HSBC MORTGAGES - solicitor choice restricted.
ARTICLES AND FAQS
Some of the things people ask and problems they have, with our comments and answers.
What's this about?
HSBC announced on 6th January 2012 that it would in future only instruct 43 solicitors in England & Wales to act for them in relation to residential mortgages.
So how does that affect me?
If you are buying a house or flat you generally choose a solicitor to act for you in the purchase and in most cases the lender, actually a separate client, would appoint your solicitor to act for it. This helps keep down costs and timescales.
A bit more background to this is explained at the bottom of this page.
HSBC have just radically changed the position for buyers having their mortgages. (This does not apply to their subsidiary First Direct.) Read on....
What will happen now with HSBC mortgages?
A buyer has a stark choice:
- Instruct one of the 43 firms who can act for HSBC also to act for them in buying the property; or
- Instruct the solicitor the buyer wants to use and accept the additional cost and delay; or
- Decide to obtain their mortgage funds from another lender who will not restrict solicitor choice in this way
Pros and Cons of the choices
A. Use one of the 43
Pros
- Possibly cheaper - HSBC have told their panel members what to charge. We do not know yet whether they will add on Extras
- Possibly quicker.
Cons
- Choice of solicitor for buyer very heavily restricted.
- May not be one local to you where you can pop in to see someone and sign documents.
- They could be national "call centre" type operations where files are "processed" and the level of advice given to the buyer could be minimal.
B. Use your choice of solicitor
Pros
- You get to choose who advises you about your purchase, where you can feel confident that issues will be explained.
- Can be local to you.
Cons
- Extra cost. HSBC's solicitor will charge £192 for checking what we do.
- Extra delay while they ask unnecessary questions and cause unnecessary correspondence which wastes your time and ours.
C. Use another mortgage lender
If it is a major national lender - then none of the above hassles.
Background
A lender can choose which solicitor it uses, but the large "High Street" lenders have "panels" of solicitors who can act for them that include most firms in the country. We are on most of the important panels. Some lenders have a more restricted "panel" and that is why we always ask people filling in our Get A Quote form to give us the names of the lender or lenders they are considering so we can check that we can act for lender. If we cannot act for your lender we will tell you when we contact you.
If we cannot act then we have to wait until we hear from the lender's own solicitor (which will be several days after the mortgage offer has come out) and then deal with their requirements and you will have to pay their solicitor's costs for checking what we do. Typically at least 14 days will be added to the time the transaction takes. We do not like losing business to competitors, but we feel a duty to point out to potential clients the extra cost and delay to them in not using a solicitor that their lender will instruct.
However this issue has only applied to some of the less well known lenders and if we cannot act there is generally a reasonable choice of other local firms who can act for your chosen lender. HSBC have severely limited your choice in this respect.
Have a look at this thread: http://forums.moneysavingexpert.com/showthread.php?t=3755857 and http://forums.moneysavingexpert.com/showthread.php?t=3840017 where there are recent comments on what is happening about this.
Copyright: Richard Webster & Co 2010
Richard Webster & Co 30 Leigh Road Eastleigh Hampshire SO50 9DT
Comment about HSBC mortgages and solicitor choice.
Page Last Revised 12/04/12