Friday, 31 January 2014

Mortgage Works Conveyancing Panel Alert - Minimum Lease Term

The Mortgage Works continued trend for lenders to shy away properties with short leases yesterday tightening their minimum lease term requirements.

The lender used to accept leases where there were 30 years at the end of the mortgage term. As of today they now require a minimum unexpired lease term of  55 years with 30 years remaining at the end of the mortgage term.

The Mortgage Works conveyancing panel should take note. On the upside there may be a possibility for picking up lease extension work.  

Newcastle Building Society Conveyancing Panel Alert - A Tiny but Important Change

Newcastle Building Society yesterday made a change to their Specific Requirements to their conveyancing panel which could easily be missed but could have a big impact.

The change relates to the answer to question ‘In what circumstances might the Society amend or withdraw the mortgage offer?’ One part of the answer used to read ‘ If the mortgage transaction does not complete within 6 months of the date of the offer’. That sentence has now been changed to ‘If the mortgage transaction does not complete within 3 months of the date of the offer’

Such a change could easily catch a solicitor/conveyancer out if they assume that the Mortgage Offer is Valid for 6 months.

Other changes also took place in addition to the above so if you are on the Newcastle Building Society Conveyancing Panel click here to see the update.

Thursday, 30 January 2014

Checklist for Registering a Lease Extension

  • Has the lease been drafted using prescribed clauses when required (See Land Registry Practice Guide 64)?
  • Have you obtained up-to-date official copies of the title the lease is out of to confirm what incumbrances, if any, have to be accounted for e.g, restrictions etc?
  • Is the Form FR1 completed for a first registration or AP1?
  • Have consents been logged in respect of any restrictions in the Proprietorship Register, charges in the Charges Register of the lessor’s title or alienation terms in head leases?
  • Has a form RX1 been logged if other than a standard restriction is required? (NB that the Land Registry will accept without form RX1 an application for a standard restriction which is set out in clause LR13 of a prescribed clauses lease or contained in a charge the form of which (including the restriction if approved in advance).
  • Have you provided complete and accurate details of identity for each of the relevant parties to the lease or included forms ID1/ID2?
  • Have you sent any necessary SDLT evidence or a letter explaining why it is not available?
  • If the application relates to joint proprietors have you indicated whether they are to own as tenants in common or joint tenants?
  • Have you ensured plans references referred to in the lease are shown clearly on the lease plan
  • Are all names are consistent in all documents?
  • Have you lodged a certified copy of the lease or deed of variation, if you require the original deed to be returned to you?
  • Have you lodged a discharge in respect of any charge affecting the closing leasehold title or if the mortgage is to continue have you lodged a deed of substituted security in respect of the charge ?
  • Are all the incumbrances on the closing leasehold title suitably discharged, withdrawn or cancelled? If appropriate, have you lodged appropriate documentary evidence for example, discharges or consents etc with your application?

Removed From a Lender Conveyancing Panel?

If your firm has been removed from the Santander Conveyancing Panel or Lloyds or Nationwide BS , and ou wish to appeal that decision, then you can write to the relevent address below. It is essential that you state your firm's panel number on any letter of appeal. If you require guidance about your letter of appeal before sending it, you should contact the Practice Advice Service at the Law Society on 0870 606 2522, or go to 

Santander Conveyancing Panel
Head of Mortgage and Lending Operations
Santander Deeds Services
PO Box 287
Stockton on Tees
TS17 6QQ 

Lloyds Conveyancing Panel 
Paul Sunderland
Conveyancing Panel Manager
Retail Mortgage Operations
Lloyds Banking Group plc
1 Lovell Park Road
West Yorkshire LS1 1NS

DX 11896 Leeds Lovell Park Road
Fax 01422 326200 

Nationwide Building Society Conveyancing Panel
The Registration Team
Mortgage Services
Nationwide Building Society
Kings Park Road
Moulton Park
Northampton NN3 6NW

Wednesday, 29 January 2014

Cambridge Conveyancing Panel Now Open to Licensed Conveyancers

Cambridge Building Society today removed the restriction which prevented Licensed Conveyancers from being on the society's panel. 

The new requirements for being added to the panel are as follows
  • Minimum of two partners in the practice
  • Minimum indemnity cover of two million
  • The practise must be listed in the Butterworths Law Directory, Waterlows Law Directory or be listed on the Law Society website. (It is however not clear if conveyancers can be listed on such Butterworths or Waterlows directories).
  • Secure premises to hold securities
It seems that Cambridge BS may wish to make a further amendment to reference a firm being listed on the CLC website.
The previous requirement that a firm had to be within East Anglia has also been removed.
To see the full wording of the changes click here.

CML Handbook P2 Changes 2013 - Review At-a-Glance

Lenders made 68% more changes to their requirements in 2013 compared to 2012

According to Lexsure’s review, 91% of CML lenders amended their Part II policies last year, with over 1,793 sections changed. This represents a 68% rise in policy change activity compared to 2012.

Some of the more frequent changes focused on the following:

  • Which documents the lender needed to be sent on completion  
  • Whether a lender accepts personal searches and if so, what their requirements are.
  • Disclosure obligations relating to properties where a Green Deal exists or where there are solar panels on the property

On average, a lender in England & Wales changed their Part 2 requirements 3.9 times in 2013, with 91% of all lenders changing requirements at least once in the year

Clearly, when it comes to complying with lender requirements, solicitors cannot assume that what was true in the last transaction is still true in the next. Changes, even once or twice a year, compound when one considers the myriad of lenders. The numbers show that vigilance is key.

Key government or regulatory initiatives result in a flurry of requirement changes

The introduction in July 2013 of new requirements as to whether the lender needs to be informed of a Green Deal on properties tripled the volume of Part 2 changes in just one month. A similar impact was seen a year earlier when requirements were introduced to report on energy technologies installed on residential properties

Requirement changes for mortgages on properties in England and Wales doubled last year

With the recovery of the property market, lenders are being hyper-cautious in their mortgage lending processes. Having been burned in the global financial crisis of 2008, they are acting to strengthen their positions with more cautious policies.

Lenders are wary of non-standard properties

The trend is for lenders to be more picky with premises they will lend on, avoiding anything remotely controversial. This continued with dozens of lenders restricting their policies relating to flying freehold, Houses in Multiple Occupation, properties with solar panels, freehold flats, and leasehold properties with short leases.

Tuesday, 28 January 2014

Top Ten Most Read LENDERmonitor Policy Alerts in 2013

LENDERmonitor provides protection to conveyancers from the risk of missing updates to Part 2 of the CML Lenders Handbook. With the free LENDERmonitor alert service, solicitors and conveyancers receive an email notification any time lenders of interest make changes to their policies. Staying abreast of any policy changes is particularly important at a time when lenders are making a significant number of changes – last year LENDERmonitor sent out over 100 email alerts.

Change date
Click to see Details
Barclays Bank as The Woolwich
Lloyds TSB Bank plc - C&G mortgages
HSBC Bank plc
Barclays Bank as The Woolwich
Lloyds TSB Scotland plc
Virgin Money plc

Sunday, 26 January 2014

Conveyancing Issues to Prompt CML Handbook Changes in Scotland

Conveyancing issues have come out as a priority according to a recent Law Society of Scotland poll of its member solicitors. 

Following the "no" vote against the separate representation of borrowers and lenders in conveyancing transactions at the SGM in September 2013 a small Working Party of the Society's Council has been established to meet with the Council of Mortgage Lenders (CML) with a view to negotiation of the CML Handbook in order to frame fairer and more relevant rules for Scotland.

I understand that the Working Party has met twice and talks have commenced and progress has been made in relation to the proposed amendment of the CML Handbook in order to make it more suitable to reflect Scottish practice and procedure.  

Any changes to the CML Handbook require to approval by the CML Legal Advisory Panel and Handbook Oversight Group before final sign off by a sub group of the CML Executive Committee. A full progress report will be provided to the Society's members at the AGM on 4 April 2014.

Most Changed CML Handbook Part 2 Sections (England & Wales) 2013

# changes
Section number
Does the lender send the discharge via a DS 1 form or direct with the Land Registry?
What new home warranty schemes are acceptable to the lender?
Does the lender require you to disclose the details of any existing Green Deal Plan(s) on a property?
Does the lender need to be sent the original mortgage deed?
If different from 1.11, contact point for title documents:
What form of attestation clause does the lender use?
Does the lender accept personal searches and, if yes, what are the lender's requirements?
Does the lender have additional requirements relating to leases of roof space for solar PV panels, and if so, what are they?
If different from 1.11, the contact point if the seller has owned the property for less than 6 months:
If different from 1.11, contact point for confirming proposed deed or agreement will not adversely affect the lender:
Contact point for standard documents.
Which documents must I send after completion?
If different from 1.11, contact point for finding out the debt amount:
Does the lender require me to report to them where the lease does not meet the CML minimum requirements for leases of roof space for solar PV panels?

Summary of Pros and Cons of Separate Representation

  1. Clarity of the obligations of solicitors and removal of any possibility of a conflict of interest arising, thus ensuring that clients on both sides of a security transaction receive truly independent advice.
  2. Reduction in the number of negligence claims arising from breach of CML Handbook or BSA Mortgage Instructions. Ultimately this should reduce the cost of PI insurance. 
  3. Reduction in lender panel management costs and panel compliance costs for solicitors.
  4. Reduction of mortgage fraud.
  1. Inevitable increase in borrowers’ conveyancing fees, due to the involvement in transactions of another firm of solicitors. 
  2. Likely delays in conveyancing transactions involving a mortgage, due to more complex procedures and parties.

Saturday, 25 January 2014

The Problem with ‘Buffet’ Style Conveyancing

On my recent travels I stayed at a budget hotel (visiting firms across the country costs an arm and leg, you know!). I sat down for breakfast and, without wishing to sound like a snob, I was a bit disappointed with the sparse buffet. I soon berated myself as it dawned on me that the small amount the hotel charged included breakfast for free. Here's the thinking that leads just about every all-you-can-eat buffet to trend to mediocrity:
"Oh, don't worry about how fresh the scrambled eggs are, after all, they're free."
Indeed, from the point of view of the ‘chef’—I use the term more loosely than the eggs—each individual item on the buffet is 'free' in the sense that the customer didn't spend anything extra to get that item.
The analogy with conveyancing as, I tucked in to my breakfast, became obvious. Once you start resenting the low quote or you give something away for free (‘no sale, no fee’ does amount to ‘free’), then every single item on the ‘buffet’ gets pretty lousy, and the next thing you know, the customers (or should I say ‘clients’) you seek don't come.
So, the conveyancing firm that thinks, "With this sort of volume and pricing with free conveyancing on abortive cases ... we can not be proactive and give a personalised service," has completely failed to recognise that the client is expecting a high quality service and a personalised one as well. Not only does a client expect a certain level of service regardless of what they pay, the duty of care you owe takes no account of the fee or price of the property. 
I would have had so much more respect if the hotel site would have said to me when I booked on-line: "You are entitled to a free breakfast, but please don't expect Heston Blumenthal quality for the price you are paying."

Wednesday, 22 January 2014

Which Lenders Made the Most CML P2 Changes 2013 for E&W?

rankChangesMost Changed Lender
114Lloyds TSB Bank plc-C&G branded roll numbers pre-fixed 20/40
214Lloyds TSB Bank plc-C&G accounts beginning 500000
411Bank of Scotland Beginning A
511The Mortgage Business
610Nationwide Building Society
710The Mortgage Works
810Lloyds TSB Scotland plc
910Bank of Scotland Beginning O
1010Halifax Loans Ltd
119Birmingham Midshires
129The Royal Bank of Scotland plc Virgin One
139The Royal Bank of Scotland plc Natwest One Account
149The Royal Bank of Scotland plc One Account
158The Royal Bank of Scotland plc First Active
168The Royal Bank of Scotland plc Direct Line Mortgages
178Barclays Bank as The Woolwich
188The Royal Bank of Scotland plc Direct Line One
198HSBC Bank plc
207Aldermore Bank PLC