View Full Version : HSBC and Solicitors
26th Jul 2004, 04:28
I am currently in the process of obtaining a HSBC loan, kindly secured over my parents property. I have now, however hit a snag. HSBC require my family and I to seek independant financial advice on the loan. I thought this would be straight forward but the first solicitor refused to give the advice, and after a new set of letters were sent to my second choice solicitor, they too have said they cannot provide the required advice.
Just wondered if anyone else has encountered this problem or if you know of any solicitors in Hertfordshire or North London who were/are willing to,
26th Jul 2004, 06:46
I would think your best bet would be to find an independent financial advisor. How you go about finding one in the UK I am not sure, possibly just look in the yellow pages, after all at this stage it is only advice you are after.
I have used one to help sort out a few things when my daughter was trying to obtain a loan for her ATPL and he pointed me in the right direction.
You can find an IFA at the laughably-named http://www.unbiased.co.uk/ :rolleyes:
26th Jul 2004, 08:41
I'm a little confused as to why you would ask a solicitor for financial advice. Maybe you are slightly unclear as to what HSBC are asking for.
If you need an independant financial advisor, try a quick Google search for the Personal Investment Authority. I believe they are the industry regulator, and should be able to direct you to a local IFA.
If your parents are willing to have their house used as a guarantee for the HSBC loan, have you considered a remortgage instead? It is likely that the house is worth considerably more than your parents purchased it for (unless you have only just moved in), and a substantial amount of capital can be released from a remortgage, possibly even enough to cover your full training costs. You will also be able to benefit from more favourable interest rates and repayment terms than HSBC will ever offer for the Professional Studies loan, or whatever they call it these days.
I would ask your IFA to consider both options and make a recommendation on the best one for you.
26th Jul 2004, 12:46
I think you will find that the bank want your parents to obtain advice independently from you. The reason for this is that the bank do not want to be in any way encouraging your parents to create a charge over their property or act as a guarantor in circumstance when it may not be in their interests to do so. By having taken independent advice they can assume that the full legal consequences of the guarantee and charge have been explained to them. In the bad old days a bank official would witness a mortgage by a third party(often a wife agreeing to put up her share of the house to secure the husband's debts). This stopped when the courts refused to enforce the mortgages on the basis that the legal consequences had not been explained to them and where it had clearly not been in that person's interests to sign the mortgage.
I don't think they want you to take independent financial advice, as you are not making an investment (except in your future, obviously!).
26th Jul 2004, 14:27
Justiciar, you are correct..... I am not sure if my post was confusing, but the advice needed was independant legal advice in relation to the terms of the contract, rather than financial.
HSBC ask that I nominate a solicitor. Forms are then sent to the nominated solicitor and myself, sister and parents have to visit to have the terms of the agreement explained to us, then produce a certificate to HSBC to prove this has been done. It in no way relates to financial advise as I have already taken this.
My problem relates to the fact that the two solicitors I have nominated so far have refused to offer the advise. My question was, has anybody who has taken a PS loan with HSBC encountered any problems legally?
Apologies for confusion but meant legal not financial in original post!
26th Jul 2004, 20:03
Its unfortunate that you have been turned down by some of my fellow professionals:ugh:
This is not rocket science. All you need is some basic advice which any solicitor who is not scared of his own shaddow should be able to give. Make it very clear to them the circumstances, and also make it clear that you realise you will have to pay for the advice. It should not take more than 15 to 20 minutes at most so the bill should not be too large.
26th Jul 2004, 20:22
When I got mine they told me to sign it with a lawyer present. This was more to check what was being signed, not financial advice.
27th Jul 2004, 22:30
Although a solicitor would give you a basic grounding, anyone working within banking should be able to provide you with the same level of advice.
Even someone sat behind a desk in a high street bank would be able to give you some sensible (albeit biased) suggestions.
As I am one of those people behind the desks making the loan decisions, that's what I would do if somebody needed help.
Banks are selfish arses but the people who work for them are just human.
28th Jul 2004, 10:07
This is all about banks covering their backsides. All banks do it in a wide variety of situations. They want to be certain that the person signing the mortgage to secure someone elses debt has not been acting under 'undue influence' such that the security could be unenforceable. For this resason it has to be advice from a legal adviser who is independant of the bank and of the the principal borrower.
29th Jul 2004, 06:59
I have a Professional studies Loan with the HSBC, for which a few thousand is underwritten by a personal guarantee given by my mum.
Although there is no charge on her property involved, the HSBC nevertheless insisted that she nominate a Solicitor who could give her independant advice in relation to the liability she chose to assume.
Just as Justiciar said it would be, it was a short, painless meeting between the Solicitor and my mother, during which the Solicitor simply explained that if I were to default on the loan, then the bank could call in my mother's guarantee. I think the cost was around £50, (which I paid of course).
My mother then signed the guarantee forms in front of the Solicitor and the Solicitor countersigned to say that he had provided my mother with the relevant advice. The solicitor then returned the forms to the bank.
Job done. Simple really. I'm surprised two solicitors have refused to provide the said advice. We had no problems.