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The Lender Exchange is a secure web portal. The portal addresses the issue of multiple lenders seeking similar information from law firms in order to manage their conveyancing panels. Lender Exchange will allow law firms to submit their data through a single, secure system which those lenders, who are part of the scheme, will be able to access data that allows them to independently manage their panels.
In recent years, mortgage lenders have experienced a significant risk from mortgage related fraud which has led to substantial losses. Consequently, lenders have regularly sought more information from law firms about their operations and the individuals who work for them. Decision First have developed the Lender Exchange system to enable law firms to easily provide lenders with the information they need to manage their panels and satisfy the additional regulatory requirements on lenders to conduct increasing levels of due diligence. Law firms will benefit by only having to provide information once to a single, central point which will significantly reduce the impact of complying with multiple information requests.
The first set of lenders to use the system will be Lloyds Banking Group, Santander and RBS Group. Santander’s current system and data will be migrated over into the new Lender Exchange and their own stand alone administration charge will be withdrawn. A new charge covering ALL lenders using the Lender Exchange will be made by Decision First. A further group of lenders is interested in joining the scheme early in the New Year and this includes: Coventry Building Society, Paragon and Bank of Ireland. Discussions are well underway with other lenders to use the system.
Whilst lenders will decide which firms they will appoint onto their panel, those lenders signing up to use the Lender Exchange will make it a mandatory condition of panel membership that firms submit information via Lender Exchange.
Decision First is actively engaged in a dialogue regarding the Lender Exchange with most lenders but some have moved to a position of signing up quicker than others. Some lenders already employ different panel criteria with their own ‘managed’ panels and the governance procedures vary greatly from lender to lender. A number of lenders of varying size are already keen to join once the scheme is up and running.
The charging structure is based on the relative size of the firm and judged by the number of partners, members or directors that run the organisation, whether they specialise in conveyancing or not. An annual fee is charged for administration of the system irrespective of the number of lenders panels to whom a firm is applying /members of – whether it be 2 or 20 lenders, there is no increase in charge for law firms. The annual fee payable will be fixed for the first 3 years.
|No. Partner, directors, members||Annual Fee|
|Sole practitioner||£285 +VAT|
Firms are charged on an annual basis to cover a 12 month period. Firms applying to join part way through the year will be charged for the portion of the year remaining until the renewal date. The charge covers annual renewal to the Lender Exchange which lenders (who are signed up to it) will rely on for administering their panels.
Only one lender, thus far, has implemented an application charge for panel membership and this is set at £199 per branch. An annual charge of £99 per branch applies for continued membership, unless a reapplication is required. If this model was adopted across the lending community, law firms could see very significant charges for panel membership. For example, a firm with 3 branches on 5 lenders’ panels would pay £597 per lender (nearly £3000 for application of all 5 panels) and £297 per lender (£1485 for membership to all 5 panels).
With the Lender Exchange, the fees are fixed for the year, irrespective of the number of branches or the number of panels the firm is on.
The administration charge is an annual fee which is paid by direct debit. The fee chargeable will be based on the number of partners, members or directors in employment by the firm at renewal.
The purpose of this scheme is to reduce overheads on panel firms through a solution which allows the provision and validation of information into a central place. The scheme reduces the risk of lenders introducing individual panel charges to recover the increasing cost of administering their panels. This would become a significant burden for firms and a much more costly situation. By adopting the Lender Exchange system, lenders and law firms benefit by using a central point for the collection of information, thereby avoiding the need for firms to regularly provide the same information to multiple lenders. In addition, lenders and law firms will be able to communicate (via a mailbox) directly with each other saving a huge amount of time and effort in tracking down the right person to query each other on matters relating to panel membership and panel applications.
Some lenders have been undertaking this type of validation work internally at great cost to themselves to date. Others are contributing to the creation of the Lender Exchange through the provision of data, design and processing which has allowed the charges we are making for Lender Exchange to be kept low.
There are two distinct routes:
Existing panel members (of a lender signed up and using the Lender Exchange). In most cases, firms will automatically be registered on the system when a lender signs up for the Lender Exchange and we will conduct an initial validation of the data held with the law firm. There will be a comparison of the data already held on the system (as firms may be on multiple lenders panels) and firms will be required to supply any incorrect or missing information.
New applicants: Firms not already on a lender’s panel (for lenders using the Lender Exchange) must first register on the system. The firm will be set up and be issued with login credentials. Firms will initially need to complete some pre-qualification questions which will include selecting those lenders to whom the law firms wish to apply. These questions are designed to ensure that firms are eligible for at least one lender’s panel before any charges are applied. Some lenders will require a mortgage application to be in progress before they allow panel applications to be submitted. On completing and submitting all the information and documents required, the data will be validated by Decision First before being made available to the lenders’ panel administration teams who will independently review the application and decide on the firm’s acceptance to their panel.
No. The ultimate decision to accept a firm onto a lender’s panel rests with that lender and Decision First has no ability to influence or control that decision. The Lender Exchange facilitates the management of those lenders panels and through provision of validated data which allows lenders to apply their own specific criteria in order to reach their individual decisions on panel acceptance.
No. The charge is to cover the administration of the system and the validation of information on behalf of lenders. Once all the data has been processed, lenders then make a decision whether or not to appoint/reappoint a firm.
Yes. As the Lender Exchange is a common platform (available to all lenders) firms will be able to apply to all those lenders whose panel they wish to be on – assuming those lenders have signed up to use the Lender Exchange. Some lenders may require a mortgage application to be in progress with a customer that has specified a law firm before they allow a panel application for that firm to be submitted.
The system will highlight the minimum set of data required. If the minimum set of data is not provided, it will not be possible to apply/reapply for panel membership by any lender.
All data will be stored in accordance with the Data Protection Act. Personal data is used in order to perform background checks with credit reference, identity and fraud agencies, and to validate submitted data against data held by organisations such as Law Societies and the Council for Licensed Conveyancers.
As we work for, and with, some of the largest organisations in the country, we adhere to their stringent levels of security, meaning all data is encrypted and held in a secure database.
Only those lenders that have signed up to use the Lender Exchange and who you select from the list of lenders whose panel you wish to be on.
You will be required to inform us, via the Lender Exchange system, of any material changes as they occur. You will be asked to log onto the system every 90 days as a minimum and will need to respond to a set of questions relating to the key information about your firm and any changes will need to be documented (any changes to ownership structure, premises, account details, partners joined/left, constitution changes, insurance changes, letterhead amendments etc.). Users who have informed us of any of these changes in the interim period will not be prompted for a further 90 days from their last change.
Users can simply upload an electronic image of the documents (PDF is the preferred format, but many other image formats are acceptable JPG, PBG, GIF, TIFF, etc.).
No information supplied will be reviewed until all required information has been submitted. If there has been an error, firms can amend the information supplied. Firms will be required to update information regularly in order that the Lender Exchange has the most current information available.
Yes. If a firm works for a lender in that jurisdiction, they will need to submit their details via the lender exchange.
No. The CQS is not a requirement for membership to the Lender Exchange. Some lenders do however require CQS as part of their own panel criteria. CQS membership does not guarantee that firms will satisfy lenders’ criteria.
We appreciate that some firms may have provided some similar information to The Law Society to be part of the Conveyancing Quality Scheme and will have incurred a fee for this. However, the information we require is not identical to that required for CQS accreditation, which, after all is about the manner in which work is undertaken, so is more process oriented. CQS membership is therefore not an alternative to the Lender Exchange system.
The scheme is open to lawyers from every UK jurisdiction and practice constitution, including Alternative Business Structures.
Yes. A set of pre-qualification questions are presented to firms. If, on answering these questions, a law firm does not meet the minimum criteria of any of the lenders signed up to the scheme, the firm will be told this and can decide whether or not to continue as a charge will apply. There may be circumstances where a firm does not satisfy the pre-qualification questions, but has been given special dispensation by a lender to apply.
Information is held at a firm level requiring all offices and all relevant staff to be entered. Details of all partners, directors or members in the firm are required, together with details of all fee earners who carry out conveyancing. If individuals join or leave the firm, the firm will be required to update the system accordingly.
The Lender Exchange is a system designed to allow law firms to provide information to lenders, allowing the lender to retain/appoint the firm to their panel. Whilst each lender’s version of the CML handbook (part 2) can be hosted on the system for access by firms, there is currently no direct integration with the handbook.
Not at this time.