Thursday 11 February 2010

Leeding the way in making conveyancing tougher

Have any conveyancers noticed the change in conveyancing requirements for Leeds Building Society ?

Having received a notification from LENDERmonitor as to a change I thought I would share it with you as yet a further example of how lenders make conveyancing increasingly difficult and complex.

Leeds have made two changes. The first relates to monies received from third parties paying monies towards the purchase price and the second relates to building insurance. The changes are as follows :

Old : 5.9 - Contact point if borrower is not providing balance of purchase price from funds/proposing to give second charge.

New : 5.9 -If the balance of the purchase price is being paid wholly or in part by anyone other than the borrower, you must provide us with a declaration of this amount, that such an amount is not repayable and that the party providing this amount will not acquire an interest in the property. You must also ensure that clear bankruptcy searches are carried out against the borrower and all parties contributing to the balance of the purchase price.

Old : 6.13.5 - What is the maximum excess you will accept on buildings insurance policy? a £250.

New : 6.13.5 - We will accept up to a limit of £1,000 upon written receipt of the borrowers acknowledgment of their obligations. Any excess of £1,000 must be referred to the Mortgage Lending Department.

Both changes require an additional declaration to be drafted and entered into by the relevant parties. No precedent has been supplied or suggested. These changes will undoubtedly result in one of three things happening ( depending on the conveyancing firm ) :

1. The conveyancing lawyer will not realise this change of requirement and breaching their obligations to the lender
2. The conveyancer will deal with the additional work and absorb the cost
3. The cost of the additional work will be passed on to the client who will no doubt feel aggrieved in thinking that they have been overcharged ( not fully appreciating that this is a cost that could not have been anticipated by the lawyer at the point of giving out the conveyancing quote )

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