Well ... at least we thought there were some rules, but it seems that lenders can play quite fast and loose when it comes to advising their clients.
First, it was HSBC that broke the mould by selecting their clients' lawyers for them. For one of the world's most conservative banks it was a brave move. Someone in head office decided that if their clients wanted to get a mortgage with HSBC then they wouldn't be able to choose their own solicitor to represent them.
Suffice to say, it didn't go down terribly well, and even BBC Radio 4 listeners got to hear about the issue.
Bowing to the inevitable pressure from estate agents who were obviously frustrated by the huge delays that this decision caused, HSBC revisited the idea and allowed a few more solicitors to represent them.
So that's the old news.
Now, it seems that Nationwide have decided to embark on a similar, but altogether more aggressive course. Not content with refusing to allow any law firms that haven't represented them for more than four years ago, now they have dictated that they will "encourage" their clients to use their recommended lawyers.
If any client has the temerity to try and select their own lawyer, Nationwide (and their brokers) will do their utmost to dissuade them from this free choice. We've seen a significant increase over the past few months in clients being strong-armed by the lender and their brokers alike to use their own lawyers.
These lawyers all receive work through a panel, LMS, for whom, no doubt, this is good business.
Unfortunately, for both the lawyers that receive this panelled work, the fees are necessarily reduced (after all, LMS have to get paid) and for Nationwide's clients, they inevitably suffer the consequences that arise out of solicitors working for reduced fees.
Sadly, the FSA, (the Financial Services Authority, rather than the Food Standards Agency, but equally known for their toothlessness) cannot do anything about this.
It seems that while lenders can act against their clients' wishes, the efforts to rehabilitate the disgraced financial service industry and still akin to putting lipstick on a pig.
