Going fishing

It is an unfortunate fact that in hard times mortgage repossessions often increase. Where, as is often the case, the lender makes a loss on any subsequent sale, the lender will look for ways to recover that loss. The first port of call is often to request the purchase file from the solicitor who acted for the lender. That solicitor will generally have also acted for the borrower. The request is in effect a fishing expedition. This article is written from the perspective of the fish rather than the fisherman, namely the solicitor to whom the request for the file is made. In my role at Fraser Dawbarns of Client Relations Manager I deal with such requests. I am therefore the fish.

When a solicitor has acted for both borrower and lender there are in effect two parts to the purchase file – the lender’s part and the borrower’s part. Solicitors are bound by rules of client confidentiality. These provide that no part of a client’s file should be released to a third party without a proper signed authority from the client. This applies to both the lender client and the borrower client. This means that the lender is only entitled to its part of the file and any common documents – this will generally be correspondence with the lender and documents relating to the title and investigation of title and searches. The lender is not entitled to correspondence with the borrower/buyer client which will be the majority of the file. There are exceptions but these are not for this article.

The requests I receive nearly always come from solicitors instructed by the lender and are for the whole file. That solicitor is a third party as between this firm and the lender as client of firm on the original transaction. Invariably one or all of the following occurs:

1. The request is not accompanied by any authority from the lender client of this firm
2. A blanket form of authority is provided which is addressed ‘to whom it may concern’ and does not specify the specific file or transaction
3. A blank form of authority is provided on which the requesting solicitors have completed the file/transaction details.

I consider all of the above to be insufficient to release even the lender part of the file let alone the whole file. The regularity with which I receive such insufficient or no authority leads me to believe that not all in receipt of a lender request for a file are rigorous in checking the adequacy of the authority provided before releasing the file and that the whole file is released to the lender.

Your information and details retained on your purchase file are precious to us and we will respect the confidentiality that attaches. Accordingly our practice is to only release information against a sufficient bespoke authority and limited to the lender part only. This fish will not so readily rise to the bait.

by David Osborne from the King’s Lynn office