Panels: Common mistakes that may cost you a spot

Panels: Common mistakes that may cost you a spot

I am regularly contacted by firms asking advice about how to get back onto a lenders panel once they have been removed.

Unfortunately by then the damage is done. Often I listen to the facts and think; well if I were a lender I wouldn’t want this firm on a panel I was running either.

The reality is that many conveyancers act in ways that clearly favour the borrower over the lender, or are just cavalier in the way they deal with money.

Dormancy

However, many good quality firms are being penalised due to what many lenders call “dormancy”. Dormancy is the failure to conduct enough conveyancing to convince the lender that their firm has sufficient experience in conveyancing and is conducting enough volume to warrant the appropriate checks and balances that are indicative measures of a good firm.

A firm that does not have sufficient conveyancing going through will in the eyes of many lenders be considered a risk.

Lenders measure dormancy in one of three ways; firstly the number of cases where you have acted for them in the past, secondly the number of cases where you have acted for lenders that share data between themselves and thirdly from the number of cases you appear to put through your account at Land Registry.

Account not cheque

Every month the Land Registry counts and publishes the number of applications by account holders for transfers of data. In 2012 there were about 640,000 of these. Only these applications are counted.

In 2012 an additional 173,000 cases were put through Land Registry by cheque. But these are not counted. Often firms that have accounts put cases through by cheque.

So if you make applications to the Land Registry by cheque, rather than by using your account number, don’t be surprised if some lenders consider you are dormant firm.

Lenders use Land Registry published data to measure the number of conveyancing transactions they think you conduct and use that as a proxy for risk management.

If you want to stay on panels make sure the name of your account at the Land Registry reflects your firms present name and put all your applications through it.

CQS

It won’t be a surprise that other organisations like the CQS team at the Law Society are likely to use this data to consider whether your application merits inclusion in the Conveyancing Quality Scheme.

There are many other reasons why you may be removed from a panel or CQS. But there are many things you can pro-actively do to present your firm in the right light to lenders. If you don’t know why or how lenders think, it is worthwhile going to listen to them.

Many lenders have put a great deal of effort into attending road shows and events over the last two years to explain their thinking.

Using your Land Registry account will not necessarily prevent you from being removed from panels, but it is a very practical step to demonstrate to the world the expertise and experience you do have in the field.

As well as running Today’s Conveyancer Chris acts as a consultant to conveyancing firms via Practical Vision Limited.

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