Although I stepped away from legal practice early last year, I’ll never stop caring about what’s happening in the world of conveyancing day-to-day.
And so it was with interest I read a recent post, and series of replies, in the BLG Bulletin from lawyers facing issues on the day of completion in receiving money from the bank, as well as sending funds Held to Order the day before completion. There was a conflict in responses concerning whether the answer to this question was acceptable, with no definitive answer being provided by either the regulator or an industry body.
It’s no surprise to all involved in a conveyancing transaction of the knock-on effects caused to individual consumers as well as the whole chain (if there is one) by a delay in the payments system. This is what triggered the question above being asked, to find a solution to combat the problem.
There has to be a better way
What if we had a guarantee of the date and time mortgage funds would be released? At the very least, this would mean we wouldn’t need to:
- Follow up lenders prior to completion to ensure they’ve received the COT and that funds will be released
- Keep refreshing our ledger on completion date, or chase our finance colleagues to confirm if funds have been received
- Contact lenders on completion day to chase funds, if they’ve not been received, or feeling in a state of limbo if the advice is that funds have been sent, but not yet received
- Claim and allocate funds to a file when they do arrive, and then send them on to the other side’s firm
- Manage the calls and emails that will undoubtedly come from the client, agent, and the other side wanting to understand whether completion will be effected
There are already ways to mitigate risks today
Some firms do set up their files the day before by ordering mortgage funds the day before completion in the hope that everything will occur seamlessly the next morning, without delay. Of course, not all firms operate in the same way so there could still be delays across the chain, and this is compounded by the uncertainty that pervades the current payments system regarding when funds will actually be received.
A vision for the future
PEXA has started to streamline this current process with the introduction of our payments system, PEXA Pay, which was built in conjunction with the Bank of England (for further information about this, see this article by my colleague, Russ Albert) and is currently being used by our customers to complete remortgage transactions.
As we expand our product offering to include a sale and purchase solution, our hope is that by guaranteeing the date and time mortgage funds will be released will make inroads into easing some of the pain points currently experienced in the funds transfer process, both for firms and their clients.
This article was submitted to be published by PEXA as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.
