Borrowers no longer required to use a solicitor approved by HSBC coveyancing panel following complaints
HSBC is to drop its controversial requirement that homebuyers use one of a panel of just 43 firms to do the bank’s legal work following a string of complaints from customers and lawyers.
From August, the bank will allow all members of the Law Society’s Conveyancing Quality Scheme (CQS) to act for it and the borrower in the conveyancing work needed to buy a property, increasing the number of firms consumers can choose from by more than 1,400.
Since January, mortgage borrowers with the bank have been forced to instruct one of a panel run by Countrywide to act for the lender. They have had the choice of instructing their own conveyancer too, but some who have done so have reported delays, and there have been stories of solicitors refusing to work with the bank’s panel.
Following the change homebuyers will have three options: they can still use one of the panel for their own and HSBC’s legal work and pay a fixed fee for the service; they can use one of a larger panel of firms which have the CQS mark but can set their own fees; or they can still instruct two solicitors – one to represent them and one the bank.
CQS-accredited firms with just one practitioner will be restricted to handling mortgages worth up to £150,000, but there will be no restrictions on larger firms.
Martijn van der Heijden, head of lending at HSBC, said the original panel had been introduced “to provide additional protection for both our customers and the bank”. “We listened to feedback from customers and solicitors, and through working with the Law Society can now agree to more solicitors acting for us while also managing our risks and maintaining the unique benefits of using one of our panel solicitors.”
The bank has committed to lending £15bn in residential mortgages in 2012, and has been offering some competitive fee-free tracker deals since the start of the year. It only sells mortgages direct to consumers, not via brokers.
The panel of accepted solicitors was introduced in response to rising levels of mortgage fraud, and followed decisions by other lenders to restrict the number of conveyancing firms with which they were happy to work.
But while the Law Society had expressed reservations about other lenders’ panels, HSBC’s engendered outright hostility. Complaints were made to the Office of Fair Trading, an e-petition had collected more than 2,000 signatures and there were plans to protest at the bank’s AGM on 25 May.
The Law Society’s chief executive, Desmond Hudson, said: “The Law Society and its members have campaigned for this change in the interests of solicitors’ homebuying clients since HSBC introduced its original panel.
“HSBC’s willingness to engage with us has helped secure a good outcome for their mortgage customers, our CQS members and the housebuying public.”
Adrian Anderson, director of mortgage broker Anderson Harris, said: “HSBC has been plagued with service issues and delays, partly caused by a limited conveyancing panel and also by offering some of the ‘best buy’ mortgage rates on the market.
“Over the past few months we have seen a significant increase in buyers coming to us in desperation because their mortgage offer is taking so long to process that they are in danger of losing their property.
“In this climate, where there is a dearth of desirable properties on the market, this is a disastrous situation for buyers to find themselves in.”
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