Insurers demand reshape of Co-op conveyancing panel

by Gill Montia

Story link: Insurers demand reshape of Co-op conveyancing panel

Insurers are toughening up with lenders at risk of mortgage fraud, with Co-operative Financial Services and its merger partner, Britannia, forced to reshape their conveyancing panel, if cover is to continue.

Solicitors on a lender’s approved panel normally act for the buyer and lender but the system can facilitate fraud as the solicitor involved is responsible for ensuring that money reaches the right party and that a charge is registered against the property.

The scale of mortgage fraud in the UK prior to the credit crisis is continuing to unfold.

Last week, Chelsea Building Society revealed that its buy-to-let mortgage book was responsible for a £41 million write down in this connection.

According to reports, property values were artificially inflated by third-party professionals over a couple of years and events only came to light during a review of society’s overall mortgage book by external consultants.

Over the weekend, The Daily Telegraph reported that the Serious Fraud Office and the police are currently investigating buy-to-let mortgage fraud across the UK.

The newspaper also advised that the Financial Services Authority is considering asking building societies to conduct a “health check” particularly of their buy-to-let loan books.