Closed panel lenders?
Should mortgage companies be able set the requirement to use a closed panel of solicitors as one of the criteria for obtaining a loan from them?
I have a cousin who has his own legal practice in my area and there are a significant number of partners, enough there for any lender to allow them to be used.
Some BTL lenders give you a list of about 10 solicitors firms that they insist you must use to have a loan with the company.
So instead of instructing my cousin, which would cost me about £800 per purchase, I am given a list of solicitors I need to use to complete the purchase. These solicitors are given a fixed fee they must charge, by the lender. The cost is then hiked to about £2700 per transaction.
Feel this is the making of a cartel, but unsure of the contract law behind thee transactions.
Has anyone else run across this as an issue or have any advice?
Many thanks
Wayne
3 comments on this article
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Member Since February 2011 - Comments: 3462 - Articles: 286
4:58 PM, 29th May 2019, About 7 years ago
Hi Wayne,
Have you got a copy of the lenders criteria as it used to be at the lenders I worked at many moons ago based on having enough solicitors to cover if one is off?
If your cousin’s practice fits criteria you could try making a complaint, but they may then be iffy about your cousin actually working on the case.
Member Since October 2016 - Comments: 189
4:22 PM, 30th May 2019, About 7 years ago
Hi Wayne
I have used mortgage companies’ panel solicitors and despite my initial reservations I have found them to be both efficient and no dearer than my own solicitor, in fact on some occasions the panel solicitors have been cheaper. I have just done a remortgage with Aldermore and legal fees were included.
If your lender won’t let you use your own solicitor I suggest you challenge the fees; the difference between £800 and £2,700 is not to be taken lightly, so a like for like comparison needs to be done. They may, however, just say it’s a commercial decision and any kickback from the lawyer to the lender is allowed for in the overall package.
Member Since June 2019 - Comments: 1
1:28 AM, 1st June 2019, About 7 years ago
Reply to the comment left by Graham Bowcock at 30/05/2019 – 16:22
I understand the solicitors actually pay the lender to be on the panel. Not a bad little earner for both the solicitor and the lender.