Solicitors can place the policy on risk at completion in lieu of Local Authority and/or other Searches, considerably speeding up the conveyancing process to completion.
Foundation said the decision to accept the insurance was in light of very high demand for Local Authority searches and the increased time it was taking some Local Authorities to return them, due to staffing issues caused by the pandemic, and the increase in purchases taking place boosted by the stamp duty reduced rates deadline.
The lender said some borrowers have been waiting for more than 40 days1 for their search results, which means the process of buying a property has become lengthy for many buyers.
Additionally, during this COVID-19 period only, and in relation to purchase transactions where Local and other searches have reached their six-month maturity, Foundation will also accept Search Expiry Insurance.
Foundation said it had received record-breaking levels of business throughout the Autumn and has recruited and redeployed staff to give advisers and their clients the best chance of completing before next March’s stamp duty deadline, and to manage increased business levels in 2021.
In addition to accepting No-Search Indemnity insurance, Foundation has made a number of process simplifications, including: • Removing the need for a limited company funding declaration for buy-to-let borrowers. • Removing the automatic request for bank statements on owner-occupier cases. • Simplifying the residential portal process to make affordability and deposit requirements easier and reducing the time to underwrite. • Redeploying new business support staff to help process pre-offer mortgages through the pipeline more quickly enabling underwriters to focus on applications where all requirements are met, getting more to offer at ‘first touch’.
Foundation said that as a result of these changes it had already doubled the rate of offers issued and would continue to hit this target moving forward, plus it planned to focus on completions during January 2021, with a major resource focus on releasing an expected three times its normal level of funds throughout February and March.
The lender has also responded to the increased interest in remortgaging. Earlier this month it launched new remortgage products across both its buy-to-let and residential ranges, to help intermediaries generate a pipeline of remortgage business which is not affected by the stamp duty reduced rates deadline.
The remortgage products include fee-assisted two- and five-year fixed buy-to-let and residential rates which come with one free standard valuation per case, no application fee, and £250 cashback on completion.
George Gee, commercial director at Foundation Home Loans, said: “While we can’t guarantee that all existing cases will complete before the end of March next year, what we can do is simplify our processes, redeploy some resources and communicate our requirements effectively, in order to give each case the very best chance of beating the deadline. Our decision to accept search indemnity insurance is part of this approach and designed to ensure borrowers are not negatively impacted by Local Authority search timescales.
“In order to get new cases in front of our underwriters quickly, we are also urging advisers to ensure full documentation is provided and the necessary product and valuation fees are paid upfront.
“We know this is a team effort from all mortgage market stakeholders and that the pressure is on to complete cases before the deadline; we believe that streamlining the process this way will help intermediaries considerably in getting their clients’ purchases to completion within the timescale required while still allowing us to welcome new business now and as we move into 2021.
“It should mean our intermediary partners can build a strong pipeline of new business to carry them beyond March and we believe our new fee-assisted remortgage products will help them do just that.”
