Lend a hand

All conveyancers seem to agree: a single application process for lender panel membership could cut costs, time and generally save hours of administrative headache. Lenders officially came up with Lender Exchange last autumn, a central repository where law firms will be able to provide one set of details in one place for all member lenders. The reaction has been almost unanimously one of suspicion.

There is, at present, no unified process for panel applications. Smaller lenders usually ask for a handful of questions about firms’ claims records, the answers to which can be provided within an afternoon. Larger ones ask for detailed indemnity insurance reports and processes.

Some make membership of the Conveyancing Quality Scheme a pre-requisite. In some cases, you need only fill one application for all your offices, in others an application must be made for each of your branches.

Then there are less easily quantifiable factors. Some lenders will not consider your application unless and until one of your clients takes a mortgage with them. They may also make it a condition that you undertake a minimum number of transactions every year if you want to remain on their panel. This may be unfair but it’s entirely legitimate and within their rights.

Still, the result is a complicated, time-consuming and hazardous process.

Lender Exchange, which is due to go live imminently, seeks to address the complications and inconsistencies in the application process.
A joint venture between First Title and Decision Insight, it will act as a single application point for all lenders that have signed up to it. So far, only three have: Lloyds Banking Group, RBS and Santander, but there is apparently interest
from others.

Unfortunately, little is known about how the scheme will operate in practice. The current Lender Exchange website is a list of FAQs. These provide a useful starting point but nowhere near enough detail for conveyancers to draw up an accurate picture of the scheme.

Secrecy is not a good approach when trying to secure the support of key partners. It has led to concerns over membership criteria – at this stage, lenders will continue to apply their own, but the exchange could be a catalyst for more mercenary behaviour. And it could be that Lender Exchange has bigger ambitions, such as to become a single e-conveyancing portal.

Whether lenders would actually want to take on that risk, this prospect is making some property lawyers uneasy. It could turn the dynamics of the sector upside down, and has set CML, who is facilitating discussions between Decision First and the Law Society, on a collision course with Chancery Lane.

Offers by the Law Society to share CQS
data with lenders free of charge have been
met with counter-offers by Lender Exchange
to help Chancery Lane with running CQS
more efficiently.

Already some lenders are holding some firms to ransom over tough panel membership conditions. At least it is possible to have a relationship with lenders. Applying via a third party pursuing its own commercial interest could bring about a different culture detrimental to a cooperative culture between stakeholders.