Fair Exchange?
Introduction of the new Lender Exchange system, by which solicitors’ firms will be admitted to certain mortgage lenders’ panels, is now set for mid to late May, as the company operating the system seeks to co-ordinate suitable terms and conditions across each of the UK jurisdictions.
Lender Exchange is intended to enable solicitors to apply for membership of participating lenders’ approved panels via a single registration process, rather than by separate application to each lender. It will be operated by a private company, Decision First, which will charge firms an annual fee to use the system.
Last month, the Law Society of Scotland wrote to all conveyancing firms expressing concerns at the terms and conditions of membership of the system, which had not been made generally available.
The letter also suggested that the Society already held all the information lenders required, and the system would impose an unnecessary cost and administrative burden on individual practices.
Speaking to the Journal, however, Justin Parkinson, managing director of Decision First, argued that Lender Exchange would be a big improvement on the present position.
“The simple idea around Lender Exchange is that there is too much duplication for law firms,” he commented. “All the lenders ask for broadly the same information in panel applications and it just seems a nonsense to us.”
Applying through Lender Exchange would facilitate the capture of information in a single portal that all lenders can rely on, with the right depth of detail.
Parkinson maintained that the Society’s data is neither detailed enough, nor provided in a format that lenders can easily work with.
Questioned on the level of charges, Parkinson responded that firms would save money through only having to pay one charge that would cover all participating lenders. “Santander charge a £199 application fee, and then an annual £99 membership, and that’s a charge per office,” he said.
“Our fee is a single charge for the whole firm, based on the number of partners, members or directors.”
Costs and charges
As in England & Wales, charges are applied on a scale ranging from £285 plus VAT for a sole practitioner, to £995 plus VAT for firms with more than 50 partners. Asked why they appeared to be disproportionately large for the smallest practices, Parkinson replied that Decision First needed to cover the costs of the actual work done.
“With a firm of more than 50 partners, we carry out the anti-money laundering and credit checking against the 10 most senior partners, as they control the firm and carry the can,” he explained. “Looking at it practically, you should compare the cost against what you would be paying otherwise.”
As explained on the website www.decisionfirst.co.uk, Lender Exchange does not remove a lender’s costs, since they still manage all panel decisions themselves, but it does minimise the overhead of maintaining up-to-date information and the validation checks undertaken, much of which is duplicated at present.
Without it, lenders would see significant cost increases in maintaining their own panels.
Parkinson maintained that lender decisions will be “less arbitrary” with the standard information to hand – and gave an assurance that lenders would not have access to the decisions reached by others regarding a particular firm.
He had progress to report one issue that the Society was concerned about. Decision First’s terms and conditions currently impose English law and the jurisdiction of the English courts, and it had been thought that it would be impracticable to operate under different governing laws but, having taken further advice, he believed these issues can be resolved.
It is possible that, by the time this article is published, a further announcement will have been made confirming the position, and also the revised target start date.
For more information, check out www.decisionfirst.co.uk/faq
In this issue
- Scottish banknotes: an uncertain future
- Abolition of all guardianship and mental health laws?
- Attack vectors into the law: phishing
- End of the loan?
- Estate handling, Irish style
- Reading for pleasure
- Opinion: Fiona Woolf
- Book reviews
- Profile
- President's column
- User feedback sees results
- Court reform: does it add up?
- Diverse perspectives
- Countdown to the devolved taxes
- Rewards for the virtuous
- Moving times
- Profitability north and south of the border
- Silence is golden
- Risk assessments and OLRs
- One for the board
- Reshaping history
- Good linking
- Scottish Solicitors' Discipline Tribunal
- People on the move
- A happy marriage?
- Fair Exchange?
- Premium result
- Clients: on good terms?
- Teasing out Taylor
- The law - it's just mental
- Gold dust data
- Ask Ash
- Pritchard Trust applications invited
- From the Brussels office
- Law reform roundup
- SYLA does EYBA - proud