Take care with Lender Exchange

Solicitors who have joined the Lender Exchange panel system in order to act for mortgage lenders should be careful to follow the correct procedure when updating their firm details via the Lender Exchange portal.

The issue was highlighted by Brian Inkster, of Glasgow and Highland firm Inksters, after he was sent an email by Lender Exchange advising that his firm had been suspended from the panels of Lloyds Banking Group and Santander, both of which require solicitors to join the system in order to act for them.

This was apparently due to failure to provide requested information, which Inkster was eventually advised that he had in fact done but had failed to click the correct “submit” button to complete the process. Lender Exchange member firms should be aware that when updating their details, it is necessary to conclude the process by pressing the button “Submit firm details”, rather than “Update firm details”.

That was not an end of the matter for Inkster, as, after correcting the omission, he was told that his firm remained suspended and he would have to contact the lenders direct to request that it be reinstated to their panels.

When he did so, however, he was, he says, “reassured by both panel administrators that my law firm had certainly not been suspended from their panels and I was to simply ignore such communications from Lender Exchange”.

Lender protection

An enquiry from the Journal to Decision First, the company that runs Lender Exchange, elicited the following explanation from managing director Justin Parkinson: “‘Suspension’ from the system does not instantly remove firms from lenders’ panels, as they are likely to have pipeline cases. Instead, the system highlights to lenders that we have had to ‘suspend’ the firm in Lender Exchange and lenders would then take their own actions. Perhaps making the firm inactive on Lender Exchange is a more appropriate phrase that we should use in the future.

“It’s important that all firms (and lenders) are protected, so it’s vital that any information, data and documents are provided at the earliest possible convenience. We impose the cutoffs for receiving annual compliance information and documents so as to give lenders a clear view of who has complied with their requirements and who has not.

“Any issues a law firm might face with the system can usually be dealt with in a brief call to the team.”

He added: “We have been discussing with the Law Society of Scotland ways in which we might be able to save their members more time and effort, and I hope in the fullness of time that we can work with the Society, its members and lenders on greater use of the smartcard to enhance the features of Lender Exchange, remove duplication and increase efficiency for all concerned.”

Parkinson said that action was being taken against about 150 member firms out of 4,800 across the UK who had either not provided and submitted any updated professional indemnity details, “or had provided them, but not submitted them” – Lender Exchange’s system being built in such a way as to allow firms to upload documents and data as “draft” until such time as they are happy to “submit” all data or amendments. He added: “The system has a banner on each screen that indicates that amendments have been made, but not yet submitted, which we believed was sufficient notice to firms to then ‘submit’ the changes and documents.”

Inkster has, however, since become aware of others who made the same mistake; and of one solicitor who was saved by emailing Lender Exchange to confirm he had updated his details, only to be told that he had not – at which point a phone call sorted things out.

Review undertaking

After the issue was taken up with Decision First by the Law Society of Scotland, Parkinson agreed that indicating that a firm was “suspended” was quite emotive, and undertook to review this with lenders.

Decision First also took the decision, following feedback and discussion with lenders, not to suspend any further firms, but to telephone the remainder to tell them they needed to submit anything they had uploaded in order that lenders did not decide to suspend them.

It will also review whether the online registration process can be amended to avoid having an “update” button next to a “submit” button.

The Society remains of the view that Lender Exchange as it currently operates imposes an unnecessary administrative burden on solicitors, having made representations to that effect since the initial proposals for the system in September 2013, as well as on its concerns about jurisdictional and data security issues. Chief executive Lorna Jack told the Journal: “We still believe that the annual fee for use of the system is an unnecessary cost, as the Society already holds the information about solicitors that lenders look for and we have openly expressed our willingness to provide this information free of charge to lenders.”