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Conveyancing Association unaware of problems with free legals

  • 31/08/2017
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Conveyancing Association unaware of problems with free legals
The Conveyancing Association was unaware of the severe issues surrounding free legal services, but has suggested panel managers or the market contraction could be to blame.

The sector has been beset by problems over the last year with brokers reporting poor service standards and home buyers missing completion dates by several weeks and facing out of date redemption forms.

For example, two of the Conveyancing Association’s members (Breeze and Wyles, and Schulmans) have been hit hard with issues within their respective free legal services operations.

As a result, major lenders including Nationwide and Leeds Building Society have taken significant steps to direct customers away from using free legals.

However, in an exclusive interview, Conveyancing Association director of delivery Beth Rudolf told Mortgage Solutions she was unaware of the issues and surprised to be hearing about them.

“I’m not in practice anymore but I haven’t heard specifically about that,” she said.

“I’ve got a meeting with our members coming up and I can certainly ask them what’s causing this.

“It’s certainly something that we would want to help with,” she added.


Panel problems

Rudolf suggested that issues could be coming from panel managers and the low fees paid, or as a result of the contraction taking place in the conveyancing market.

“I know several of our members deal with volume remortgage and in the past the biggest problem is where the free legal service has been managed by particular panel managers and there’s an issue with the fees being paid; that there’s very little resource available to deal with them,” Rudolf continued.

“However, where they have these panel managers they have these very tight service level agreements where solicitors are penalised where they don’t meet those service levels.”

She added that conveyancing codes of conduct were very clear about how firms should run their businesses: “The codes of conduct all say that you shouldn’t take on work you’re not resourced to do.”


Remortgage surge

With the potential for reviews and recommendations of conveyancing firms to be published nationally it is possible this will act as a further encouragement to firms to not over-stretch themselves.

The issues will be raising concerns as the mortgage market approaches a hectic 18 months with £350bn of product maturities due, with £35bn due in September and October alone.

However, despite many people leaving conveyancing since the credit crash, Rudolf believes the industry is aware of the imminent remortgage boom and its staff shortage and has been preparing for it.

“Getting experienced qualified people back in the profession is hard, so the CA has produced training packages and we’re looking to produce an interim one to bring people up to speed much more quickly and safely,” she said.

“Our academy was set up to produce a new stream of well-educated experienced conveyancers who are able to stem some of this problem – that wasn’t necessarily focused around remortgage but around the general understanding that we quickly needed to replace all of these people who had left.

“And when you look at the law firm trade press there’s always many more adverts where people are trying to staff-up in preparation,” she added.


Good relationships

With all the problems over the last few months, relations between many in the mortgage industry and conveyancers have become strained, but Rudolf was keen to emphasise that conveyancers are keen to maintain a good rapport with the industry.

“Conveyancers will always want a good relationship with brokers, particularly when it comes to remortage, because that’s very much a one-on-one relationship with the customer,” she said.

“Conveyancers don’t really get to speak with the borrower until the last minute once the mortgage offer is on its way, so the mortgage broker is a massive help in chasing things up or if there needs to be a bit of hand-holding for borrowers.

“We really support those relationships, and with the lenders any conveyancer runs scared of upset[ting them] because they are afraid of being taken off their panel. “This is very much why we work so hard with our lenders to find out why there maybe issues of unintended consequences from a policy,” she added.


Tech investment

Technology is seen as one way to improve the conveyancing process and Rudolf and the association believe it can make a significant difference to the sector.

Although Blockchain is not seen as the be-all and end-all for improving the process, Rudolf suggests it is a key building block in a wider technological overhaul.

“The real issue is that unlike Fintech, Lawtech has been very underfunded, because there’s not a huge amount of money sloshing around, particularly in conveyancing where it’s so commoditised and the margins are so low,” she said.

“But just by looking how the process is done you can immediately see there are massive duplications throughout the process that could be avoided. The classic example is National Estate Agent Association’s declaration questionnaire which has 51 duplications with the Law Society one to be filled in for the conveyancer.”

Bringing these duplications together early on and then presenting the relevant information in a practical way that most influences buyer decisions would further help the process.

However, Rudolf warns there are some firms holding developments back.

“Most of our members are extremely keen on technology, the difficult thing is trying to get hold of case management systems that can support [it] and are willing to,” she said.

And all this must be combined with lender legacy systems, she added.


Leasehold feedback

The association is also preparing its submission to the government’s consultation on leasehold practices and wants to encourage brokers to contribute their feedback from market and client events.

It is raising several key points and has highlighted that the government’s action is too focused on new build properties and does not consider potentially exploitative existing leasehold arrangements.

“As leasehold administrators become more savvy and as the leasehold has become an asset class of its own, those people buying up freeholds will be looking for all manner of ways to charge extra fees,” she concluded.

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