Recognising that our customer-facing processes were not always customer-friendly and required an overhaul, Birmingham Midshires started moving towards a dematerialised policy in early 2000.

It identified the deeds process as an early candidate because it is so paper-intensive -- Midshires needed three miles of shelving to store existing deeds packets, and with planned future growth, the position was unsustainable.The administration cost is funded not through interest margin but by deeds production fees, copying fees and so on -- and although our fees are in line with other lenders, they are a source of frequent complaint.

Customers are increasingly questioning the basis and justification for fees.

We despatch about 150 titles a day, rising in peak periods to about 170 sets.

Dematerialisation has not materially affected this yet because the average life of a mortgage is about seven years.

With so much paper moving around there is a significant possibility of loss, meaning that we would have to reconstruct the title -- again causing complaints.

We recognised that we had to address the causes of the complaints, to streamline the operation generally and to improve overall efficiency.With help from the Land Registry, we started with section 63 of the Land Registration Act 1925 and dematerialised the charge certificate for new loans.

We considered what else we could do without, ranging from taking nothing to retaining everything.

The latter was not a valid option; the former appeared to be our ultimate goal.

We undertook a risk review, including risk of default, risk of borrower non-co-operation, availability of replacement documents and availability of insurance cover.It became clear that we could do without much of the paper ordinarily found in title bundles.

More controversially, we decided that we could do without leases too, borrowers now being responsible for looking after these.

We stopped taking assignments of life policies some time ago.

Therefore, our present policy is to keep as little as possible consistent with retaining adequate security across the book.

It is important to remember that we lend against affordability and not primarily against the wor th of the security -- we don't lend against the worth of the property only on the basis that we can always enforce and sell.The dematerialisation policy applies to new residential lending only, and we haven't undertaken a wholesale return of titles on the existing book.

There's no Scottish or Northern Ireland equivalent of section 63 yet so we retain a traditional policy for those jurisdictions.

Dematerialisation is only possible with computerised registers and the registration authorities in those jurisdictions are working to introduce this as quickly as they can.We now return almost everything to the conveyancer.

Borrowers have therefore lost the free storage facility they enjoyed previously.

The policy empowers customers, giving control, ease of access (for example, to timber and damp guarantees, and to inspect boundary markings), and an enormous reduction in the paper shuttle.

Borrowers may need legal advice to interpret their deeds.

But this is no different from before, as we cannot offer legal advice to customers.The policy also empowers paperless conveyancing, soon to be a reality.

Although the Homes Bill was not in the Queen's Speech, it remains a government commitment and I anticipate that we will have sellers' packs within the next few years.

Certainly, the government continues its preparations so as to facilitate a speedy introduction once parliamentary time becomes available.

By having the title, a borrower can reduce the time to prepare a pack by at least two working days, always assuming that the lender can release the title immediately.We are still learning and we accept that we do need some documents.

Typically, these include consents in shared ownership cases, and share certificates in management companies.

Where possible, we only ask conveyancers for certified copies of these (except for security documents) which we microfiche.

The conveyancer keeps the originals.So what's the impact on a conveyancer? We issue a leaflet with the offer, advising conveyancers that we have dematerialised and specifying what we want.

There is no need to send us everything following completion.

On sale, there is no delay in obtaining any ancillary papers or the lease from us as the borrower has them already, and office copies cost less than a deeds despatch fee (currently £40).

There is no need to give us an undertaking for the deeds.

The policy does not undermine handwriting analysis if required, as we still require a legal charge.

The Land Registry retains this but will release it on request, if forensic evidence is necessary.It would be disingenuous to state that the policy has been universally well received.

Some conveyancers have suggested that borrowers lose deeds.

We considered loss in the risk review before we implemented the policy -- I found no evidence suggesting that people without mortgages were prone to losing title documents, and evidence tends to be anecdotal.

As we have decided from a security perspective that we do not want to keep the deeds, we do not want the responsibilities of a gratuitous bailee in respect of them.Fundamentally, it is a question of educating borrowers to treat deeds with care -- the position is little different from looking after other original documents such as a passport or birth/marriage/death certificates.

It is true that with a lease there may be greater difficulty in obtaining a replacement than the documents I have mentioned, although replacing a lost passport is not easy.

However, the borrower can approach the Land Registry, the landlord, or buy indemnity insurance.

If the lea se has been lost, paragraph 5.10.12 of the Lenders' Handbook specifically allows for a HM Land Registry produced copy of a registered lease as security.If borrowers do not want the responsibility of looking after the papers, other repositories accept the business at modest cost.

It could be a marketing initiative for solicitors -- there is no practice rule prohibiting charging for safekeeping.

Change is opportunity.

If lost deeds prejudice a sale then we would supply whatever we could, but this would probably be limited to the basic information from the certificate of title.Others have labelled us 'mad' or 'stupid'.

I recognise that our policy is a radical departure from established practice.

We are not so naive as to consider that we will not encounter problems in future.

But we have a much friendlier customer-facing process, less cost, and less delay.

We consider that on balance, across the portfolio, the benefits of a paperless deeds policy outweigh the risks.

It is part of the paperless conveyancing future -- which, from what the Land Registry is saying, is only a year or two away.