Goldsmith: “Distinct possibility” that other lenders might follow
A new buy-to-let lender, Fleet Mortgages, has created the first law firm panel made up only of members of the Conveyancing Association (CA).
Eddie Goldsmith, chairman of the CA, told Legal Futures it was a “distinct possibility” that other lenders might follow suit and he had held “preparatory talks” with a number of them.
“Limiting the number of law firms in this way means that lenders know who they are,” Mr Goldsmith said.
“It may well be that Fleet decides to extend its panel as and when it is appropriate to do so.”
Mr Goldsmith said that over 30 of the CA’s 53 member firms were on the panel of the new lender, based in Fleet, Hampshire.
He said “no lenders” were interested in setting up open panels any more, and the two options were setting up a very restricted panel of a handful of firms, or a larger “controlled” panel.
Bob Young, managing director of Fleet Mortgages, said: “We have taken the view that a small controlled legal panel is the best option for us, taking into account our appetite for risk management and customer choice.
“I would not be surprised at all if other emerging lenders did not take the same or similar view.”
Mr Goldsmith added that Fleet Mortgages had used Lender Exchange to help set up and operate its panel. Lender Exchange was launched last summer with the backing of Santander and the Lloyds Banking Group. By October, 2,700 law firms had signed up.
The Law Society and Decision First, which operates Lender Exchange, have so far failed to reach agreement on the relationship between the Exchange and the society’s Conveyancing Quality Scheme (CQS), despite lengthy negotiations.
Meanwhile, Nationwide said last week that from this summer all conveyancing firms on its panel must have CQS.
Jonathan Smithers, vice-president of the Law Society, said CQS provided a “recognised quality standard for residential conveyancing practice and has created a trusted community”, helping to deter fraud and drive up standards.
Just to clarify on the Nationwide point, the CQS membership requirement applies only to SRA-regulated firms. Nationwide have confirmed there is no change for CLC-regulated firms.