HSBC has decided to drop its controversial requirement that homebuyers use one of a panel of just 43 firms to do the bank’s legal work following a string of complaints from customers and lawyers.
From August, the bank will allow all members of the Law Society’s Conveyancing Quality Scheme (CQS) to act for it and the borrower in the conveyancing work needed to buy a property, increasing the number of firms consumers can choose from by more than 1,400.
Since January, mortgage borrowers with the bank have been forced to instruct one of a panel run by Countrywide to act for the lender. They have had the choice of instructing their own conveyancer too, but some who have done so have reported delays, and there have been stories of solicitors refusing to work with the bank’s panel.
Following the change homebuyers will have three options: they can still use one of the panel for their own and HSBC’s legal work and pay a fixed fee for the service; they can use one of a larger panel of firms which have the CQS mark but can set their own fees; or they can still instruct two solicitors – one to represent them and one the bank.
The panel of accepted solicitors was introduced in response to rising levels of mortgage fraud, and followed decisions by other lenders to restrict the number of conveyancing firms with which they were happy to work.
In a joint statement, the Society and the lender said they are in the final stages of agreeing the processes for ensuring that the bank’s systems incorporate CQS firms. So far, just over 1,600 firms across England and Wales have CQS. The Law Society is dealing with around 360 applications.
The new process will be piloted through a small number of HSBC branches from 14 August and extended across England & Wales on 29 August 2012. Only new customer applications completed on or after 29 August will make use of the new arrangements, although HSBC will make customers who are applying for a mortgage shortly before this date aware of the change.
HSBC are also instigating a training programme for all front-line staff to ensure they understand the new option and how to communicate it to customers.