HSBC chamgig conveyancing rules

[andybos69]

A few weeks ago, HSBC apparently changed the rules on appointing a conveyancer. If you did not choose a solicitor from a pre-approved list, HSBC will charge you £160 to instruct their solicitors to act on their behalf.

As we were part way through the process, HSBC have eventually agreed to not levy this charge.

However, our solicitors are now claiming that this new method involves a lot more work for them, and are going to charge us another £95 + VAT for this work. HSBC have refused to stand this fee, as they claim that this method involves less work for our solicitor, our solicitor obviously disagrees! They are refusing to talk to each other to sort this out, and so we are left in the middle standing the charge.

Has anyone else experienced any issues with this change by HSBC, or can anyone offer any advice for how to proceed?

Thanks in advance!

[thebunny99]

I'd be interested to hear any replies on this as I'm also confused! Had an appointment last week and was told that if I did not use their solicitor I would have to pay £192!! Thankfully I had not signed and returned my solicitors contract so it may be easier to go with countrywide (who HSBC use)
Confused I emailed my mortgage advisor who forwarded me this....

How much will it cost?
For dual representation a fixed fee will be charged by the panel firms for their Legal services based
upon the purchase price of your property. This legal fee will only cover the legal work carried out by
the panel firm on behalf of you and the Bank. In addition to this there will be the cost of the
searches and other disbursements associated with the purchase, which includes charge registration
costs, telegraphic transfer fees and stamp duty. Your HSBC Mortgage Manager or Countrywide will
be able to advise you of the fixed legal fees.
Where a panel firm is representing the Bank only there will be a legal fee of ￡144, a panel
management fee of ￡30 and a telegraphic transfer fee of ￡18. These figures are inclusive of VAT
and the total is ￡192. This fee is paid by the customer in all cases where the customer uses their
own solicitor.
What exactly am I paying for when I pay for a panel firm to act for the Bank?
If you choose not to take the option of using a panel solicitor, HSBC will need to appoint its own
solicitor to complete relevant legal work, including the following:
 Reviewing the searches obtained by your solicitors to check the property has a good and
marketable title and ensure that your solicitor has acted upon anything identified within the
searches.
 Register a charge in favour of HSBC at the Land Registry.
 Ensure HSBC's requirements are met in terms of gaining the consent of other occupants of the
mortgaged property.
 Inspect the valuation report and ensure HSBC's requirements are met in relation to items
highlighted for consideration by the valuer.
 Transfer the mortgage funds directly to the seller's solicitor after obtaining an undertaking that
the seller's solicitor will utilise them appropriately.
A fee of ￡192 is payable to cover the cost of HSBC's legal work, which is avoidable by choosing to
use the HSBC panel in dual representation. Because it is avoidable, the fee is passed to the
customer (you).
Why should I pay for HSBC’s Legal Representation?
A fee of ￡192 is payable to cover the cost of HSBC's legal work, which is avoidable by choosing to
use the HSBC panel in dual representation. Because it is avoidable, the fee is passed to the
customer (you).
Will they act for a sale of a property as well?
The panel firms are all able to act on the sale of properties as well and will be happy to discuss this
further when they contact you.
They will use the same fee scale provided for purchase to provide a quote for sale purposes. This
can be referred to for indicative purposes, but would not override a quote already provided to a
customer by one of the panel firms, as is the case for a purchase quote.

[AlexSnow]

Originally Posted by andybos69

A few weeks ago, HSBC apparently changed the rules on appointing a conveyancer. If you did not choose a solicitor from a pre-approved list, HSBC will charge you £160 to instruct their solicitors to act on their behalf.

This is correct, as of earlier this month the approved list of conveyancers that HSBC will allow to represent them went from thousands to 43. Yes that is right, forty three firms in the whole of England and Wales!

Originally Posted by andybos69

However, our solicitors are now claiming that this new method involves a lot more work for them, and are going to charge us another £95 + VAT for this work. HSBC have refused to stand this fee, as they claim that this method involves less work for our solicitor, our solicitor obviously disagrees! They are refusing to talk to each other to sort this out, and so we are left in the middle standing the charge.

I'm afraid I would agree with your solicitor, before the change your solicitor would have had to do the searches, check the title on behalf of you and HSBC, advise you on the terms of the HSBC mortgage and complete a form to HSBC to confirm that this has been done and that there are no problems with the property requesting the funds.

Now, in addition to this they also have to photocopy all of the paperwork and send it to HSBC's conveyancer to check as well. In addition to this, they have to make lots of promises (undertakings) to HSBC's conveyancer so that if something goes wrong HSBC's lawyer can pass all blame back to your solicitor. Where your solicitor may have been willing to use common sense when coming across any problems with your case I would put money on HSBC's conveyancers having a checklist which if they can't tick means you can't proceed.

I'm afraid you are bound to see a delay in your purchase transaction due to this change of policy by HSBC and I would encourage anyone who is looking at HSBC as a mortgage provider consider the impact and delay it could have on their purchase.

As for the "fixed fees", if you instruct one of the panel firms to act for you and HSBC, these are so laughably low that the only way I can see them being able to provide a service is to have untrained call centre workers answering all of your inquiries and by handling so many cases that their response times for dealing with those telephone messages will be a number of days due to the volume of messages that they have to get through.

Just my thoughts, I'm sure TimmyT will be along soon to point out that you won't have a solicitor acting for you!

[chesneyoctopus]

I have also come across this. I understand that one of the panel conveyancers is Countrywide, and you just have to read the various threads about this conveyancing organisation to see what a good reputation it has.

If you have your own solicitor acting, he/she cannot send documentation piecemeal to the HSBC panel conveyancer, all documents have to be sent at once, and the panel conveyancer has three days to approve and give the green light to go ahead and exchange. Great when you are on a tight deadline!

A buyer has the right to instruct a solicitor/licenced conveyancer of their choice rather than a faceless call centre.

[pinkteapot]

Absolutely agree with the comments above. I sing the praises of HSBC's tracker mortgages which have really good terms. We took one out in July 2010. However, I would categorically not use Countrywide for my conveyancing if I was buying. Selling, I use a cheap solicitor. Buying, I use a good one. If I'm spending quarter of a million quid on a house, I want someone good checking everything out for me.

If I was buying again now, I'd add the fee for going elsewhere to the total product costs and see if the mortgage was still the best deal available for me. If it was, I'd stick with HSBC for the mortgage and pay the fee. If not, I'd get the mortgage elsewhere.

The potential delay wouldn't concern me - house purchases have so many potential sources of delay that adding one more to the list doesn't make much difference. If I was buying a repo with a 28 day deadline then I might reconsider, but for a normal purchase I don't think this is a deal-breaker.

[auroan]

I'll let you all know how it goes for me. I'm in the process of buying a property (no chain) and i've turned down the use of HSBC's panel and will be using my own solicitor.

[WestonDave]

What's also interesting is that by defining the value of their end of the work - actually a relatively minor tack on to most conveyancing work - at a relatively high proportion of the overall fee, HSBC are making sure their bit doesn't end up losing out in the rush to cut prices. So if the cut prices aren't going to affect the quality of work on the lenders part of the transaction, that only leaves one place left for it to land.....!

Its also informative that First Direct - a HSBC subsidiary - who pride themselves on customer service, aren't shoving their customers at Countrywide!

[kingstreet]

FWIW Countrywide is the panel manager for this arrangement. You can pick one of the other 39 solicitors or 3 conveyancing warehouses if you prefer.

That said, HSBC has taken the FSA's instruction to lenders to "manage" their solicitor panels better, to help reduce mortgage fraud, as an invitation to reduce customer choice by a drastic amount. There are 1,600 CQS accredited firms in this country. 43?

All I can see from here is rapidly reducing efficiency and extended completion timescales - together with posts on here "£192 bill I wasn't told about" and "six months from accepted offer and still no exchange".

[betmunch]

Originally Posted by WestonDave

Its also informative that First Direct - a HSBC subsidiary - who pride themselves on customer service, aren't shoving their customers at Countrywide!

I wondered how they would fit with FD when they first anounced this link. I'm glad FD have managed to avoid getting caught up in this shocker

[Richard Webster]

I'm afraid I would agree with your solicitor, before the change your solicitor would have had to do the searches, check the title on behalf of you and HSBC, advise you on the terms of the HSBC mortgage and complete a form to HSBC to confirm that this has been done and that there are no problems with the property requesting the funds.

Now, in addition to this they also have to photocopy all of the paperwork and send it to HSBC's conveyancer to check as well. In addition to this, they have to make lots of promises (undertakings) to HSBC's conveyancer so that if something goes wrong HSBC's lawyer can pass all blame back to your solicitor. Where your solicitor may have been willing to use common sense when coming across any problems with your case I would put money on HSBC's conveyancers having a checklist which if they can't tick means you can't proceed.

I'm afraid you are bound to see a delay in your purchase transaction due to this change of policy by HSBC and I would encourage anyone who is looking at HSBC as a mortgage provider consider the impact and delay it could have on their purchase.

As for the "fixed fees", if you instruct one of the panel firms to act for you and HSBC, these are so laughably low that the only way I can see them being able to provide a service is to have untrained call centre workers answering all of your inquiries and by handling so many cases that their response times for dealing with those telephone messages will be a number of days due to the volume of messages that they have to get through.

I also agree with this. We haven't seen how awful it will be yet so we can only go by experiences when dealing with other far more obscure separately represented lenders.

In a couple of estimates I have sent out recently where HSBC has been quoted as the lender I have explained the position as far as I can and have said that going to a panel solicitor may be cheaper but one would have to question the quality of the work at that price.

Even the fees that their panel firms will charge for checking what we do will scarcely be economic so either they won't check things properly or will have so many boxes to tick (because they are using lower paid staff to do it) that there will be unreasonable delays while their OTT requirements are satisfied and meanwhile the buyer is complaining - and our reply would be that they decided to have an HSBC mortgage and it is just one of those things. HSBC would then get a lot of complaints.

At the moment I have a client buying a property with a mortgage from a sub-prime lender whose reputation is well known amongst solicitors. It has taken to several weeks to get to the point of being near to exchanging while we waited for their solicitors to say there were no outstanding requirements. When I discovered the identity of the lender I warned my client to expect significant delays and extra cost and he can scarcely blame me because he had little choice of lender. However if people could choose, they will start to go elsewhere if they realise that having an HSBC mortgage could lose them a property because of the delay.

[Richard Webster]

As a buyer's lawyer, you haven't had your 6 page letter with over 19 undertakings yet Richard, from an HSBC panel member.

It's nasty, and only confirms AlexSnow's "I would encourage anyone who is looking at HSBC as a mortgage provider to consider the impact and delay it could have on their purchase."

If that's the case then the next estimate I give where they are involved I will charge extra for the hassle so the pitch will be that they can either use one of the 43 or pay my more mainstream basic fee plus the £192 plus and extra £100 plus VAT from me for dealing with the 19 undertakings. I am sure I won't be the only one.

I see folk saying that First Direct are not doing this. Any solicitors had a recent new case from them to prove the point?

[Richard Webster]

Richard - don't, as HSBC get what they desire, all their customers using their panel for both borrowing and buying....and selling. Conveyancing then is dealt with by unknown factory outfits with clients treated like a number - and done by a firm on such a low fee that equal low attention by non- qualifieds...in great numbers

But won't there be a backlash as dissatisfied clients complain to HSBC about how awful the conveyancing service was?

[HighStreetLawyer]

HSBC limiting the panel of accepted mortgage conveyancers flies in the face of everything that the recent Legal Services Act sought to achieve- better service for customers and increased access to justice. I find it difficult to see how HSBC could possibly think that cutting down their panel to 43 conveyancing organisations could meet the needs of the UK consumer.
Solicitors are up in arms, seeking assistance from the Law Society, under the impression that they will be put out of business. They need to remember their focus should be the consumer!

[Richard Webster]

Interested to hear from some buyers what their experiences are of having one of the "Panel" of 43 act for them.

[propertyman]

They say you are getting old when things come round again- when I started in the 80's the above is exactly how it used to be!

Plus ca change....

[kingstreet]

Originally Posted by propertyman

They say you are getting old when things come round again- when I started in the 80's the above is exactly how it used to be!

Plus ca change....

Moi aussi.

Two solicitors. Nothing but standard variable rate. Half a percent extra for interest-only...

Them were the days. And I'm "only" 46!

[HighStreetLawyer]

Originally Posted by Richard Webster

Interested to hear from some buyers what their experiences are of having one of the "Panel" of 43 act for them.

Me too, although since it's only for new instructions, time will tell. We already know the reputation of certain members of the conveyancing panel, but it will be interesting to hear who is chosen to make up the rest!

[auroan]

Well, as expected my house purchase is being delayed by HSBC.... Took them two weeks just to assign a solictor to talk to my solictor.

[kingstreet]

So the first case we hear about of the 43 possibles is... Countrywide, the HSBC panel manager.

Why aren't I surprised?

[Richard Webster]

Countrywide recently wrote to me on a flat sale to ask for Tree Preservation Order, for goodness sake.

Oh but it is very important - it might affect the amount of service charge in the future when some work needs doing to the trees - just like the type of lawnmower the gardener uses and its service costs might affect the service charge - they'll be asking about that next!