The Pandemic-Induced Panel Cull, according to research
Research by a peer-to-peer lending platform Sourced Capital has found that the UK property market could see a double-digit rate of property value decline, with the market taking over five years to recover, while the number of property repossessions could also soar as a result of a COVID-19 induced recession.
It is too early to know if we are about to return to the late 80s with huge repossession numbers or whether lenders actually take a more pragmatic view. It would seem that even the more optimistic of commentators expect the repossession market to re-emerge.
If such a prediction comes to pass it will be destructive for conveyancing firms.
Lenders will not swallow their losses happily. For conveyancers, that means a tsunami of file reviews because lawyers are an easy target for a lender looking to offset a loss – or pass it on altogether. Any failure by the lawyer to comply with the letter of their mortgage instructions – typically based on the lenders’ handbook – will be pounced upon. It’s possible that history will repeat itself. In 1997 the Law Society declared that solicitors were left to carry the can when things went wrong, with lenders behaving like “ravenous wolves” when pursuing claims through the courts.
Firms will be removed from lender panels or fail to find a PI insurer, which amounts to the same thing. The net result is fewer conveyancing law firms. Strong risk assurance embedded in a firm’s everyday practice can put those worries to rest.
Ask yourself whether you have ever considered a pre-lender compliance audit. Many firms make enormous efforts to ensure their client Ts and Cs and website copy are compliant, but don’t take the trouble to check on lender compliance. Yet the consequences for a firm tripping up on lender Handbook requirements can be fatal to a law firm.
It’s not just about peace of mind. A lender compliance audit can bring real value to your firm. A third-party firm acting in the same way a lender would can uncover issues and knowledge gaps that you can address to make your conveyancing processes more rigorous.
In this day and age of increased accountability and regulatory requirements, audits should be welcomed, not feared. If you’d like to find out more about how Lexsure’s lender compliance audit can assist your firm please contact [email protected].
Kindly shared by Simon Seaton, non-practising solicitor
Main article photo courtesy of Pixabay
