on 19-03-2018 09:31 AM
The "PEXA PANIC" occurs when settlement time is approaching and there is no certainty that it will take place on time. We need to have confidence that settlement can be locked in at least 24 hours beforehand. This will allow subscribers to have certainty in terms of their matter file being in order without last minute panic, and will give consumers confidence that they will be able to collect keys and move in without stressful delays.
I almost had a mutiny on my hands last Friday, and my stressed conveyancer explained her frustration to me:
"We do all we have to do, and all we can do, to ensure that settlement will go ahead at the appointed time. The client is waiting with the engine of the removalist truck running, and she expects me to look after her and ensure that settlement will take place on time. But then something changes in PEXA. Someone hasn't done something that needs doing, and they won't do it before someone else does something they didn't realise had to be done. And I have to sit there and watch the screen, waiting for a conversation, or waiting for a response, and hoping that settlement won't automatically tick over to the next timeslot before the others get their act together. And in the end I have to ring the client with the upsetting news that settlement is delayed and have him pay out on me for not doing my job properly."
It seems that some parties, mainly the banks, are adopting the attitude that most things can be left until the last minute and it's just too bad if that inconveniences everyone else. PEXA was sold to us on the basis that settlement would be locked in, and then it was just a matter of waiting for the appointed time and everything would be done instantaneously. However, it all becomes a mess when the "locking in" of settlement doesn't occur until just minutes before the scheduled settlement time, or it's so late that settlement is pushed to the next timeslot an hour-and-a-half later.
Compare this with the paper settlement. With a paper settlement the conveyancer knows that when the settlement packed has been placed in DX for overnight delivery to GlobalX it's all "locked in". The bank has provided source funds details, cheque details have been finalised, the time is set, and everyone has a high degree of certainty - and all of this the day before settlement.
So, what to do? Perhaps the only way to make the problem apparent to all is to revert to a paper settlement if the PEXA settlement is not in "Ready" mode at least 72 hours beforehand!
on 19-03-2018 12:30 PM
I have to say i agree with you - there is definitely now a PEXA panic before settlement.
on 19-03-2018 01:36 PM
We need to find a remedy, and soon because this sort of thing undermines all of the good that PEXA brings.
on 21-03-2018 10:57 AM
We have the same sentiment. Now, I avoid settling through PEXA and prefer paper settlement. My blood pressure reading is back to normal.
on 21-03-2018 11:01 AM
on 23-03-2018 03:24 PM
Here's a typical example of an exchange with a client shortly before settlement:
Conveyancer to client: "We have just received the following update from your Bank in the electronic (PEXA) work space for your attention: 'Hi, We can not accept date and time as the purchaser has not returned the signed mortgage documents back that had been sent out 19/03 and 20/03. Documents would need to be returned and scanned no later than end of business tomorrow. Once returned and there are no outstanding items we can accept the settlement date'. Please advise as to when the loan documents will be submitted."
Client: "Why is the bank saying I haven't signed the documents when I specifically drove out to Lilydale to sign them with the day they were ready, back on Tuesday 20th March 2018?"
Conveyancer: "We can't speak for your bank, we have no control over their handling of your documents. You'll need to follow them up."
Client: "My loan manager says that all the documents have been signed and executed and sent to the bank via Express Post to their settlements team and they are yet to receive them before they can start verification process. Can you please confirm that settlement is okay for tomorrow."
Conveyancer: "Nothing has changed in the electronic (PEXA) work space - we are still waiting for your Bank to accept the settlement date and time."
Client: "Can you please follow this up urgently? I cannot afford a delay in settlement."
So, now my conveyancer becomes the meat-in-the-sandwich, tasked by the bank to sort out loan documents, and regarded by the client as being responsible for ensuring a timely settlement. Sure, this used to happen with paper settlements but now, instead of happening a number of days prior to settlement it's happening mere hours before settlement!
I am beginning to see this as a WorkSafe issue, as I am supposed to be providing my staff with a safe working environment. The stress of the PEXA Panic is palpable, and it's a growing problem!
We need a policy that requires "READY" status to be logged and locked no later than 3 days prior to settlement.
26-03-2018 02:08 PM - edited 26-03-2018 02:13 PM
Thanks for your post, found the same issue.
Do you think something like a clear countdown for each subscriber task needing completion & visible by ALL participants, would be helpful for all parties to be able to estimate when/where delays could occur...
Maybe PEXA could also tweak the order of things closer to manual/paper world. I.e. look at creating a Contract Settlement Date (established by the Contract Settlement Date) on opening a Workspace rather than focusing on a time; at least until it is certain that ALL parties are 'READY to book' & settle at mutually agreed time, on the Settlement Date.
Once Booked Notify all Subscriber Parties (primarily) of BOOKING confirmation.
Once Settled Notify all subscribers (primarily) of Settlement - for Subscriber to then to then pass on the confirmation or alternatively opt for automatic confirmation direct to clients and other 3rd parties.
Then maybe this would assist in clearer processes for all subscribers to operate in.
on 26-03-2018 03:19 PM
Hi @DMc, I know that I will be condemned as a bank-basher for saying this, but it really is the banks that generate PEXA Panic.
The banks rely on the PEXA Panic as a tool of coercion. Remember how the bank would refuse to accept a settlement booking unless and until the conveyancer had corrected the problem with the bank's Discharge Authority, or because the bank had failed to obtain an insurance Certificate of Currency from the borrower? Who had to perform these tasks for the bank, or risk a delayed or failed settlement - the conveyancer? And of course, when the bank deliberately delayed the settlement if we refused or failed to do as it demanded, a bank staff member would tell the client that we had caused the delay.
The PEXA Panic is the e-conveyancing equivalent of the deliberately delayed settlement. In other words, it's not a problem with PEXA or with the e-conveyancing process. It is a deliberately contrived and carefully crafted bullying tool.
In my view, the only way to eliminate the PEXA Panic is to stand firm against the bully banks that use it.
Banks should be required to have their transaction at the "READY" stage at least 3 days prior to settlement.
on 26-03-2018 05:31 PM
I am hoping that Westpac is not a culprit in this as we do try and keep our conveyancers well informed, in the lead up to settlement, if we are not ready.
Of course I can't say that we always adhere to this.
Westpac do not expect the conveyancers to chase up our outstanding items but we do inform them of what we are waiting on so that they can have an informed discussion with the client.
In my experience though, when we do this, the conveyancer is often more successful than the finance broker in obtaining things like building insurance.
One solution suggested is effectively a cut-off day (say 3 days before settlement) where all parties must be ready in the workspace.
How does this suggestion tackle the situation where one of the parties is not ready, not just the Banks?
If we are not ready, are we to push the settlement date out? I am sure none of us want to do that when it is still possible we may be ready for the scheduled settlement date.
I look forward to meeting some of you soon.