Rockstead UK, a due diligence, oversight and compliance consultancy, said this had led to significant problems for verifications on behalf of portfolio purchasers.
In some cases Rockstead has found solicitors, who acted for both lender and purchaser in the property transaction, had not registered the lenders interest in the title correctly.
However, a bigger issue is lenders not in possession of the deeds at all and only becoming aware when the loans are being sold.
David Guinane, country managing director – Ireland at Rockstead UK, said the system was put under serious strain during the boom years, leading to a serious backlog in registering the deeds.
“Lenders did not give this issue the priority it deserved as they were focussed on driving volumes,” he added.
Most lenders compounded the problem by outsourcing title deed storage to third parties increasing their reliance on third parties’ management controls.
Guinane said: “We have seen examples where deeds have never been received since completion, or have been lost and the lender is simply not aware of the issue. We have also found problems with legal title and some evidence of fraud. The most basic of systems control could have mitigated or solved most of these issues.
As a result, Rockstead has built a new service – ‘Remediation of Title Deeds’ and is working with recent purchasers of portfolios to report on missing information or lost deeds packs. This work includes following up with solicitors, title deed insurers and other interested parties to discover the whereabouts of the deeds and to ensure their safe return to the purchaser.