Nick Larkins Mortgage Fraud Controls Manager Lloyds Banking Group November 2014 Managing Lender Risks

Purpose of today’s presentation Dispelling the myths Our approach to panel management Challenges of panel management Why Lender Exchange?

Lloyds panel Large panel approx 4,400 firms across the UK Stable member numbers Open to new members No restriction on firm size No intention to reduce panel Proactive panel management approach

Approach to panel management Our Solicitor Panel provides an essential part of our risk control framework Compliance with bank policy and regulatory requirements Ongoing due diligence of panel members Panel application management Minimise fraud / negligence loss Improve standards Support smooth customer journey

Challenges today Transparency – ‘Fronting’ Land Registry delays CML Handbook concerns Scheme abuse PII Internally we are working on: Automating our redemption process Updates to CML part 2 to provide further clarity Acknowledging receipt of the COT

Why Lender Exchange ? We have already proven the concept works……………………… Underpins our strategy to maintain a large open Panel Avoids bank introducing its own Panel Fee Provides a secure way to easily inform LBG of key changes to firm ensuring panel records are always accurate Information submitted to one central point, shared by all participating lenders Allows bank to track movement of ‘problem individuals’ protecting your firms reputation and panel status Ongoing due diligence checks hardwired into system

In summary………. Good progress in recent years Valuable relationships forged – working together Market conditions are changing the risk profile Scheme abuse, manipulated deposits, hidden representation and basic CML breaches are a concern Expect continued assurance activity by lenders Lender Exchange is designed as a benefit to all parties……..

QUESTIONS? Lloyds Banking Group – Panel Management Team