Mortgage Processing - How Broken Is It?

I will venture to say on behalf of all Lawyers and Conveyancers that Mortgage Processing and Settlements by our major Financial Institutions is abysmal. Is that the right descriptor? Perhaps crap is another. And this is at a time when mortgage loans are dominated by the Big 4 and they have at a guess 80% of the market. Sure they process a hell of a lot of loans. But so does the ASX and their back end systems process a hell of a lot of share trades. The SFE trades a hell of a lot of futures contracts.

The difference, securities trading is paperless. These institutions ASX & SFE made the neccessary changes years ago and are in a constant state of technical improvement. Plus securities are traded globally 24/7/365

I cant say I see any changes being made by the banks that has made any difference to service levels for lawyers conveyancers and dear I say it the poor old client.

Lets just illustrate this by example.

• We have to supply the bank with a copy of the Contract and Transfer of Land. We have many instances of this being faxed to the Mortgage Processing Unit (MPU) twice and even three times as they disappear into the black hole.


• Security documentation is issued to the Customer in triplicate and all too often there are mistakes, major minor it doesn't matter. The security documenation has to be re-issued.


• Booking Settlements - a simple thing to do - but why do we have to be kept in queues for 10, 15, 20 minutes. Why? - its not a cost to the bank - its an external cost borne by the Conveyancer. I may have to look at passing this cost onto the client.


• Cheques - oh dear - banks require a minimum of 3 or 4 days notice to book in settlement but cant give a payout figure til the friggin day of settlement!


• Settlements fall over - why? - signatures on the Contract, Transfer and Mortgage don't line up. Middle names are on the Mortgage but not the Transfer. Who pays? - well generally the client and almost never the bank


• Communication - Fax or Phone - that is the choice. And then we only get to speak to a tele-worker who has no personal responsibility for the file. No email. No web services. What an abysmal choice we have.


• Open for Business. We are still back in the Post Office days. Open the doors at 9 and closed on the dot of 5. Try web services. Anytime Anywhere 24/7/365 - no weekends, no public holidays, no sick leave, no superannuation ...
  

These things I describe above occur relentlessly. Every day (well every week day between 9-5 excluding public holidays) and almost every file.

The solution - a digital standard that applies across the Industry. NECS has part of the answers, the Banks have to deliver on the rest. It's not that hard.

Oh yeah, Lastly. The first bank that has the courage to implement change - without doubt - their market share would increase - significantly. Any takers?