Which lenders won't let you have a sole practitioner as your solicitor?

spannaman

We recently had a mortgage agreed with Britannia but they called me today to say that we have to change our solicitor as they don't deal with solicitors who are sole practitioners (I didn't realise they axed sole practitioners in October!).
Fine, we'll give our business to a lender who does deal with sole practitioners. Could people warn us of other lenders which don't deal with sole practitioners please?

luckyfool

Have you spoken with your solicitor? Many lenders have this issue and your solicitor should have some kind of process in place where they have a link up to another firm that "fronts" the deal and signs off on the work still being largely done by the "sole practitioner".

The issue for lenders is the insurance policies they take out against losses from fraud/negligence by the solicitor have commonly started to exclude any losses incurred where the solicitor was a sole practitioner (i.e. only one controlling party and hence more vulnerable to fraud). Understandably this means many lenders that in the past would have taken a sole practitioner will not any more.

Definitely check with your solicitors first as its probably easier to have the fronting solicitor changed than to change lender depending on how far down the road you are on the mortgage.

Conrad

Your solicitor is at fault here, not the lender. They should have told you up front that no lender allows sole practicioners.

Many sole practicioners in the past commited mortgage fraud, so enmass lenders stopped allowing them to be used. The point being, multi partners are less likely to all want to commit fraud.

spannaman

Thanks for the info luckyfool and Conrad. So no lenders at all allow sole practitioners now? I was under the impression that most of the big lenders still did.

pete1717

Conrad wrote: »

Your solicitor is at fault here, not the lender. They should have told you up front that no lender allows sole practicioners.

Many sole practicioners in the past commited mortgage fraud, so enmass lenders stopped allowing them to be used. The point being, multi partners are less likely to all want to commit fraud.

People who dont have the correct facts or don't fully understand the profession they deal with on a daily basis should refrain from posting on this forum

What a ridiculous statement to make .." multi partners are less likely to all want to commit fraud "

You are completely incorrect by saying that no Lender will use a sole practitioner - I AM A SOLE PRACTITIONER and I am on the panel of the majority of lenders. If what you say is correct how do you think we run a business ? If you are telling your clients this then you are giving completely incorrect information to them and so reducing their choice of solicitors by telling them they can only use a larger firm

It is some of the smaller lenders who have some objection to using sole practitioners and this is not because " many sole practitioners have committed fraud... " but perhaps maybe one or two have at some time in the past. There is dishonesty and fraud in almost every profession and unfortunately this is no exception but please don't tar sole practitioners only with this - I dealt with a larger firm of solicitors before Christmas only to be told on calling to exchange that the firm had closed down - I will leave you to guess what would have caused such a sudden closure !

In situations where I am not on the panel of a particular lender I have an agency agreement whereby a local firm of solicitors will act as agent for a small sum. This set up has been required only 3 times in the last 12 months and each time by a smaller lender. Once a client tells me their lender is likely to be one of the smaller lenders then I will inform them that I wont be able to deal with it but can , if they wish, appoint an agent for a very small additional fee - to date, all have been happy with this.

The problem sole practitioners face is that mortgage brokers dont like using them because they dont get the huge fee that the bigger firms will pay them for their referrals - do you tell your clients this?

If you are going to post on forums like this at least take the time to get your facts right before you do and please remember that the problems with sudden closure of firms resulting in the freezing of bank accounts holding clients' monies, late payments of stamp duty, late/non registrations etc. that are being reported on the forum now have not been caused by sole practitioners

ultramagnetic_commuter

I came across this with our recent Co-op mortgage where they thought (incorrectly) that our solicitor was a sole trader. They said they wouldn't accept it if she was. I realise Co-op is linked to Britannia but maybe not a "small" lender.

I don't think the poster was saying all sole traders are bad, just that lenders are cautious of them. I can't think why else it might be other than a higher chance of problems.

dunstonh

So no lenders at all allow sole practitioners now? I was under the impression that most of the big lenders still did.

I havent done a mortgage in over 10 years. However, it was very common for lenders to refuse to deal with single practitioners back then. Its not uncommon.

The problem sole practitioners face is that mortgage brokers dont like using them because they dont get the huge fee that the bigger firms will pay them for their referrals - do you tell your clients this?

Complete and utter rubbish. Most solicitors dont pay a penny to the broker. Most people will use their own local solicitor.

I use your own words against you:
People who dont have the correct facts or don't fully understand the profession they deal with on a daily basis should refrain from posting on this forum


I recall being told that the problem with sole practitioners was for two reasons. a) if the practitioner become ill or unable to work, everything would come to a stop. b) there was a period when fraud was high and they were mostly to blame.

As per the caveat added in post 6, it doesnt mean all are bad and that does relate to a historical period and things do change.

James_Trimby

I have just had to move a client from one solicitor to another as they were not Abbey panel solicitors (though still do a large number of conveyences) as soon as they knew who the borrower was they told the client and gave him alternatives. Often it is just a case that as a sole trader the solicitor hasn't got round to applying for all the different groups. I am sure some lenders do look on sole practitioners slightly less favourably more on sickness/backup grounds etc rather than fraud which is very silly as we all know it is the secretaries that do most of the conveyencing work anyway!! All solicitors are law society registered monitored and insured so there should not really be a difference.