A MATTER OF PRIORITY: LM04 LENDER POLICY SEARCH
Lenders regularly change their Part 2 policies. In fact, statistically, there is a 50% chance that a lender will change their instructions during the lifecycle of a purchase case where there is a mortgage.
The LM04 is an essential pre-completion search enabling conveyancers to check for changes to a lender’s Part 2 instructions before submitting their CoT.
A search of the Lender Policy Database is typically carried out just prior to the request to drawdown funds and covers the period from when the documentation on the transaction was first reviewed. If changes have occurred during this period, the Search will highlight the original and new text within the relevant sections of the Policy.
If no changes have occurred, the search results will reflect this as well. Shortly after you submit the search request, the results will be emailed as a PDF.
|Why this matters
Why would my firm consider a lender compliance audit?
|An adverse externally-commissioned audit by a lender could result in an insurance claim or removal from a panel. Breaches of Handbook also leave you open to costly and damaging suit if the lender suffers a loss and even regulatory action by the SRA . Compliance audits are the only way to ensure there aren’t costly skeletons in your conveyancing cupboard.
Are lender audits common?
|Increasingly. Even with repossessions at a low rate lenders are on the move with file inspections are already on the increase.lenders and PI insurers complain that non-compliance is still all too frequent, even in reputable firms. With pressure on interest rates and an uncertain financial climate due to Brexit, we recommend ensuring your compliance before repossessions rise and even more file audits are commissioned by lenders and insurers.
What happens if/when you uncover breaches?
This is a common question. When Lexsure finds breaches, they are often easily categorised. We can not undo what has been done but we can help you adjust problematic parts of your risk prevention protocols and checklists. And we can advise on tools to help avoid recurrences.
Unless commissioned to conduct an external audit, Lexsure has no duty to report breaches and we will ensure the results of your audit are completely confidential.