In a statement this morning HSBC and the Law Society have jointly announced changes to the much criticised limited panel arrangements that have been in place since early 2012, which saw an initial panel of only 43 firms on the HSBC panel.
Giving significant support to the Law Society Conveyancing Quality Scheme (“CQS”), HSBC are allowing every CQS firm to act on a joint representation basis and set their own costs. We understand this will come into force in August 2012.
From early this year consumers only had a choice of a fee for separate representation or choosing one of a small limited number of firms on a fixed fee scale.
All CQS firms will be able to act for HSBC. From the outset, CQS-accredited sole practitioners will be able to handle all cases with mortgage values up to £150,000. The Law Society and HSBC will continue to work together to raise this value for CQS sole practitioners.
Recognising the merit in some of the different requirements HSBC currently has for its panel, the Law Society has invited HSBC to assist it in further developing the CQS assessment scheme so that it becomes the automatic requirement for a firm to join a mortgage lenders conveyancing panel. HSBC has suggested the Law Society consider inviting other mortgage lenders to assist the Law Society in this respect, a proposal the Society was delighted to accept.
Martijn van der Heijden, Head of Lending at HSBC commented:
“We introduced our panel in January to provide additional protection for both our customers and the bank. We listened to feedback from customers and solicitors, and through working with the Law Society can now agree to more solicitors acting for us while also managing our risks and maintaining the unique benefits of using one of our panel solicitors.
“We are committed to helping our home-buying customers and have set aside £15 billion to lend in residential mortgages this year.”
Law Society Chief Executive Desmond Hudson said:
“With this move HSBC is demonstrating its commitment to putting customers first as well as its confidence in the CQS scheme. The bank has been constructive in working with the Law Society, in designing this solution. As well as giving its customers a much wider choice of solicitor that can also act for HSBC, it has aligned itself further with the CQS and the high standards the scheme represents.
“The Law Society and its members have campaigned for this change in the interests of solicitors’ home-buying clients since HSBC introduced its original panel. HSBC’s willingness to engage with us has helped secure a good outcome for their mortgage customers, our CQS members and the house buying public.”
Under the new system, HSBC mortgage customers will have three options when appointing a solicitor or conveyancer.
Option 1 ("the managed panel”) will be using one of the current managed panel firms: conveyancers who can act for the bank and the borrower and who have signed up to offering fixed fees and other guarantees including no sale, no fee.
Option 2 will be to use CQS members who are not on the managed panel. CQS members will not be obligated to commit to the fees set by the bank, or purchase a technology link to the Bank’s panel manager
Option 3 remains available for borrowers who wish to choose another firm of solicitors or conveyancers not in the two options above. In this instance, as was previously the case, the borrower will pay £160+VAT for a panel firm to complete the legal work required by HSBC.
There are currently more than 1400 CQS firms in England & Wales, will be able to act for HSBC and for the borrower.