Buy to let lenders tighten up on mortgage fraudMake Text Bigger
Buy to let mortgage lenders are barring legal advisors who have not signed up to the new Conveyancing Quality Scheme (CQS) from acting for them.
More than 700 legal firms have joined the CQS scheme – and mortgage lenders are making membership a condition of acting for them for every buy to let purchase.
Property investors who want to opt for another lawyer outside the scheme will face their purchase blocked by lenders. Cash buyers are not affected by the ban.
From May 2011, the Law Society is starting an advertising avalanche urging landlords and homebuyers to check if their conveyancer is a CQS member – and if not, to choose another firm.
CQS is the result of the Law Society tightening controls on conveyancers after police inquiries highlighted that many mortgage frauds involved legal professionals to falsify documents to lenders and the Land Registry.
Dozens of lawyers have faced a reprimand or have been struck off for their involvement in mortgage frauds over the past two years, confirms the Law Society.
Law Society president Linda Lee said: “In our ongoing talks on the wider issue of membership of mortgage lender panels with the CML and major lenders, it is clear that there is support for the CQS. Not only will it help deter fraud, it also drives up practice management standards and provides a beacon of quality for home buyers.”
The Council of Mortgage Lenders (CML) has also confirmed banks and building societies will not instruct conveyancers outside the scheme.
Michael Coogan, director general of CML, said: “The CML has worked closely with the Law Society as it developed CQS to ensure conveyancing standards are improved for consumers and lenders alike.
“Any conveyancing firm which wants to continue to act on behalf of lenders should expect the CQS to become an important new criterion for panel management, and expect to be asked by their clients whether their firm has been accredited.”
Lawyers registering with CQS undergo staff identity and financial checks, while the Law Society will carry out random visits to assess standards are maintained.
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