on 10-12-2018 04:00 PM
After sending off a DA to St George Bank for a refinance which is to occur simultaneously with my client's purchase, I have been refused by both ANZ and St George to be a part of the workspace as I "dont have anything to do with it". I need to link the refinance to the purchase workspace as the purchase is not being held as security and I also need to advise my client of the funds she needs to contribute. In any event, as the DA has our details on it as representation on behalf of the client St George needs to communicate through myself. The fact that they have accepted the ANZ workspace invite when they have not been advised who the client has is refinancing with is obviously a cause for concern. I telephoned PEXA for some assistance and they also told me they can't help me and that conveyancers dont have anything to do with refinances essentially saying that our clients are not entitled to representation for refinances.
I have just replied to PEXA as follows:
"Ive just been told by PEXA support that they could not help me and that my broker would need to advise the mortgagee on their PEXA obligations. I disagree. Brokers do not know how to use PEXA nor do they have anything to do with PEXA.
It appears that its PEXA's responsibility to ensure that all parties to a transaction are complying with their obligations and know how to use it.
I was also told conveyancers do not have anything to do with a refinance and we don’t have to be invited. I don’t believe there has been any change in legislation saying that a registered proprietor is not entitled to representation when refinancing their property. I believe everybody, no matter what the circumstances, are entitled to representation.
Not only is it financial institutions taking away a client’s right to representation, PEXA also believes that there is no issue refusing a person of their right to representation. Somehow seems highly illegal to me, also would void any mortgage documents if challenged.
Might want to rethink your policies and better educate the financial institutions on their responsibilities, also how to use your product and provide them with relevant legislation. Everyone seems to throw about “the privacy law act” but nobody seems to abide by it given they are happy to refinance properties without speaking to their client, accepting a discharge authority from the client’s conveyancer but refusing to allow the conveyancer to be a part of the transaction. My client has not even spoken to her bank, I never advised them that she would be refinancing with ANZ yet they have happily accepted the workspace without any authorisation from the client or her conveyancer.
Very dangerous procedure going on there."
Lets see what they come back with.
on 10-12-2018 07:47 PM
Well said, and fully agreed. Whether a client wishes to be represented and/or advised by a conveyancer or solicitor in a transaction is entirely a matter for that client. The banks should certainly not be able to refuse to allow their customers legal representation (one wonders what the current Royal Commission would think of this practice), and PEXA certainly should:
1. Know better than to state that clients cannot have representation in refinances;
2. Certainly not spread ignorant misinformation to parties, especially if some parties may be less informed private consumers; and
3. Not enabling this abuse of power by the banks.
I look forward to PEXA's resolution also.
on 12-12-2018 12:37 PM
A refinance is a settlement transaction from one bank to another. In the majority of cases a legal practitioner will not be involved unless they are working on behalf of one of the banks. ANZ will allow a legal practitioner to be part of the workspace if the customer has provided the required authority to do so. The legal practitioner would be required to contact the bank to be part of the workspace, or alternatively send an invite themselves. There are some references made below with regards to a purchase transaction and a link to the refinance. I am across this particular workspace and the others that had been created. I have seen the conversations back and forth and it is important to note that ANZ should not have been sent an invite to the workspace for the purchase and have since withdrawn. Although ANZ is not the MOT in this case, receiving a DA from a legal practitioner does not automatically give the legal practitioner right to deal with the transaction. There is a particular section on a DA that provides that authority.
on 12-12-2018 01:03 PM
I am well aware of what a refinance is. If you flashback to pre 1 October 2018, the Legal Practitioner/Conveyancer was ALWAYS involved. We were required to complete the Transfers, the SRO duties forms, acquisition notices and attend settlement. A refinance could not occur and the bank would not verify a file until the legal practitioner/conveyancer had provided all the necessary documents to the banks. I am not too sure where you got your information that the majority of refinances occur without a client's representation, but it is incorrect. I do know that some refinances occur inhouse between the banks and thats usually when the client initiate the refinance themselves and that type of transaction isn't the same as mine.
In my case, both banks were instructed that I was acting on behalf of the client and that a workspace was required to be linked as the funds being advanced are to be used for a purchase which will be a clear title. A majority of refinances come about so that the client can use one property as equity to purchase another and with the roll out of PEXA and the mandatory requirement for settlements to occur through PEXA, the only way these types of transactions can occur is if the banks look at not only the discharge authority and their client's instructions but also to their own requirements and conditions of the loan that all properties must settle simultaneously. The banks are refusing to let us comply with the conditions the banks set themselves.
Furthermore, if a client wants legal representation, they are entitled to legal representation. Its a constitutional right. Its not up to PEXA or the mortgagee to decide whats best for the client and whether they are or are not allowed to have legal representation.
Also, Im not sure what DA your talking about but if we are noted on the DA as the agent representing the client, the client is authorizing the bank to deal with us and we need to be involved and the banks need to communication with us on behalf of the client instead of communicating between the banks and leaving both the client and their representation out without any involvement. I didn't just simply send the DA from my email and expect to be included in the transaction. Thats almost insulting that you would suggest that I am that ignorant. WE ARE NOTED ON THE DA AS THE AGENT FOR THE CLIENT.
My last three refinances all ran into the same issue with the banks and we were, have and always will be noted and authorised by the client on the DA as acting on behalf of the client when we send through a Discharge Authority. That just goes without saying.
on 12-12-2018 01:21 PM
Refinance settlements for a bank are predominantly "not" linked to a transfer. They are simply the customer wishing to change banks. The settlement occurs quite easily without a legal practitioner involvement. If the refinance is required to settle simultaneously with a transfer for funding or security purposes we allow for this in PEXA/Paper and manage the link as long as we are involved in both transactions. If we are not involved in both transactions we have no right to be part of the other settlement within PEXA. As already mentioned, as long as we have the appropriate document from our customer to authorize the involvement of a legal practitioner, we will do so. The customer is the source of all authority in our transactions. I'm happy to discuss further if you would like to give me a call or send me a direct message via PEXA community.
on 12-12-2018 02:35 PM
We believe you are missing the bigger picture here...the clients have nominated "Jennifer-MPC" as their agent on the Discharge Request/Authority and we would suggest "Jennifer-MPC" also, holds her clients' completed and signed "Client Authorisation" form. The clients DO NOT have to provide any additional authorisation. Their instructions are clear.
Whilst we agree, with your comment "Refinance settlements for a bank are predominantly "not" linked to a transfer." We are finding refinances "linked" to a transfer is becoming more common.
Would be interested to sight the legislation that states conveyancers/solicitors do not have anything to do with a refinance and are not able to join workspace.
on 12-12-2018 02:44 PM
I dont think you are understanding the situation. I am not talking about refinances where the client is simply changing banks. Your quite right there, they are relatively simple and also It has nothing to do with us if the client doesn't engage us. And that is completely fine. Those types of transactions are not the issue and those types of refinances are not the ones Im talking about because i don't do those refinances.
IN the last 4 weeks Ive had three refinances were the client is refinancing to fund their purchase. They are the only types of refinances I do. They are the only types of refinances I am concerned about. And they are the only types of refinances where banks refuse a clients legal and constitutional right to have legal representation. These are the only types of refinances where banks do not take their instructions from the client, do not look at the DA, do not care that we are listed as the authorised representative, and refuse to invite us to the workspace. These are transactions Im concerned about.
Most of my purchase files are attached to refinances and I am meant to be involved in both. The client has authorised us on the DA as her representation. We even mention on the DA that there is a refinance. WE ARE MEANT TO BE A PART OF BOTH THE REFINANCE AND PURCHASE SETTLEMENT. We need to coordinate it, we need to advise our client well in advance of funds they need to contribute to the purchase, we need to fully account to our client of all settlement monies, loan advances and payout figures prior to settlement taking place.
I dont know what type of transaction you are talking about it because it has no similarity to my current one. As you advised you need to be part of both transactions and your not. The bank hasn't been given authority by the client to distribute the loan advance to pay for her purchase settlement. You are not authorised to manage any link to any other workspace.
But in any event, we need to invited to all refinances that are attached to a purchase regardless of who links what, as how on earth can we advised our client of funds they need to contribute for settlement? How do we account to our client prior to settlement with a break down of settlement proceeds? How do we obtain their authority as to the distribution of funds within the workspace? Its a legal requirement and our PI Insurance wont cover any error in the distribution of funds if we fail to obtain our client's authority in relation to figures. There are so many complications, legalities and issues that arise from this view you are taking. Its extremely high risk and forces us into a position where we are unable to comply with our obligations as a conveyancer under the Act.
As previously advised, you always receive the appropriate documentation and authorisation from us. That is not the issue and when i call the banks to request an invite to the workspace, they all agree and say, yes yes we can see you on the DA but we still can't invite you to the workspace. The issue is not with us and its not with us incorrectly filling out the DA.
on 12-12-2018 03:33 PM
Not sure if, you were responding to us or previous comment???
If us, we think you have misread our comment...we agree you need to be invited into PEXA workspace and the client has authorised you in this regard.
We believe refinances are now more and more linked to purchases.
The big picture, that the banks are missing is you are authorised and hold authority, by the client/s, to join (be invited) to PEXA workspace.
Suggest you need to start advising the banks, your client/s will be seeking compensation from them, for any delay with finalising their purchase as a result of the banks refusing to invite you to workspace, to allow you to link with purchase settlements.
If, the banks won't allow you to join the PEXA workspace and they hold no authority to disburse funds...where are the banks planning on disbursing funds to? We doubt any claim would be bought against you in relation to your PI insurance...your are being prevented from carrying out your role by others and it appears you are keeping a record of all your dealings with banks.
on 12-12-2018 04:06 PM
No I wasn't responding to your reply. Thank you for your support! It is just so frustrating how the banks are making everything so difficult and time consuming!!
I actually have it in writing on this workspace from ANZ that they purposely intend to only advise funds available figure on the day of settlement and they will not respond to any request to do it earlier KNOWING that my client needs to transfer funds of her own to complete settlement and they know settlement will be delayed and my client will incur penalties. I have this in writing from ANZ...I actually cannot believe that they are intentionally causing penalties for my client and that I have it in writing from them that is what they are doing!
on 15-02-2019 10:00 AM
Totally agree with you, we had a refinance with 5 properties across NSW and QLD. It would have been nice if we were added to the workspace by the discharging mortgagees, but we were refused as well. Considering we were noted on the Discharge of Mortgage, we should have been invited to the workspace. This is something that will need to be looked at seriously.