Hi @TJ,
We are regularly asked to "Please forward a copy of the Transfer of Land so that we can proceed with mortgage preparation."
Implicit in this request is the threat that the client's mortgage preparation will be delayed, and therefore settlement will be delayed, unless the practitioner urgently delivers a copy of the Transfer of Land.
Usually the request comes from the borrower's mortgage broker, who has no idea at all about PEXA. The broker (or whoever else is dealing personally with the borrower) usually has a checklist of items the lender will require, and it seems that this checklist has never been updated. Thus we have the frustrating situation where a Transfer of Land is requested even though the matter is being settled via PEXA.
In some cases the loan broker will consult the lender, and will be told that the matter will definitely not proceed unless a Transfer of Land is provided, and the client is cc'd into the email the mortgage broker sends to us. Of course, the client then contacts us to express concern, seeking reassurance that we will sort matters out.
In some cases the lender will insist that a copy of the PEXA generated Transfer of Land must be generated and delivered to the mortgage broker, so that the mortgage broker can forward it to the lender. Although we will tell the broker (and the bank) that the bank has access to the document through the PEXA workspace, we still have the broker/bank spooking the client into contacting us to insist that we do as the lender demands.
Our solution to this problem (and a number of similar problems with the banks and brokers regarding documents) is to inform all of our cyber-security/privacy policy which now prevents us from forwarding any documents to any third parties.
Our management system includes a Secure Document Exchange portal (SDX) which is encrypted and quite secure, and this is the only means by which we deliver documents to the client. We advise the client (and all third parties) that only the client can determine who will receive sensitive documents (and they're all sensitive) and that only the client can decide as to which documents can be provided to whom, and the terms on which they will be delivered. We advise our clients that email, fax and post are inherently insecure due to the possibility of hacking or misdirection, and that there is no control over the party receiving and disseminating them at the other end. Clients readily accept this, given the recent publicity regarding the need for tighter data protection. We also advise the client to use encrypted email, but also make the observation that a client is entitled to send document by insecure means if they wish to accept the risk of doing so.
The upshot is that we can now tell all and sundry that the only way they can obtain any document they require is to source if direct from the client. We also explain that the client has access to their portal 24/7, and so documents can be obtained quicker if sought direct from the client. This has also solved the problem of lenders threatening to delay settlement if we can't provide the Settlement Statement as early as they would like. We upload this document to the SDX portal as soon as it is available, and leave it to the client to argue with a lender who insists on receiving it before it has been created.
Do the lenders and brokers complain about this arrangement? You bet they do! This is because they can no longer pretend that settlement is being held up because we have not provided documents, they can no longer lose document and set us the task of replacing them, and they can feed misinformation to the client in order to pressure the practitioner. However, most important of all is that the lender is now accountable to the client and it is the lender who must respond when the client says, "But I gave you that document two weeks ago, what do you mean settlement is being delayed because you don't have it?"
So, back to the Transfer of Land. We tell the loan broker that there is no paper Transfer of Land and that the lender is aware of this, having accepted the PEXA invitation. The client is bcc'd on this email, just in case the loan broker tries to use the client against us. (Only last week I had a loan broker use the client in this fashion, and so I emailed the broker and told him that I would prepare a pretend Transfer of Land, labeled as such, so that he could show it to the lender if that's what it would take to have them progress the matter, but it would generate a cost of $150. Needless to say, the loan broker found a cheaper way to sort out the problem.) Sometimes it takes a practical approach to convince someone of the absurdity of what they are demanding.
I know that this response has been rather long, but it links in with the PEXA Panic, which can occur when a lender has a last-minute demand for a document and seeks to have the practitioner assume responsibility for it, failing which settlement will be delayed.
Peter Mericka
Lawyers Conveyancing
Peter Mericka B.A., LL.B - Property Lawyer - Lawyers Conveyancing
