Authority for the shortfall

[Clara]

I have a purchase settlement in 2 days, my client said he signed an authority but the source funds from the bank shows only the net amount available.  The bank would not confirm if they have an authority.  What should appear in the source fund, is it the loan amount only or should they add the authorised amount for the shortfall?  If the bank says they do not have the authority, should I now request for PEXA source fund deposit slip so my client can deposit or is it too late?  I need a response asap please.

[Ames · Accepted solution]

Hi @Clara

The guidelines do require the incoming mortgagee to confirm whether they hold authority to debit at least 5 business days prior to settlement. You may want to contact PEXA Support if you have not had a response to your conversation requesting confirmation about authority to debit.

I would send a conversation to the bank confirming the total amount required to be contributed by the purchaser (loan proceeds and equity) and ask them to alter the source line items ASAP.

If the bank advises they do not hold authority to debit, you should create your own source line item for purchaser's equity as soon as possible, noting the traditional requirement to have funds in the PEXA Source Account 3 business days before settlement, to avoid delays.

Ames.

[Clara]

Hi Ames

Thanks for your advice.  I have been requesting the incoming bank to confirm if they hold a shortfall since the 7th of February 2018, and it is frustrating because until now I haven't got any response from them and today they have sent emails to the broker and the client that they are ready to settle but it still shows "NOT READY" in PEXA.  Settlement is in 2 days and I think it is too late to create my own source line item for the purchaser's equity.