Lawyers to take on underwriters’ role in title insurance scheme
SOLICITORS are to be enlisted as the underwriters for their clients as part of a new title insurance scheme due to be piloted in the north of England next month.
The scheme has been devised by Stewart Title Insurance, which says that a medium-sized lender and a chain of estate agents are ready to test it in an area north of Bradford.
The scheme requires the seller’s solicitor to prepare a handbook, called the Homeowner’s Factfile, containing detailed information about its client’s property. The solicitor will be expected to investigate fully the title of the property before completing the factfile.
Stewart Title chief executive officer Michael Hickmott said the seller’s solicitor would effectively act as an underwriter for the insurance company which would then decide whether to grant title insurance on the property in question.
Hickmott said all the information on the seller’s house would be prepared before it went on the market, so contracts with a prospective buyer could be exchanged within 48 hours, conditional on finance.
He said Stewart Title had also begun talks with major lenders on expanding the scheme nationally.
Stewart Title head of marketing Peter Ashby said while the seller’s solicitor would do the bulk of the work, the purchaser’s lawyers would not be shut out of the process because they would have to assist their client with the contract and any mortgage details.
The scheme is similar to one being proposed by Stewart Title’s rival, First American (known as First UK in England), but Ashby argued that what distinguishes his firm’s scheme is its greater reliance on lawyers.
‘We want to work with lawyers,’ said Ashby. ‘As far as I can see First American appear to be more reticent.’
First UK director and solicitor Brian Marson acknowledged that his company planned to use fewer legal staff. But he said this was because it had invested in new technology which would allow one lawyer to process up to 50 cases a day.
London & European Title Insurance is the third major title insurance company trying to break into the property market.