Martijn van der Heijden, head of lending at HSBC, has addressed growing criticism of the banks decision to massively reduce their mortgage customers' choice of solicitor: “With the customer in mind, HSBC is and always has been open to having constructive conversations with the various law societies.
“We welcome all Law Society CQS accredited firms onto the panel providing they can offer our customers the benefits we have introduced including competitive fixed fees, a no sale / no fee guarantee and electronic 24 hour case tracking. ”
Van der Heijden did not address recent claims that buyers and sellers were being charged additional fees for 'extra work'.
Panel Principles and Mandatory Requirements
Firms joining the Countrywide-managed panel must follow these 'principles':
- Fixed fees
- No move, no legal fee
- Establish 'electronic links' with Countrywide. (It is unclear as to what benefit this would be to customers, but it claimed to 'facilitate case allocation and case tracking'. )
- CQS accreditation
- Solicitor Regulation Authority and CCJ checks
Furthermore, mandatory requirements include:
- Solicitors Regulation Authority (SRA) or Council for Licensed Conveyancers (CLC) regulation
- Two licensed conveyancers or qualified solicitors must belong to the firm
- Conducting sale and purchase conveyancing for a minimum of six months
- £2m personal indemnity insurance
- Not including mortgages, solicitors firms must have performed 250 conveyancing transactions within the past two years
The corporate structure of the firm must also be approved by HSBC, suggesting that ABS firms will be barred from panel membership
Will these changes benefit consumers?
The HSBC now levy an additional fee if a customer wishes to choose their own solicitor (assuming the firm is not one of the 43 currently on the HSBC/Countrywide panel).
Des Hudson, of the Law Society, argued that HSBC and Countrywide were harming consumer interest. Hudson stated that the bank's actions were taken exclusively to benefit HSBC and their partner, Countrywide.
The panel was announced in January, but homebuyers and sellers are only now feeling the consequences. According to a number of sources, the results of buying with an HSBC mortgage have included severe delays to completion, additional stamp duty costs as government deadlines were missed, and in some cases, the collapse of entire chains.
Reading between the lines, the announcements by the HSBC appear to suggest that the panel may open up to any or all Law firms meeting all pre-requisite joining criteria.
Watch this space.