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| Law Society says HSBC mortgage system threatens house sales | Law Society says HSBC mortgage system threatens house sales |
| (40 minutes later) | |
| House sales could fall through under a new mortgage system being used by a high street bank, legal experts have warned. | |
| The Law Society of Scotland has called on HSBC to suspend its new conveyancing panel system, which limits the firms that carry out its legal work. | The Law Society of Scotland has called on HSBC to suspend its new conveyancing panel system, which limits the firms that carry out its legal work. |
| The society says the paperwork involved is not fit for purpose and is based on English, rather than Scots, law. | The society says the paperwork involved is not fit for purpose and is based on English, rather than Scots, law. |
| It said the system could put hundreds of property transactions at risk. | It said the system could put hundreds of property transactions at risk. |
| HSBC has been asked to respond to the claims. | HSBC has been asked to respond to the claims. |
| The Law Society's warning came after a move last month by the bank to set up a restricted conveyancing panel. | The Law Society's warning came after a move last month by the bank to set up a restricted conveyancing panel. |
| Under the new system, only some law firms in Scotland are allowed to carry out security work on behalf of HSBC, and customers who wish to use their own lawyer face a charge. | Under the new system, only some law firms in Scotland are allowed to carry out security work on behalf of HSBC, and customers who wish to use their own lawyer face a charge. |
| Previously any law firm in Scotland could carry out work for both the purchaser and mortgage lender. | Previously any law firm in Scotland could carry out work for both the purchaser and mortgage lender. |
| The Law Society warned documentation issued by HSBC's solicitors is based on English conveyancing. | The Law Society warned documentation issued by HSBC's solicitors is based on English conveyancing. |
| The society said it required solicitors for both the buyer and seller to grant undertakings which may be difficult, if not impossible, to honour. | The society said it required solicitors for both the buyer and seller to grant undertakings which may be difficult, if not impossible, to honour. |
| The body also said the purchaser's solicitor is also being asked to carry out a lot of additional work, much of which would be avoided if they were acting directly for the lender. | The body also said the purchaser's solicitor is also being asked to carry out a lot of additional work, much of which would be avoided if they were acting directly for the lender. |
| The Law Society said it had been has been inundated with calls from concerned buyers and their solicitors over the past fortnight. | The Law Society said it had been has been inundated with calls from concerned buyers and their solicitors over the past fortnight. |
| Ross MacKay, convener of the society's property law committee, said: "We pointed out that this new system was wrong in principle and a month on it is becoming clear that it is also wrong in practice. It is failing homebuyers who have chosen an HSBC mortgage. | Ross MacKay, convener of the society's property law committee, said: "We pointed out that this new system was wrong in principle and a month on it is becoming clear that it is also wrong in practice. It is failing homebuyers who have chosen an HSBC mortgage. |
| "There is a risk that house sales will fall through and buyers will be left homeless and sellers without payment. | "There is a risk that house sales will fall through and buyers will be left homeless and sellers without payment. |
| "We are therefore calling on the bank to immediately suspend the new system until there has been a full review and consultation with us to ensure that the paperwork is legally correct and workable, and that the system does not penalise buyers and their agents." | "We are therefore calling on the bank to immediately suspend the new system until there has been a full review and consultation with us to ensure that the paperwork is legally correct and workable, and that the system does not penalise buyers and their agents." |