Lenders urged to offer cashbacks instead of free legals
Earlier this month Mortgage Introducer revealed how free legal services from lenders had been heavily criticised for causing problems and delays in completion.
Jonathan Burridge, director of Quantum Mortgage Brokers, said several complaints had been made against his firm by clients due to problems when using these free legal services.
Lawcomm Solicitors recently carried out research into lenders’ in-house legals, where 67 per cent of the 150 brokers surveyed were not satisfied with the service provided.
Mike Fitzgerald, sales director at Brentchase Financial Services, said lenders must now re-evaluate what types of incentives to offer in order to address these service issues for the benefit of the clients, suggesting cashback deals as the ideal answer.
He explained: “More lenders should offer cashback in lieu of free legals and then mortgage brokers would be able to use the services of specialist legal firms that are set up to deal with large volumes of new business.
“Lenders have spent a lot of time and money marketing these free deals and I would urge them to deal with any service issues as a matter of priority. Perhaps it’s a case of some legal providers not being able to say no to all of this new business.”
John Stewart, director at PMI Independent Financial Advisers, commented: “All lenders should do this. However, cashbacks don’t normally cover the cost of fees for their own solicitor. But if brokers and their clients want control, then all lenders should offer a choice.”