2 weeks ago
We act for a purchaser who, in addition to the new property she is purchasing, is also providing another unencumbered property as security for a mortgage.
The client has handed the paper title for unencumbered property to the incoming mortgagee.
The incoming mortgagee has added this second title in to the PEXA matter.
My question is, does the incoming mortgagee now hold the right to deal with the unencumbered title as the client has handed it to them?
Does this mean the incoming mortgagee is authorised to create the CORD Consent in the PEXA matter for that title?
2 weeks ago
Great question! Technically no, the incoming mortgagee does not have right to deal as they are not on title. I would think that the more appropriate way to do this transaction in PEXA would be for you to create the consent on behalf of the client as the client is still on title with right to deal. Assuming bank would then place a mortgage over that title in the workspace. Of course you will need to get the title back off the incoming mortgagee to facilitate that.
For further clarification, you might like to contact ORG such as @DavidMcDowell-NSWORG.
2 weeks ago
Thanks for your reply. In this case, the matter settled today with the incoming mortgagee (CBA) telling us they were permitted to create the CORD consent in PEXA, which they proceeded to do!
The guidelines on the PEXA help articles in relation to CORD consent state that "To be able to create a Consent document you have to be a Mortgagee on Title, an Incoming Mortgagee or CT Controller."
Under which circumstances, then, would an incoming mortgagee be able to create a Consent document?
a week ago
I've done some investigating to get to the bottom of this issue. An incoming mortgagee would normally create the consent in the case of a standalone mortgage or refinance. This is partly due to the fact that a person would not be able to complete their own consent on PEXA and normally not represented by a practitioner for these types of transactions. In this case the individual would provide the paper CT to the incoming mortgagee in order to create the consent.
On the surface, it seemed more appropriate for the practitioner representing the purchaser to consent to a mortgage being placed over the property of their client. However in practice, this might not make sense from a banks perspective and would require a different set of processes depending on the parties involved.
So based on that, I think your bank was quite right to retain the CT and create the consent themselves. Apologies for the differing response on this one. I've discussed this with ORG who have come to the same conclusion also.
Happy transacting and thank you for raising such an interesting issue!