Hodge Conveyancing Panel Information

In operating open conveyancing panels, lenders such as Hodge face a number of fraud and negligence risks. While there is no authoritative source of data on lender exposure to solicitor–led mortgage fraud, anecdotal evidence from lenders indicates exposure on individual cases are often in the millions of pounds. The National Fraud Authority estimates that £1bn per year is lost in mortgage -related frauds in total, which is seen as a conservative estimate.

These risks are exacerbated by the lack of a comprehensive set of data on all conveyancing firms (which, for the avoidance of doubt, would include solicitors and conveyancers across the UK) which is in a readily accessible format. Currently, lenders vet the suitability of their panel firms against a variety of disparate, incomplete and potentially inaccurate sets of information. One top 5 lender pointed out to us that it is almost impossible to track individual fraudsters who move from firm to firm, especially where they are no longer registered or no longer hold a valid practicing certificate.

Hodge and other lenders are in varying stages of reviewing their approach to vetting firms on their conveyancing panels, to ensure their ongoing exposure to unsuitable firms is reduced. There is also regulatory impetus on lenders to ensure that they have satisfactory oversight of their third party panels, including a due-diligence process.

During 2013, 0 sections of the UK Finance Lenders’ Handbook P2 were changed by Hodge. Some changes are more important than others but as a firm on the Hodge conveyancing panel you are of course obliged to comply with individual lender requirements, as set out in Part II of the UK Finance Lenders’ Handbook. Locktons have recently pointed out in an article that non-compliance with Part 2 requirements account for a number of high value claims, and it is therefore important to be aware of any particularly onerous terms that an individual lender may impose.

Remember: CML requirements are not guidelines; they are the lender client’s instructions.

You will be aware of the trend in recent years for lenders such as Hodge to take a much more pro-active approach in relation to the management and make up of their conveyancer panels. The knock on effect of this is that it is more likely that there will be a higher number of cases where a conveyancer is not on the Hodge panel. The situation that you find yourself in is where your client’s purchaser has his/her own lawyer and Hodge have appointed a separate lawyer to act on their behalf where the new CML Part 3 requirements apply. Section 11.1 of the UK Finance Lenders’ Handbook Part 3 requires Hodge’s panel solicitor to ‘ ...transfer the mortgage advance directly to the Seller’s conveyancer. The Seller’s conveyancer must be required to hold the mortgage advance on the terms of the required undertaking. The example borrower’s conveyancer’s undertaking letter includes a specific example of the seller’s undertaking’. You should expect to be advised to received the mortgage advance directly from the conveyancing solicitors for Hodge. You will no doubt be required to undertake directly to Hodge’s solicitors to discharge any charges secured on the property and to send directly to them the executed transfer and any other documents required to enable us to effect registration. Please remember to carefully consider undertakings in accordance with your firm’s protocol and record them in your undertakings logg. Please remember that as well as this breach of this undertaking having regulatory and compliance implications it’s breach could also result in your firm being removed off the Hodge conveyancing panel.

Hodge approved panel lawyers have to comply with the Part II instructions relating to Transfer of Equity. These are set out in Section 16.3. First, your firm must approve the form of Transfer of Equity (which should be in the Land Registry's standard form) and, if Hodge require, the deed of covenant on their behalf. You will need to check Hodge CML Part 2 conditions to see if Hodge have standard forms of transfer and deed of covenant. Please note that this requirement can change from one transaction to another so do check! Second,When drafting or approving a transfer, you should bear in mind that: although the transfer should state that it is subject to the mortgage (identified by date and parties), it need give no details of the terms of the mortgage; the transfer need not state the amount of the mortgage debt. If it does, the figure should include both principal and interest at the date of completion, which you must check ; there should be no statement that all interest has been paid to date. Further obligations are set out in the UK Finance Lenders’ Handbook which have to be followed by all firms on the Hodge conveyancing panel

In this situation please clarify on the application what steps you have taken to discover the reasons behind cancellation of your Hodge panel membership. In particular please provide details if you have received communications from the lender. E.G. before termination of your panel membership did you receive any letters or calls from the lender advising you as to their reasons?

You need to communicate with Hodge to obtain standard documents. The The Council of Mortgage Lenders Handbook contains an individual section for lenders to enumerate who to contact to obtain standard documents. Hodge in their Part 2’s state: It is likely that you will need to disclose your Hodge solicitors panel number.