Bully Banks - Mortgage Brokers Are Becoming the New Enforcers

[LawyersConveyancing]

Now it's mortgage brokers who are taking up the cudgels to beat lawyers/conveyancers around the head when they don't do as the banks want. I have experienced two outrageous examples of this in recent times.

The first was a loan manager acting for one of the lesser, three-letter-name banks, who demanded that I should prepare a paper Transfer of Land and old Duties Forms in a post 1 July, 2017 PEXA matter. She was aware that these documents were not required in the circumstances, but she wanted them anyway "for our files".

The second is an independent mortgage broker who also requested a paper Transfer of Land, even though the matter is settling through PEXA. Why? Because the bank requires a draft Transfer of Land so that the spelling of the names of the purchasers can be checked, and they will not start the loan process with this draft. Nor would the bank start matters before it had a copy of the new Duties Form.

As we know, a Transfer of Land is not viewable in the PEXA workspace until it has been dealt with by both parties, and sometimes the other party doesn't accept the PEXA invitation immediately. Similarly, the new Duties Form isn't something that can just be knocked up and fired off immediately. So where did this leave me?

When I have explained the situation to mortgages brokers (not just these two, but many others), the result is invariably the same - an upset client rings up to ask why I am not assisting the broker and thereby putting their loan and purchase in jeopardy.

I have little choice when it comes to the bully broker who goes behind my back, white-ants me to the client in order to have me perform additional and unnecessary tasks, combined with a client who is not interested in who is right or wrong and just wants to save settlement.

I was always prepared to perform new tasks (working in the PEXA workspace, Duties Online etc.) in order to participate in a newer, simpler and more efficient system. However, it seems that the banks are emerging as the only beneficiaries of this process for the foreseeable future, as all the glitches seem to default to the lawyer/conveyancer.

And of course, clients expect that dealing with all of these issues should be dealt with as part of the conveyancing service at no extra costs, and the banks and brokers certainly encourage this view (they don't want to have to pay me to deal with transitioning problems).

Charging a fixed-fee has never been so difficult.

Lawyers Conveyancing

[dcondello]

My opinion is that Mortgage Brokers are just rogue in this field. My firm acts as an agent for a small bank and we too get bullying calls in both purchasing and discharge departments from brokers who want everything done yesterday which can result in upset customers calling because they are confused about what's happening. Plus we find that many don't 100% understand the settlement process which results in puzzling requests as stated by the original poster. I'd say they understand PEXA even less which is challenging.

[LawyersConveyancing]

You're spot on dcondell, and unless we clip their wings they will join the real estate agents in holding us to ransom by turning the client against us.

I've decided to take a rather dramatic step and cut all contact with banks and brokers. Doing this allows me to be a truly independent advocate for my clients because it eliminates the threat of delayed settlement as a tool of extortion.

Only this morning I had an agency for one of the Big4 call my office to say that there are insufficient funds in the client's account for settlement to proceed today. According to the caller, it is now my responsibility to call the bank and have the bank "certify" additional funds. I told the caller that his agency was engaged by the bank to deal with such matters, and it was up to him to call the bank. He refused, and threatened to crash settlement. When I asked him to put this threat in writing he refused, saying, "It's not our policy."

Previously, like most lawyers/conveyancers, I would have dropped everything to sort this problem out but instead I simply emailed the client's loan broker and bcc'd the client into the email. I told both of them that there is a problem as between the bank and its settlement agency and they need to sort it out in order to ensure that settlement will proceed. My job done, and now all responsibility rests with the loan manager and the client.

Unfortunately, not all loan brokers will accept responsibility for booking settlement because they don't want to be put in this position. This is when they tell the client all sorts of stories about it being the role of the lawyer/conveyancing to act as go-between in order to sort out problems with banks. NO MORE!

Sure, I have some battles to fight, but I'm winning them.

Lawyers Conveyancing

[LawyersConveyancing]

It seems that other interested parties are keeping up to date with what's happening on in the PEXA Community. See this article about this issue in Australian Broker at http://www.brokernews.com.au/news/breaking-news/banks-pressuring-brokers-in-digital-revolution-23913...

Lawyers Conveyancing

[surfius]

In my opinion, brokers act like crooks. Well, if you think about it, but they really are crooks. Our firm often gets calls from brokers, they intimidate us in different ways. Sometimes they can set something up, and we get the blame. It's extremely frustrating. As the head of the company, I took out a mortgage for 20 years. I needed to make repairs at the factory, upgrade equipment. Mortgage Advisor Bristol helped us in taking the money. He explained all the pitfalls and what we should expect.

[LawyersConveyancing]

Thanks @surfius, but despite what has been said it is still happening exactly as I described it years ago. I had this same argument with a broker only last week. He had the bright suggestion that I should prepare a "fake" Transfer of Land just so that he had something to give to the bank. When I told him that I did not want to be party to what could be alleged as a fraud perpetrated on the bank he took offence.

I contacted PEXA and asked that something should be published to make it clear to banks and broker that a Transfer of Land cannot be provided as a prerequisite to loan approval (just a page to which I could direct clients and brokers would be a help), and I was told that someone would look into it (which means that nothing further will be done), but don't hold your breath on this one.

Peter Mericka

Principal Lawyers

Lawyers Conveyancing