For Mortgage Brokers and Intermediaries
As a mortgage broker or intermediary, you know how frustrating it can be to be faced with the ever more common requirement for your client to obtain Independent Legal Advice (ILA), sometimes at the last minute. Having already put in the hard work to get the loan arranged for the borrower, the need for Independent Legal Advice can act as yet another hurdle for your client, who may be confused about why it is necessary and how to deal with it.
Whilst your job is to connect customers with the best mortgage deals available on the market, you shouldn’t have to explain the complexities of mortgage lender’s underwriting requirements for Independent Legal Advice in a range of different lending situations. It can be difficult to provide real assistance to clients who need to find a local law firm which provides this service for a reasonable cost. When the need for Independent Legal Advice crops up, it often leads to hours of wasted time as the client searches for a solicitor who is prepared to advise on their situation promptly and for a reasonable fee.
Fortunately, we’ve devised a simple solution that facilitates the process of providing ILA to borrowers, and where possible we look to facilitate the advice being provided on an online meeting to minimise the inconvenience and cost to the client.
Why does my client need Independent Legal Advice?
A lender can require Independent Legal Advice for a variety of borrower situations and mortgage lenders are you may know from your own experience mortgage lenders are increasingly requiring it as a condition of a mortgage. Mortgage lenders are concerned that the Courts have bestowed a duty of care on them to ensure borrowers understand the terms of loans in which they are liable for the repayment of a large sum of money or waive some of their rights without directly enjoying the benefit of the loan. As a result, the lender will ask that they seek Independent Legal Advice as a prerequisite to the completion of a transaction.In doing so, the lender can protect themselves from the borrower claiming the loan was taken out as a result of undue influence or lack of understanding of the consequences of taking out the loan.
The main objective of independent legal advice, therefore, is to ensure all parties involved or effected by the loan agreement understand the extent of their liability and are not influenced or pressured into signing anything by other parties without full disclosure of the true meaning of the document. On the surface, it may seem like a tick-box exercise, however to a mortgage lender, it has become an essential means of mitigating its risk.
The need for Independent Legal Advice is commonly associated with the following situations:
- Director’s Guarantees
- Personal Guarantees
- Occupiers Deed of Consent and Postponement/Waiver
- Joint Borrower Sole Proprietor mortgages
- Transfers of Equity
- Equity Release
- Gifts and Transactions at an Undervalue
- Bridging loans and commercial agreements
Since independent legal advice by nature is independent of the other parties involved in an agreement or transaction, the client cannot usually rely on their conveyancing solicitors who they have already instructed in the transaction. What’s more, since independent legal advice is viewed to be an area of high-risk to many law firms, it’s not always easy to find a solicitor who will offer this service for a competitive fee.
How can we help you and your clients?
When a borrower needs independent legal advice as a prerequisite to a mortgage agreement, the last thing you need is for the loan to be put on hold as the client attempts to find a provider. We regularly aid mortgage brokers and intermediaries by connecting their clients to qualified solicitors through our network, whether locally or online. We can often even arrange for the advice online and outside of normal working hours so your client won’t even need to suffer any disruption to their daily schedule!
All that’s needed is for you or your client to ILA-Connect: we’ll assess the specific type of advice they need, and whether it can be delivered online to save, we will arrange the advice to be supplied at their convenience with a minimum of fuss. From there, the certification your client needs from a solicitor stating they have received independent legal advice will be available and so allowing them to proceed in their transaction.
If your client requires independent legal advice and you or your client needs assistance, just get in touch with ILA-Connect today using the information below. We’ll get back to you promptly to set up an appointment for your client at the earliest possible stage.