Mark Garnier, MP for Wyre Forest, suggested that as a result of the Mortgage Market Review HSBC had reduced the number of solicitor firms down to 43.
Turner responded: “I was not aware of that. I’m not aware that should in any way be a logical or direct consequence of the Mortgage Market Review.
“I can’t remember anything in the MMR which gets to the definition of appropriate panel of approved firms.”
In June last year the FSA published its thematic review on mortgage fraud in which it urged lenders to do better due diligence on third parties including solicitors, intermediaries and conveyancers.
Garnier said that a knock on effect from the clampdown on fraud was that consumers would lose out on choice.
Turner said: “Clearly we have to look at knock on consequences which we have not anticipated.
“It may be an indirect consequence out of our action on trying to tighten up fraud in the mortgage area.
“It’s a somewhat separate area from the core of the MMR and it may be that some of the ways we have tightened up and made firms more aware of it that HSBC have chosen to interpret it in that way.”
In the FSA’s thematic review the regulator said that many lenders identified solicitors as their largest single source of mortgage fraud risk.
The FSA also pointed out that that it was poor practice for a firm’s panel to be too large to be manageable.
