Sunday, 20 December 2015

A Precise Approach to Builders' Deposits

Precise Mortgages have a made an important change to their Part 2 CML Handbook requirements relating to incentives.

In an amendment to Paragraph 6.4.4 Precise clarify that an an unacceptable incentives includes  “' deposits (with the exception of up to a maximum of 5% of the purchase price of residential purchases which are not for buy-to-let), vendor's deposit, discounted purchase price, purchase from family at discounted purchase price and purchase from a company in which the customer(s) has an interest.”

Other than the above change Paragraph 6.4.4 remains the same. Two other sections were however changed relating to minimum unexpired lease term (5.14.1) and the requirement for a CH2 application (14.1.4). Lawyers on the Precise Mortgages Conveyancing Panel should take note.

Thursday, 17 December 2015

Leeds Follow Other Lenders Giving Short Leases a Wider Berth

Conveyancers need to take special note of the recent trend in lenders increasing their minimum unexpired lease terms via amendments to section 5.14.1 of Part 2 of the CML Handbook.

If I was still in practice I would definitely be referencing this trend in the report on title sent to clients purchasing leasehold flats with less than 95 years remaining.

Next month Lexure will be publishing their CML Handbook Data Report for 2015. This annual overview of Part 2 changes makes for interesting reading especially the section addressing changes in leasehold requirements. Those wanting to pre-order the report please contact me.  

Leeds Building Society is the latest lender change their minimum lease term requirements.

In a change that would be easy to miss here is the old and new wording:

Old wording : Mortgage term plus 40 years.

New wording : 85 years remaining from the start of the mortgage.

Wednesday, 2 December 2015

CML Lenders' Handbook Amendment for Mortgage Credit Directive

The CML will be publishing a change to the Handbook on 1 February 2016. as a result of the Mortgage Credit Directive. 

Additional wording in clause 10.2 is to be introduced to reflect the mortgage credit directive and concepts of binding offer and reflection period. The wording allows for the conduct of the borrowers agent (in this case, the conveyancer) to act as the acceptance of the mortgage offer on the borrowers behalf, by submitting a Certificate of Title (COT) to the lender.  This will allow the lender, in the case where the lender does not require the borrower to formally accept the mortgage offer, to have evidence of the acceptance by virtue of the COT being submitted; it also indicates that the borrower has bought the reflection period to an end.

This change is in conjunction with clear explanations in customer literature by lenders about accepting the offer and the reflection period; and a proposed change in the Approved Certificate of Title for E&W which reflects the wording in the Handbook.

Section 10.2 is due to change to : We shall treat the submission by you of the certificate of title as confirmation that the borrower has chosen to proceed with our mortgage offer and as a request for us to release the mortgage advance to you. Check part 2 to see if the mortgage advance will be paid electronically or by cheque and the minimum number of days notice we require.  

Law firms need to start thinking about adapting their Terms and Conditions in light of pending Handbook change.