Mortgage funding change
Mortgage funds must be transferred directly from the lender’s to the seller’s solicitor where conveyancers act only for the lender under new instructions published by the Council of Mortgage Lenders (CML).
The rules, which amend part 3 of the CML Handbook, apply when a conveyancer is acting only for a lender rather than for both lender and borrower in homebuying transactions. They come into force on 2 July. The rules were drafted to cope with the increase in the number of cases where a seller’s chosen conveyancer is not on a lender’s panel, as lenders move to manage their panels more actively and cut the number of member firms.
CML director general Paul Smee said: ‘In most cases, the same conveyancer acts for both lender and borrower. However, where this is not the case it is important that both conveyancers know exactly what is expected of them so that any confusion is eliminated and resulting problems minimised.’
Jonathan Smithers, chair of the Law Society’s conveyancing and land law committee, said that while he hoped joint representation would continue to be the norm: ‘We recognise that a variety of factors may mean an increase in the number of cases where separate representation is used and we hope that the new instructions will provide some consistency in those cases.’
He added: ‘We are working with lenders to help ensure that our Conveyancing Quality Scheme supports lender confidence in operating broad panels.’ The new instructions, together with a set of voluntary example letters designed to help ensure complete clarity between conveyancers acting in transactions where the lender and borrower are separately represented, are on the CML website.