Eddie Goldsmith

Goldsmith Williams

At the moment there seems to be a number of mortgage products offering so-called ‘free’ legal fees. This is something of a misnomer as more often than not, the lender is paying for its own lawyers and not the borrower. It is hardly surprising therefore that the borrower is not being charged any fees – that is because they do not have a lawyer and no services are being carried out for them.

In addition, of course, the lender’s solicitor will have no duty to the borrower and therefore will not feel obliged to speak to either the borrower or the intermediary.

This can lead to frustration on the part of the borrower and the intermediary – particularly when chasing completion dates. I know from a number of brokers we deal with that they will not use ‘free-fees’ for that very reason.

In addition the lender’s lawyers will not be under any obligation to collect arrangement fees and we all know what happens when borrowers have a choice whether or not to pay a fee at the end of the case.

Caroline Havers

Salans

There is no problem with this type of service providing the solicitor acts not only for the lender, but also for the client. This will enable the client to get legal advice from the solicitor on the title of the property and protection from the solicitor’s private insurance cover. This is completely different to remortgage ‘free-fees’ deals, where the solicitor acts only for the lender.

With a panel of solicitors, lenders can monitor quality, turnaround times and customer care far more effectively than a client with a one-off transaction can. Thus the potentially high volume of work helps to ensure that the panel of solicitors offers a good service but it should always be open to a client to choose the solicitor themselves.

Intermediaries will need authority from their clients to discuss the case with solicitors, but once obtained, regular contact between solicitors and intermediaries is often beneficial as they can help in sorting out difficulties that arise from time to time to smooth the process.

Simon Jones

Savills Private Finance

Free conveyancing offered by lenders is attractive to those remortgaging as it keeps costs down. Generally there is not a problem with this – it is not a sub-standard service as it is in the lender’s interest to get the conveyancing done relatively quickly. In remortgaging cases, this usually takes no longer than a month.

Most lenders constantly review their panel to ensure it is working effectively and replace solicitors who are not up to scratch. Some lenders also offer a choice – Halifax has a choice of two or three solicitors on its panel while other lenders choose to tie in direct with just one.

The service tends to be pretty slick but if problems do arise most brokers have a system in place for resolving disputes with the lender. It is vital this works effectively and picks out the exceptions to the rule where things go wrong.

I do not think it is necessary for the broker to be able to contact the legal firm directly because the lender should be able to mediate.

Andrew Montlake

Cobalt Capital

I find the biggest problem in situations like this is actually being able to make contact with the solicitors and finding out who has ownership of a particular clients case.

Technology means lenders can get an offer out quickly but when the transaction reaches a solicitor it slows down. If a lender has a deal with a particular solicitor and put large volumes of business along this route then very often the legal firms seem to lose sight of the client who becomes just another number.

It would save a tremendous amount of time if we could get in touch with the solicitor directly. They seem reluctant to allow us to do this, probably because they are afraid that they would get a constant deluge of calls from brokers wanting to know where their client’s paperwork has got to.

However, if they did not take on so many cases in the first place there would not be the time delay.

Furthermore, if the lender is genuinely chasing up the solicitor on the brokers behalf they should already be receiving a deluge of calls anyway.

Either the solicitor needs to have the number of cases restricted or the broker needs to be empowered to chase up the legal firm on the clients behalf.

Tony Swift

Barnetts Solicitors

The idea that the service borrowers receive from ‘free-fees’ legal packages must be sub-standard just because it is free is misguided for a number of reasons.

This argument ignores the fact that to be taken seriously a conveyancing operation will need to make substantial investment in technology and customer satisfaction procedures to satisfy the lender’s criteria.

Typically, lenders will insist that their borrowers and advisers have access to view the progression of their case via online case-tracking.

In the modern market intermediaries along with their clients are the bedrock of a conveyancer’s business. It is vital to build positive relationships with intermediaries and they should have the facility to contact a lender’s legal firm. Speed of completion from release of offer and levels of customer satisfaction are two of the major factors by which conveyancers operating ‘free-fees’ packages are measured.

The trick is to evolve a case management system that can blend these aspects with the need to keep the borrower’s adviser informed. Online case-tracking is a very powerful tool in achieving these goals but its success does hinge upon the law firm providing information which is meaningful, up-to-date and in plain English.