenant on their behalf. You will need to check The Mortgage Lender CML Part 2 conditions to see if The Mortgage Lender have standard forms of transfer and deed of covenant. Please note that this requirement can change from one transaction to another so do check! Second,When drafting or approving a transfer, you should bear in mind that: although the transfer should state that it is subject to the mortgage (identified by date and parties), it need give no details of the terms of the mortgage; the transfer need not state the amount of the mortgage debt. If it does, the figure should include both principal and interest at the date of completion, which you must check ; there should be no statement that all interest has been paid to date. Further obligations are set out in the UK Finance Lenders’ Handbook which have to be followed by all firms on the The Mortgage Lender conveyancing panel

It would be advisable to supply details of the date of removal, information on the reason for removal, date of appeal and any reason given for reinstatement. This should not negatively affect your firm’s application but gives the Law Society viability as to what has happened.

You should get in touch with The Mortgage Lender to obtain standard documents. The CML Handbook contains a specific section for lenders to set out who to contact to obtain standard documents. The Mortgage Lender in their Part 2’s state: It is likely that you will need to disclose the firm’s The Mortgage Lender conveyancing panel number.