Mortgage drawdowns - lodge to solicitor's account?

[Lorz]

We're just drawing down our final stage payment on our mortgage and have been told by our solicitor that the Law Society recently changed the procedure and while he was originally just forwarding the banks cheques, they now have to lodge the cheque to their bank account, wait for it to clear and then issue it to us!

I can't understand why this is necessary and it seems to me that my solicitor is earning interest on money that I am paying interest on. When they eventually release the cheque next week, I will have to wait another 5 days for that cheque to clear because it's no longer a cheque from my banks mortgage dept (which I would have access to immediately)

Can anyone clarify this for me please?

 

[Cayne]

I can't understand why this is necessary and it seems to me that my solicitor is earning interest on money that I am paying interest on.

As far as im aware no interest is acruing on a solicitors client account.

 

[mathepac]

I believe that the new requirements are to create better audit trails for client accounts - full traceability of money in and out, which the old system did not adequately cater for.

The interest clock starts running once the cheque from the bank is lodged and AFAIK any interest in excess of €100 earned by a sum lodged to a solicitor's client account is due to the client.

 

[Lorz]

As far as im aware no interest is acruing on a solicitors client account.

Why wouldn't their client account earn interest?

The interest clock starts running once the cheque from the bank is lodged

Which is when my solicitor lodges it to THEIR client account - 5 days before I have access to the funds! Seems crazy?!?

 

[Vanilla]

First of all let me assure you that most solicitors would much prefer not to have to deal with stage drawdowns at all. It is just more administrative work for us.

In our office we have to get the first drawdown, to ensure compliance with any financial special conditions and results of searches and the last one, to ensure compliance with planning permission. Assuming there are no other financial conditions to be met in between we would much prefer the bank would release directly to client but the bank will not. If the bank send a cheque to us we HAVE to lodge it through our account due to law society regulations to ensure traceability.

The cheque is lodged to our account BUT does not clear through for either 3 or 5 working days, depending if it is the same bank we are with or not.

At the moment the interest rate on our client current a/c is less than one percent. The money is paid out the minute it clears through so there is no question of earning interest.

 

[Lorz]

Thanks Vanilla for clarifying that.