Last updated: 7 May 2015
At a glance
- When customers wish to pay off their mortgage, they must request a redemption statement from their mortgage lender, which will set out the exact amount, including any applicable fees and interest due, to fully repay their mortgage.
- Issues relating to redemption statements and the discharge of mortgages can slow down the conveyancing process. In some cases solicitors and conveyancers can be sued for breaching undertakings given to discharge a mortgage, which causes concern to conveyancing professionals and their insurers.
- Problems can arise where there are delays in redemption statements being issued, or where the amount needed to repay the mortgage differs from the amount given on the redemption statement.
We want the conveyancing process to run as smoothly as possible for lenders, their customers and conveyancers. To this end, we encourage our members to conduct periodic reviews of their processes for:
- providing redemption statements;
- ensuring that they are accurate;
- discharging charges and;
- ensuring awareness of the joint guidance on redemption statements.
Why this is important for lenders
Most conveyancing transactions rely on conveyancers giving a binding promise, called an undertaking, to discharge an existing mortgage. Undertakings are a convenient method of speeding up the conveyancing process, without which the transaction would be more complex and costly.
If the discharge is not completed this has adverse consequences for all parties to the transaction including the conveyancer who gave the undertaking.