PEXA source fund

[Clara]

I do not have a trust account and if I use the PEXA source fund because my client's loan is not enough, can my client deposit an amount in excess of the actual required amount and whatever surplus re-deposited to my client's bank account after settlement?  I asked this in the event that I note that the client's fund must  i can only ascertain the actual shortfall two days before settlement.

[Morri · Accepted solution]

I would imagine that if the deposit to the source account was more than required you could just create the source item for the full amount and include an additional destination line item with the customers account number for the surplus amount.

[Clara · Accepted solution]

HI Morri

Thanks for your response.  Just a follow up question, can I create a source fund using the purchaser's personal bank account or is it mandatory that if there is a shortfall, I should always  request and wait for PEXA to send me a "source account deposit form" and ask the client to deposit to this account and wait for the funds to be cleared 3 days before settlement.

What if there are only 2 days left causing settlement to fail, does the purchaser pay penalty interest as per contract?

[HeatherC · Accepted solution]

Hi Clara, 

Unfortunately not, as PEXA does not have the authority to debit any funds from your client's bank account. Source funds can only be provided via a bank [as mortgagee], a trust account, or the PEXA Source Account. 

I would suggest you create your source line item as early as possible, remembering (per @Morri's advice) that it may be advisable to over-estimate funds required, so PEXA can send you the form with the information you and your client will need. 

Heather

[TheDoctor]

Hi Clara,

Just a suggestion.

I am assuming that your clients savings account is with the same lender as their clearing loan?

If so, liaise with that lender, via PEXA Conversations.

They should be able to load a Source line item for the shortfall funds to balance the FSS.

We at Westpac have done this for clients before.

It is an unusual request but it can be accommodated.

If, however, your clients savings account is with a lender not involved with the settlement, you will have a problem.

They will probably need to credit funds to the clearing loan account, at least two days prior to the settlement, then any resultant settlement surplus can be handled by yourselves as Representative for the Mortgagee on Title.

thanks

Doc

[Clara]

Hi Doc

Can you further explain the last sentence in your reply.

[TheDoctor]

Hi Clare,

If your client has their shortfall funds with a different lender than the loan being cleared from settlement they will probably need to:

a) pay the amount of estimated shortfall into the loan being cleared, at least two days before settlement. This allows the lender time to factor in that payment in their payout figure.

b) this should result in a surplus of funds in the PEXA workspace at settlement. You can deal with that surplus of settlement funds in the same manner you would in most settlements.

Remember that the shortfall amount at that stage is just an estimate because you won't know the actual payout figure. So it is possible the shortfall may be underestimated and will not fully solve the problem. Speak to the lender of the clearing loan and explain the situation. They should be able to help you resolve the problem.

[OceanLegal]

How do I set up the PEXA source fund please?

[DMc]

In case of use

https://community.pexa.com.au/t5/Frequently-Asked-Questions/How-do-I-use-the-PEXA-Source-Account/ba-...