Buy a home and Brumby pockets a five-figure sum. Stamp duty is a plain ripoff.
I HAVE always been amazed at how passively Victorians accept the outrageous impost of stamp duty when buying their homes. In which other circumstance would any normal individual willingly sign over tens of thousands of dollars to a government for nothing in return - not even a stamp?
Of all the oppressive and inequitable ways in which state politicians raise money, I would rate the exploitation of problem gamblers in pokie dens as the worst, and stamp duty on home purchases a close second.
Last financial year, John Brumby's government collected about $3.6 billion in duty on property transfers. Based on current stamp duty rates, anyone buying a house in Melbourne at the June quarter median price of $559,000 faced an additional bill of $28,610 to cover Brumby's share.
Most victims of this fiscal larceny are middle class. Many are mortgaged close to their financial limits just to cover the house purchase. Stamp duty adds tens of thousands of dollars to their mortgages - and years to the length of time they must toil to pay it all off.
Many of these people are also second or third-time mugs. Sometimes, through no fault of their own, people have to move house - to cater for extra children, perhaps, or to scale down after a divorce. On each occasion, the state helps itself to an additional five-figure slab of their savings.
Why do we put up with this? Why isn't this outrage higher on the list of issues people will consider when casting their votes at the state election on November 27? And why isn't there a riot outside Brumby's office when he indicates, as he did this week, that large stamp duty cuts are off the table?
One explanation for our collective acquiescence on stamp duty is what might be called the wealth illusion. When prices rise, owner-occupiers tend to feel richer - even though they still only have a house and a mortgage. As long as people feel like they're ahead, the mandatory payment to the state of a premier's ransom can be dispatched to the ''hey, who cares?'' bin.
But this explanation flies only as long as property values head north. If prices were to go into reverse - as some economists believe they will, and as has already occurred in many developed countries - some Victorians would wind up with houses worth less then their loans. Thirty grand or so lost to stamp duty wouldn't seem so trivial then.
There are additional problems in the way stamp duty is perceived. When public debate flares on the subject, backyard ''experts'' sometimes bob up proffering superficially persuasive theories on why stamp duty might not actually hurt you. Please ignore these people and be in no doubt: when the state relieves you of $28,610, you really are being relieved of $28,610.
Emotional factors involved in property transactions may also contribute to public apathy. In the afterglow of a house purchase, a huge bill for stamp duty might not seem so unconscionable when it turns up some weeks later amid all the excitement of moving in to the new digs.
But I wonder how people would feel if they had to pay stamp duty up front? What if Brumby gave up what he normally does on Saturdays and spent the day showing up at auctions and demanding tens of thousands of dollars on-the-spot from successful bidders? That might focus their minds. And it certainly wouldn't win the Premier any friends.
The case for Brumby to slash stamp duty is not just about fairness to individuals. As property values have soared over the past decade, and as the government has cynically used this to rake in extra billions in stamp duty, the state finances have become dangerously exposed to any reversal in property prices.
In his comments this week hosing down expectations of stamp duty relief, Brumby protested that the state already had a narrow revenue base. ''The question is, how do you pay for it?'' he said.
Let me offer a couple of suggestions. I have written before of a potentially large revenue stream available to any government with the courage to convert suburban freeways into state-owned tollways. The current situation, in which some are tolled and some aren't, is illogical and discriminatory.
Modest tolls on freeways - lower than those on private roads such as CityLink - would be a far more decent, equitable and sustainable way to raise money than preying arbitrarily on gambling addicts and home buyers. The tolls could also act as a congestion tax, perhaps levied at higher rates in peak times. A logical starting point would be to toll the new Frankston bypass.
Another alternative source of cash - admittedly a challenging one politically - could be to persuade the Gillard government to think again on its Henry tax review options and consider a small increase in the main source of state revenue, the GST.
In the meantime, by insisting there are no practical alternatives to his punitive rates of stamp duty, Brumby presents a gift-wrapped political opportunity to his opponent, Ted Baillieu.
The Age . Tom Ormonde . 15/10/10
Friday, October 15, 2010
Thursday, September 30, 2010
Streamlined identity checks required to prevent property fraud
Electronic checks and balances throughout the property sales transaction process need to be enforced to better protect the seller from a fraudulent sale, according to the Australian Institute of Conveyancers’ Tasmanian division president Helen Kent.
Referring to a recent news story about a Perth property investor whose Perth property was sold through a scammer in Nigeria while he was overseas, Kent said this could have been prevented if the proposed electronic conveyancing system was in place.
She said it’s particularly relevant for interstate or international investors who don’t necessarily deal with agents, banks, conveyancers and solicitors face-to-face but can have their identity checked through a streamlined verification process.
“The real estate agents may hate it because it’s an additional form for them to fill out but they’re the first port of call for vendors and in the case of the Perth investor it was where the fraudulent sale process first started,” said Kent.
“It’s all very well to see an email saying ‘I’d like to sell my property’, but agents also need to take responsibility in verifying identities.
“The electronic client authorisation form has been in the pipeline for quite some time,” she said.
But Kent now demands that the electronic form development process speed up to provide better protection for vendors.
Another related issue that needs to be addressed is the record of signatures, she said. “Presently the only document where a purchaser’s signature is recorded is at the Land Titles Office on the mortgage papers, as purchasers in Tasmania aren’t required to sign the transfer document.”
She said in the case where a property owner pays cash for a property there is no record of that property owner’s signature.
“This should also become part of the electronic process so it can be easily accessed online (by the appropriate people) for verification purposes,” said Kent.
She also encourages investors to ensure their title is in a safe place where their will or other valuable documents are kept.
“This is just another necessary safeguard measure vendors must take. Purchasers and property owners may also safeguard themselves against fraud by taking out title insurance,” she said.
The Perth investor’s scenario should be a wake up call to all involved in the sales process that they must always check identification, said Kent.
The same applies to property managers when a ‘so-called’ property owner wants them to manage a property.
Kent said in a situation recently, a tenant fraudulently represented himself to the property manager as the owner of the property he tenanted so he could sub-lease the property to students for a higher price than he was paying.
Fortunately he didn’t get away with it and was caught out, but this situation is happening, said Kent.
Source Australian Property News
Referring to a recent news story about a Perth property investor whose Perth property was sold through a scammer in Nigeria while he was overseas, Kent said this could have been prevented if the proposed electronic conveyancing system was in place.
She said it’s particularly relevant for interstate or international investors who don’t necessarily deal with agents, banks, conveyancers and solicitors face-to-face but can have their identity checked through a streamlined verification process.
“The real estate agents may hate it because it’s an additional form for them to fill out but they’re the first port of call for vendors and in the case of the Perth investor it was where the fraudulent sale process first started,” said Kent.
“It’s all very well to see an email saying ‘I’d like to sell my property’, but agents also need to take responsibility in verifying identities.
“The electronic client authorisation form has been in the pipeline for quite some time,” she said.
But Kent now demands that the electronic form development process speed up to provide better protection for vendors.
Another related issue that needs to be addressed is the record of signatures, she said. “Presently the only document where a purchaser’s signature is recorded is at the Land Titles Office on the mortgage papers, as purchasers in Tasmania aren’t required to sign the transfer document.”
She said in the case where a property owner pays cash for a property there is no record of that property owner’s signature.
“This should also become part of the electronic process so it can be easily accessed online (by the appropriate people) for verification purposes,” said Kent.
She also encourages investors to ensure their title is in a safe place where their will or other valuable documents are kept.
“This is just another necessary safeguard measure vendors must take. Purchasers and property owners may also safeguard themselves against fraud by taking out title insurance,” she said.
The Perth investor’s scenario should be a wake up call to all involved in the sales process that they must always check identification, said Kent.
The same applies to property managers when a ‘so-called’ property owner wants them to manage a property.
Kent said in a situation recently, a tenant fraudulently represented himself to the property manager as the owner of the property he tenanted so he could sub-lease the property to students for a higher price than he was paying.
Fortunately he didn’t get away with it and was caught out, but this situation is happening, said Kent.
Source Australian Property News
Saturday, September 18, 2010
Helpline runs hot with gripes about estate agents
Jason Dowling the age
September 18, 2010
EVER thought a property you were interested in was underquoted? Not happy with a real estate agent?
You're not alone. More than 10,000 calls were made last financial year to a helpline for those concerned about the conduct of Victorian real estate agents. Consumer Affairs dealt with 661 disputes involving agents, leading to settlements totalling $223,284.
In one case, a consumer paid a holding deposit on a block of land and the block was later sold to another buyer who paid a full deposit.
Other cases include a buyer who was told a property had a lock-up garage when it only had a carport, and a property falsely advertised as having reverse-cycle heating and cooling.
In July, Consumer Affairs conducted a blitz on underquoting that led to two prosecutions. A separate analysis of complaints to Consumer Affairs about misleading pricing ''found possible breaches in nine cases''.
Formal warnings were issued to six agents advertising less than the vendors' recorded asking/reserve price - letters were also sent to two agents ''to educate'' on price advertising.
Civil action was taken against Stockdale & Leggo (Craigieburn/Roxburgh Park) alleging misleading price advertising of three Craigieburn properties. ''One property was advertised as 'private sale: $290,000 plus', despite the authorised sale price being $330,000,'' the Consumer Affairs annual report stated.
Despite the breaches, Real Estate Institute of Victoria spokesman Robert Larocca said agents generally do the right thing.
He said the number of Consumer Affairs inquiries relating to real estate agents had declined, while the number of house sales had increased.
September 18, 2010
EVER thought a property you were interested in was underquoted? Not happy with a real estate agent?
You're not alone. More than 10,000 calls were made last financial year to a helpline for those concerned about the conduct of Victorian real estate agents. Consumer Affairs dealt with 661 disputes involving agents, leading to settlements totalling $223,284.
In one case, a consumer paid a holding deposit on a block of land and the block was later sold to another buyer who paid a full deposit.
Other cases include a buyer who was told a property had a lock-up garage when it only had a carport, and a property falsely advertised as having reverse-cycle heating and cooling.
In July, Consumer Affairs conducted a blitz on underquoting that led to two prosecutions. A separate analysis of complaints to Consumer Affairs about misleading pricing ''found possible breaches in nine cases''.
Formal warnings were issued to six agents advertising less than the vendors' recorded asking/reserve price - letters were also sent to two agents ''to educate'' on price advertising.
Civil action was taken against Stockdale & Leggo (Craigieburn/Roxburgh Park) alleging misleading price advertising of three Craigieburn properties. ''One property was advertised as 'private sale: $290,000 plus', despite the authorised sale price being $330,000,'' the Consumer Affairs annual report stated.
Despite the breaches, Real Estate Institute of Victoria spokesman Robert Larocca said agents generally do the right thing.
He said the number of Consumer Affairs inquiries relating to real estate agents had declined, while the number of house sales had increased.
Tuesday, September 14, 2010
The Nigerians are coming - title fraud in WA
Aja Styles
September 13, 2010 - 5:55PM
Property sales should be better policed in the wake of a scam that resulted in Perth man Roger Mildenhall having a property sold without his knowledge, the Real Estate Institute of Western Australia has admitted.
Mr Mildenhall was living in Cape Town when his Deanmore Road duplex in Karrinyup was sold without his knowledge for $485,000 in June by Nigerian-based scammers purporting to be him.
The scammers then tried selling his Hale Road home in Wembley Downs, which was full of his furniture and two cars, but were foiled when a neighbour alerted Mr Mildenhall to the sale.
REIWA chief executive, Anne Arnold, has called for more secure documentation methods, particularly over land title transfers, to be overseen by the state government.
"The Certificate of Title is a tradable commodity, just like cash, so it's probably time for Landgate to look at more sophisticated security measures on the actual document, such as a microchip as we have on our passports," Mrs Arnold said.
"This scam was very slick, but the key point at which it could have been detected was during the settlement process.
"The fact that the scammers were able to either forge a Certificate of Title or trick Landgate into issuing a new certificate of title, means we really need to look at much greater levels of security around the actual document itself.
"Under the Act, agents are required to search the title at the time of listing a property, but the bona fides of the seller are not required to be checked. In most cases agents are dealing with clients that they know so it's not an issue."
She said it was her understanding that once the Certificate of Title has been registered by Landgate, the transaction was complete and the property has changed hands, so it was unlikely that Mr Mildenhall would be able to recover the property.
Mrs Arnold said REIWA would be working closely with the Real Estate and Business Agents Supervisory Board to review current protocols, but doubted that identity checks on sellers would have prevented this particular case from occurring.
She said that agents were finding that an increasing number of properties were being sold online and on instructions to agents via emails, faxes and phone calls, with little or no face-to-face interaction with sellers.
"While these methods are very convenient for interstate and overseas buyers and sellers, it is now more important that everyone involved in the transaction takes steps to authenticate the process and, in particular, the seller's ownership of the property", Mrs Arnold said.
"This has been a 'perfect storm' of events by a very sophisticated outfit which seemed to have a great deal of knowledge about this owner, his property, his overseas movements, and the legal process in WA for selling homes."
Commissioner for Consumer Protection Anne Driscoll agreed that the processes should be reviewed thoroughly.
"It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong," she said.
"This no doubt this will give some clarity about what should/could have been done to prevent it.
"In the interim the two regulatory Boards responsible for the real estate and settlement industries have issued email warning to all licensees in WA asking that they be particularly vigilant to confirm the identity of owners of property and that any signatures on legal documents are verified before proceeding with a real estate transaction.
"Separate to this issue work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard."
WA Today
September 13, 2010 - 5:55PM
Property sales should be better policed in the wake of a scam that resulted in Perth man Roger Mildenhall having a property sold without his knowledge, the Real Estate Institute of Western Australia has admitted.
Mr Mildenhall was living in Cape Town when his Deanmore Road duplex in Karrinyup was sold without his knowledge for $485,000 in June by Nigerian-based scammers purporting to be him.
The scammers then tried selling his Hale Road home in Wembley Downs, which was full of his furniture and two cars, but were foiled when a neighbour alerted Mr Mildenhall to the sale.
REIWA chief executive, Anne Arnold, has called for more secure documentation methods, particularly over land title transfers, to be overseen by the state government.
"The Certificate of Title is a tradable commodity, just like cash, so it's probably time for Landgate to look at more sophisticated security measures on the actual document, such as a microchip as we have on our passports," Mrs Arnold said.
"This scam was very slick, but the key point at which it could have been detected was during the settlement process.
"The fact that the scammers were able to either forge a Certificate of Title or trick Landgate into issuing a new certificate of title, means we really need to look at much greater levels of security around the actual document itself.
"Under the Act, agents are required to search the title at the time of listing a property, but the bona fides of the seller are not required to be checked. In most cases agents are dealing with clients that they know so it's not an issue."
She said it was her understanding that once the Certificate of Title has been registered by Landgate, the transaction was complete and the property has changed hands, so it was unlikely that Mr Mildenhall would be able to recover the property.
Mrs Arnold said REIWA would be working closely with the Real Estate and Business Agents Supervisory Board to review current protocols, but doubted that identity checks on sellers would have prevented this particular case from occurring.
She said that agents were finding that an increasing number of properties were being sold online and on instructions to agents via emails, faxes and phone calls, with little or no face-to-face interaction with sellers.
"While these methods are very convenient for interstate and overseas buyers and sellers, it is now more important that everyone involved in the transaction takes steps to authenticate the process and, in particular, the seller's ownership of the property", Mrs Arnold said.
"This has been a 'perfect storm' of events by a very sophisticated outfit which seemed to have a great deal of knowledge about this owner, his property, his overseas movements, and the legal process in WA for selling homes."
Commissioner for Consumer Protection Anne Driscoll agreed that the processes should be reviewed thoroughly.
"It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong," she said.
"This no doubt this will give some clarity about what should/could have been done to prevent it.
"In the interim the two regulatory Boards responsible for the real estate and settlement industries have issued email warning to all licensees in WA asking that they be particularly vigilant to confirm the identity of owners of property and that any signatures on legal documents are verified before proceeding with a real estate transaction.
"Separate to this issue work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard."
WA Today
Friday, August 27, 2010
ECV joins national standards body LIXI
In a further step towards the establishment of a national e-conveyancing system, the Victorian Department of Sustainability and Environment has joined LIXI.
The National E-Conveyancing Development was set up earlier this year to develop a national e-conveyancing system (NECS).
The establishment of such a system would offer lenders considerable cost savings when settling a mortgage.
Past projections have noted that a fully operational NECS would reduce the average cost of a major bank settling a loan from the mortgage preparation step to the registration step by about $68, representing a $46 million cost saving across the lending industry.
LIXI has been working with industry partners and other state titles offices for the past two years on the specification of the data standards to ensure that the internet-based transactions are compatible around the nation.
LIXI chief executive, Erik Fenna, said the news was positive for the industry.
“As a member based standards body, LIXI welcomes the opportunity to ensure that national data standards meet the requirements for the whole industry,” Fenna said.
“The successful take up of electronic conveyancing by industry requires common standards for communication across the states, regardless of the system ultimately being used.
“The inclusion of DSE with their ECV system of full online lodgement and settlement is an essential step toward the successful design, development and implementation of national electronic conveyancing.”
Chris McRae, executive director Land Victoria, in DSE said: “DSE is a keen supporter of national electronic conveyancing and I am confident that our membership of LIXI will assist in reaching that goal.”
SOurce http://www.australianbankingfinance.com/news/
The National E-Conveyancing Development was set up earlier this year to develop a national e-conveyancing system (NECS).
The establishment of such a system would offer lenders considerable cost savings when settling a mortgage.
Past projections have noted that a fully operational NECS would reduce the average cost of a major bank settling a loan from the mortgage preparation step to the registration step by about $68, representing a $46 million cost saving across the lending industry.
LIXI has been working with industry partners and other state titles offices for the past two years on the specification of the data standards to ensure that the internet-based transactions are compatible around the nation.
LIXI chief executive, Erik Fenna, said the news was positive for the industry.
“As a member based standards body, LIXI welcomes the opportunity to ensure that national data standards meet the requirements for the whole industry,” Fenna said.
“The successful take up of electronic conveyancing by industry requires common standards for communication across the states, regardless of the system ultimately being used.
“The inclusion of DSE with their ECV system of full online lodgement and settlement is an essential step toward the successful design, development and implementation of national electronic conveyancing.”
Chris McRae, executive director Land Victoria, in DSE said: “DSE is a keen supporter of national electronic conveyancing and I am confident that our membership of LIXI will assist in reaching that goal.”
SOurce http://www.australianbankingfinance.com/news/
Friday, August 06, 2010
Conveyancing Excellence
Matt Duker and Brett Hayton have combined their conveyancing practices and formed a new incorporated legal practice Conveyancing Excellence Pty Ltd trading from 300 Centre Road Bentleigh. Brett Hayton is the principal.
Check out the new website Conveyancing Excellence
Thursday, July 01, 2010
A new phase for the National Electronic Conveyancing agenda
NECDL TAKES OVER THE DRIVING SEAT
On 1st July National E-conveyancing Development Ltd (NECDL) assumed responsibility for progressing the national e-conveyancing system in Australia.
It was always envisaged that when the requirements for NECS were pretty well settled a new entity would take over responsibility for provisioning the system. That time has now come and NECDL is the entity formed early this year in accordance with COAG determinations to make national e-conveyancing a reality. We told you about NECDL and the transition of our role to it in Issue 43. It is a company owned equally by the Governments of Queensland, New South Wales and Victoria and governed by a board of directors nominated by its owners and key industry stakeholder associations.
You can follow the path that has brought us to this point on our website. It hasn’t always been a smooth ride but the constructive input and enthusiastic cooperation from stakeholders, large and small, has enabled us to give NECDL a sound basis to work from. For that we thank you most sincerely.
The Chairman of NECDL, Alan Cameron, believes that this point marks the transition to a new and fruitful stage in delivering a national e-conveyancing system for Australia. He said the company aims to develop an e-conveyancing system that is national, secure and sustainable that picks up from the substantial development work we have done. Marcus Price, who has joined the company as its CEO with a project management and IT background, will lead this stage.
Recognising the work done so far, Mr Cameron said: “There are many strong believers in the benefits of a national e-conveyancing system, but none more so than Simon Libbis who has led NECO. Simon has driven the thinking around the many issues that face such a system and delivered what is now a substantial body of knowledge on e-conveyancing. He has been well supported by many stakeholder groups and particularly the National Project Team.”
“I would like to personally thank Simon for his tenacity and vision as Executive Director of NECO. I would also like to pay tribute to the National Project Team for its important contribution”, Mr Cameron said.
Marcus Price has advised that he is well under way with the next phase for the work which involves a much stronger commercial focus. He is, however, at pains to point out that the company is not starting again but picking up from where work has got to so far.
Talking about the company’s intention, Mr Price said: “NECDL’s business plan for its initial phase will include an assessment of the current intellectual property on hand from all sources – including that held by Victoria – as well as the regulatory environment needed to sustain e-conveyancing across Australia.
“It is expected that the plan and its key findings, including a governance and funding model, will be available in October 2010 and we will be seeking your feedback”, he said.
Recognising that ongoing industry and interest group consultation is critical to any program in this area, the company will be providing an update on its progress to all stakeholders via a web-cast on 20 July 2010 (12 noon AEST). It is one of several updates the company plans to deliver by web-cast over the next few months. Full details of how to access the web-casts will be sent to you shortly. In the meantime, you might like to put this first date in your diary. The web-casts will also be available on demand if this date and time doesn’t suit you. Any questions or comments you have can be directed toinfo@necd.com.au.
NECDL is well positioned to reach the next milestone of the journey - provisioning of the system. We wish it every success in its endeavours and trust that you will continue your support for this important national initiative. This will ensure that in the near future we will have a truly national electronic system that delivers benefits to all participants in the conveyancing process and contributes to securing a seamless national economy for Australia.
Sunday, June 27, 2010
Banks face crackdown on High Exit Fees
Banks which charge unfair mortgage exit fees face a crackdown from the Australian Securities and Investments Commission (ASIC).
From July 1, ASIC will also have the power to go after institutions which seek to rebadge current exit fees as upfront entry fees.
Treasurer Wayne Swan and Financial Services Minister Chris Bowen said these new powers would make it easier for borrowers to switch to a competitor offering a cheaper rate, providing a major boost for competition in the mortgage market.
"Currently, some banks are using mortgage exit fees to lock customers into their home loans," Mr Swan and Mr Bowen said in a statement on Sunday.
"Exit fees can be so high that there is no incentive to switch to another lender, even if they are offering a substantially lower interest rate.
"The Government is determined to make the banking system work for families, not against them, and these tough new powers are a major step to delivering on that commitment."
From July 1, ASIC will have the power to take action against any bank for charging an early exit fee considered unfair or unconscionable.
Consumers will also be able to challenge early exit fees that are unfair or unconscionable.
Mr Swan and Mr Bowen said ASIC was most likely to take action against banks trying to profit from exit fees or establishment fees rather than fees which merely recover a fair level of costs.
Any mortgage exit fee found by a court to be unfair will be declared void, with ASIC able to seek refunds for customers.
ASIC released guidance on Sunday on how it proposes to tackle unfair terms.
Following consultation with the industry, ASIC will now develop a specific framework on regulation of early mortgage exit fees.
"The global financial crisis has created some significant challenges for competition in the mortgage market," they said.
"These can't be solved overnight but the Gillard government is determined to take action wherever possible to boost competition and improve protections for Australian families."
Australian Bankers Association (ABA) chief executive Steven Munchenberg said Australia had the lowest entry fees for mortgages compared to the United States and United Kingdom.
"That means it is cheaper to get a mortgage here than in other countries," Mr Munchenberg said in a statement on Sunday.
"Banks achieve this by deferring some of the costs of establishing a mortgage and only charging those customers that change their mortgages in the first few years."
Early mortgage exit fees included the banks unrecouped costs associated with the establishment of the loan, Mr Munchenberg said.
"Exit fees may also include the credit providers average administrative costs and any loss to the credit provider arising from the early termination.
"For example, a credit provider may agree not to charge the full loan establishment costs at the start of the loan on the basis that it may recoup those costs if the loan runs beyond a certain term."
Deferring up-front fees such as legal service fees reduced the cost to customers of setting up new loans, the ABA said.
It was important lenders were consulted by ASIC, Mr Munchenberg said.
National Australia Bank (NAB) said it welcomed the tougher new laws.
It said it would be good for bank customers, increasing competition and giving customers a fairer deal and the ability to access better rates.
NAB Group chief executive Cameron Clyne said while the full details of the new laws had not been reviewed by the bank, it was generally supportive of the measures.
"If these new laws banning unfair mortgage exit fees encourage greater competition and give Australians more power to walk down the road and find a better deal for their mortgage then that's a great thing for all Australians," Mr Clyne said.
Friday, May 21, 2010
Home Information Packs have been suspended
The Government has announced the suspension of Home Information Packs with immediate effect from 21 May 2010.
Homes marketed for sale on or after 21 May 2010 will no longer require a Home Information Pack (HIP).
The Energy Performance Certificate (EPC) will be retained. Sellers will still be required to commission, but won't need to have received an EPC before marketing their property.
Thursday, May 20, 2010
Lawyers line up ANZ and Perpetual
VICTORIAN property lawyers are demanding an urgent overhaul of ANZ's mortgage procedures following the bank's recent move to outsource home loan settlement functions to Perpetual.
In a damning letter sent to the bank last month, the Law Institute of Victoria's acting president Caroline Counsel highlights deficiencies in ANZ mortgage processes which she claims have "substantially undermined" the certainty of property sales.
The bank has since apologised to the LIV.
In the February 4 letter leaked to BusinessDaily, Ms Counsel states that ANZ and Perpetual have committed only limited resources to booking property settlements which has led to confusion and frustration for conveyancing lawyers and their clients.
"Law Institute of Victoria members have reported that there have been instances when the Perpetual representative has not attended settlement at the allocated time," Ms Counsel told ANZ in the letter.
"Settlement in such cases has, of course, not occurred at the allocated time, and this has necessitated the inconvenience of re-booking settlement."
ANZ outsourced settlement responsibilities to Perpetual Mortgage Services last year as part of a wider effort to bring its mortgage administration and settlement systems in line with industry standards.
However, the move has been disastrous with communication problems between the bank and Perpetual leading to delays for home buyers and sellers completing transactions.
The institute's list of complaints include:
SALE failures caused by Perpetual not meeting settlement deadlines.
"UNDULY long" waiting times for lawyers seeking information over the phone from the bank and Perpetual.
FAILURE by Perpetual to provide details of payments due by property buyers within 48 hours of agreed settlement dates.
Ms Counsel told the bank that Perpetual's inability to provide payout numbers before settlement days meant that settlements had to be postponed in many cases because there was not enough time for cheques to be drawn by purchasers.
"When settlements fail as a result of ANZ's processes, there are additional financial and emotional burdens imposed on parties," Ms Counsel told the bank in the letter.
"The LIV urges ANZ to address settlement process issues, as they substantially undermine the certainty of transactions for parties."
In a replying letter sent on February 24, ANZ's head of mortgages, Michael Bock, acknowledged that the deficient settlement procedures had caused inconvenience for solicitors and parties involved in property transactions.
"It is clear from feedback from the profession that the changes we introduced to our settlements process have caused frustration and, in certain circumstances, significant inconvenience for some solicitors, conveyancers and clients - and we sincerely apologise," Mr Bock told the LIV.
"We are working hard to fix these problems ... We understand your concerns, and ANZ is committed to making the necessary changes to ensure we meet your needs and clients' expectations for timely and efficient settlement of all purchases and discharges."
Mr Bock stated that ANZ had established a special team of senior executives to drive improvements to the group's mortgage processes.
The urgent change program will try to simplify settlement procedures by increasing phone contact staff and investment in new technology.
LIV chief executive Michael Brett-Young said conveyancing solicitors also experienced settlement issues with other banks but the problems were more profound at ANZ.
"We've had more complaints from our conveyancing solicitors about ANZ and we are confident that the other banks are meeting requirements to achieve timely and smooth settlements for clients," he said yesterday.
A Perpetual spokesman declined to comment on the LIV's concerns about its performance under the outsourcing deal with ANZ.
Thursday, May 06, 2010
Westpac Comes Last For Service: Survey
Westpac has ranked as the worst bank for customer service in a survey, one day after announcing a record profit.
More than four-in-ten respondents to the Finance Sector Union Better Banking survey, or 42 per cent, said Westpac service was unsatisfactory, more than any other bank.
The poor showing by Westpac comes after the company announced a record $2.98 billion first-half net cash profit yesterday. Westpac also outraged consumers in December by hiking rates on its mortgages 20 basis points over the 25 basis point increased announced by the Reserve Bank.
''Westpac's decisions to move too far on interest rates, provide inadequate staffing, send Australian jobs offshore… are reflected in the public's perception of them,'' said FSU National Secretary Leon Carter.
''Unfortunately all banks engage in these sorts of tactics,'' said Mr Carter, who also highlighted large executive pay packets and rising fees as contributors to the banking sector's public perception problems.
Westpac's dissatisfaction ranking compared with 33 per cent for Commonwealth and 30 per cent for ANZ. Westpac-owned St George garnered 27 per cent of respondents complaining of subpar customer service.
Overall, the study shows that 28 per cent of customers are dissatisfied with their banks, the FSU said.
The report also showed 16 per cent of respondents were ''very uncomfortable'' with their debt levels, while 29 per cent consider themselves ''uncomfortable'' with debt. Australians have continued to wade into the housing market through the period of the global financial crisis, pushing the average mortgage in Australia to nearly $300,000.
Borrowers are paying nearly $300 more a month on an average 25-year, $300,000 mortgage repayment after the Reserve Bank this week raised rates for the sixth time in eight months.
The Better Banking survey, conducted by the FSU, is based on the responses of 2744 customers nationwide.
Friday, April 23, 2010
Identity Verification System 'A Failure'
A $28 MILLION Howard government plan to create a high-tech system to help stamp out identity crime has been plagued by technical difficulties and has failed to achieve its aims, according to the Australian National Audit Office.
The national document verification service, announced by the Coalition in 2006, is a computer network which is supposed to link federal and state government agencies that issue key identity documents such as birth certificates, passports and driver's licences.
It is meant to be used to check the veracity of documents presented by people as proof of identity when applying for services or benefits or government clearances at a wide range of agencies.
But a report by the audit office found that despite the Attorney-General's Department spending $17 million to establish the service and linking it to dozens of agencies, the system is not being used because of concerns over its accuracy and timeliness. The report said that since coming into operation in October 2007, the service had been used only 10 times a day on average to check documents presented at participating agencies. By contrast, the department had built the system to handle 250,000 requests a day.
The report said several major document-issuing agencies had not joined the service until well after it had started.
The Victorian births, deaths and marriages and driver's licence authorities had still not joined nor had the Western Australian driver's licence agency.
There were also technical glitches deterring agencies from using the system. Over its first two years in operation, the service had not identified a single fraudulent document and 38 per cent of its responses had been errors - including ''false negatives'' where the system reported that a document could not be verified even though the document was genuine.
''The delivery of timely and accurate responses … has been an ongoing issue for the national document verification service,'' the report says.
''Notwithstanding [testing of a prototype] and over two years of implementation, the project is still resolving practical implementation issues and is rarely used. It is unlikely in the immediate future that use of the national document verification service will significantly contribute to strengthening Australia's personal identification processes.''
The audit office recommended that the Attorney-General's Department should devise ways to fix the problems including ''considering the future of the national verification document service itself''.
The government established the service as part of a package of measures agreed to at a counter-terrorism summit between former prime minister John Howard and state premiers in 2005.
Wednesday, April 14, 2010
Thieves - Owner Corporation Certificate rip-off
I write as to a concern that I have in regard to the provision of Certificates issued by Body Corporate Management companies same being necessary for a proposed sale of a property covered by an operative Body Corporate.
I fully appreciate that the State Government effected statutory changes to the operation of Bodies Corporate primarily for the protection of the property owner.
Relatively recent changes were to some extent to ensure that Management companies had proper procedures in place and these alterations I do not have any problem with whatsoever.
My concern is as follows and I set out a particular circumstance that effects me personally.
I happen to retain ownership of a residential apartment at Docklands, Melbourne.
Due to the structure, the building is covered by three separate Bodies Corporate.
I am contemplating a sale of the subject property and when I contacted the Management Company I was provided with a varying range of fees for provision of Certificates depending on the timing of issue and the urgency of same.
The base fee for a 14 day certificate is set at $150-00.
In my case, I am charged for three certificates being a total of $450-00.
With respect, Mr Minister, the fees are an absolute disgrace given the levels associated.
The certificates are effectively a "single page document" (for each of the Bodies Corporate) and from a timing perspective, would take all of one minute to generate via a computer system.
I dont at any time have a problem with companies being remunerated for fair and reasonable work performed be it on a time basis or a service basis although having today checked with a number of other Body Corporate Management companies, the fees are fairly standard and the excuse given is that these were set by Government.
It is suggested that a more preferable method of Fee charging be adopted either being a "fair and reasonable" fee or possibly as a percentage of the annual Body Corporate fees paid in regard to the unit which would actually reflect the level of workload involved by the Management company.
By way of example, if one pays say $1000 pa for fees, may be a 5% fee be charged for the certificate being $50.
Signed by a pissed off client (name withheld)
Addressed to Tony Robinson MP
Date: 13 April 2010 9:18:23 PMSubject: Re: Bodies Corporate - Fees
Wednesday, March 17, 2010
ANZ insists third-party mortgage services are fully compliant
PERPETUAL'S mortgage services arm yesterday rejected claims that its operations do not comply with licensing rules.
It insisted legal work it performed on behalf of financial institutions was being done by qualified lawyers. The company's mortgage services subsidiary, Perpetual Mortgage Services, which provides mortgage processing and settlement services to some of the country's leading lenders, has come under scrutiny from property lawyers and conveyancers following a bungled outsourcing deal with ANZ. Perpetual spokesman Michael Woods yesterday defended the business against the attack from the Australian Institute of Conveyancers (AIC) and the Law Institute of Victoria. "Perpetual Mortgage Services Pty Ltd does not engage in legal practice," Mr Woods said in an emailed statement to BusinessDaily. Start of sidebar. Skip to end of sidebar. Related Coverage Perpetual under fire on ANZ deal Daily Telegraph, 2 days ago ANZ under fire over mortgage settlements Perth Now, 6 days ago Rush to withdraw slowing The Australian, 1 Dec 2009 ANZ reroutes mortgage processing The Australian, 8 Jul 2009 New pain for ANZ to top $300m Herald Sun, 8 Jul 2009 End of sidebar. Return to start of sidebar. "Perpetual provides mortgage processing services for customers. To the extent that these services involve legal work of any kind, it is carried out by . . . qualified Australian lawyers." Thousands of ANZ customers have suffered delays and additional costs on settling property sales since December when ANZ hired Perpetual to settle transactions involving the bank's customers. AIC president Pauline Barrow is concerned that a legal minefield is appearing as more banks outsource settlement and other mortgage functions to third parties such as Perpetual, arguing that they are not licensed to handle legal work on behalf of banks. Ms Barrow believes Perpetual's mortgage servicing arm needs to operate as a registered legal practice or conveyancing business to comply with state laws across Australia. If the AIC's concerns are valid, ANZ's relationship with Perpetual may have implications for its ability to comply with outsourcing standards set by the Australian Prudential Regulation Authority. ANZ spokesman Paul Edwards said the bank's "arrangement with Perpetual is fully compliant with APRA's outsourcing standards." Ms Barrow said conveyancers who were required to adhere to licensing rules were concerned about dealing with organisations that were not licensed. "We're having to deal with a third party when we should be dealing directly with the bank," she said. Mr Woods acknowledged that many ANZ customers had suffered as a result of problems with the new settlements systems since December. "Perpetual is aware that as a result of changes made by ANZ to centralise its mortgage processing, which included the engagement of Perpetual to provide mortgage processing services, some ANZ customers have experienced delay inconvenience," he stated in the email.
"ANZ has apologised for the difficulties. Perpetual is working with ANZ as part of the bank's program to improve its settlement performance and is confident these initial service issues are being quickly overcome."
Herald Sun
Lawyers line up ANZ
VICTORIAN property lawyers are demanding an urgent overhaul of ANZ's mortgage procedures following the bank's recent move to outsource home loan settlement functions to Perpetual.
In a damning letter sent to the bank last month, the Law Institute of Victoria's acting president Caroline Counsel highlights deficiencies in ANZ mortgage processes which she claims have "substantially undermined" the certainty of property sales.
The bank has since apologised to the LIV.
In the February 4 letter leaked to BusinessDaily, Ms Counsel states that ANZ and Perpetual have committed only limited resources to booking property settlements which has led to confusion and frustration for conveyancing lawyers and their clients.
"Law Institute of Victoria members have reported that there have been instances when the Perpetual representative has not attended settlement at the allocated time," Ms Counsel told ANZ in the letter.
"Settlement in such cases has, of course, not occurred at the allocated time, and this has necessitated the inconvenience of re-booking settlement."
ANZ outsourced settlement responsibilities to Perpetual Mortgage Services last year as part of a wider effort to bring its mortgage administration and settlement systems in line with industry standards.
However, the move has been disastrous with communication problems between the bank and Perpetual leading to delays for home buyers and sellers completing transactions.
The institute's list of complaints include:
SALE failures caused by Perpetual not meeting settlement deadlines.
"UNDULY long" waiting times for lawyers seeking information over the phone from the bank and Perpetual.
FAILURE by Perpetual to provide details of payments due by property buyers within 48 hours of agreed settlement dates.
Ms Counsel told the bank that Perpetual's inability to provide payout numbers before settlement days meant that settlements had to be postponed in many cases because there was not enough time for cheques to be drawn by purchasers.
"When settlements fail as a result of ANZ's processes, there are additional financial and emotional burdens imposed on parties," Ms Counsel told the bank in the letter.
"The LIV urges ANZ to address settlement process issues, as they substantially undermine the certainty of transactions for parties."
In a replying letter sent on February 24, ANZ's head of mortgages, Michael Bock, acknowledged that the deficient settlement procedures had caused inconvenience for solicitors and parties involved in property transactions.
"It is clear from feedback from the profession that the changes we introduced to our settlements process have caused frustration and, in certain circumstances, significant inconvenience for some solicitors, conveyancers and clients - and we sincerely apologise," Mr Bock told the LIV.
"We are working hard to fix these problems ... We understand your concerns, and ANZ is committed to making the necessary changes to ensure we meet your needs and clients' expectations for timely and efficient settlement of all purchases and discharges."
Mr Bock stated that ANZ had established a special team of senior executives to drive improvements to the group's mortgage processes.
The urgent change program will try to simplify settlement procedures by increasing phone contact staff and investment in new technology.
LIV chief executive Michael Brett-Young said conveyancing solicitors also experienced settlement issues with other banks but the problems were more profound at ANZ.
"We've had more complaints from our conveyancing solicitors about ANZ and we are confident that the other banks are meeting requirements to achieve timely and smooth settlements for clients," he said yesterday.
A Perpetual spokesman declined to comment on the LIV's concerns about its performance under the outsourcing deal with ANZ.
Tuesday, March 16, 2010
Perpetual flawed process impacts 3 banks
Three more banks could face investor concern over flawed mortgage outsourcing deals with Perpetual Ltd that give rise to confusion over who has the legal authority to complete the transactions.
An analyst says that Perpetual could lose as much as 10 per cent of its revenue if all three banks, National Australia Bank, AMP Bank Ltd and Bendigo and Adelaide Bank - in addition to ANZ Banking Group Ltd - drop their business with the fund manager over the flawed contracts.
Perpetual on Monday confirmed that National Australia Bank's (NAB) HomeSide mortgage lending unit, AMP Bank and Bendigo and Adelaide Bank outsourced the processing of mortgage applications to its mortgage services business.
Credit Suisse analyst Arjan Van Veen said in the unlikely event the banks broke their outsourcing contracts with Perpetual over the issue, Perpetual's total revenue would drop by 10 per cent.
Perpetual spokesman Michael Woods on Monday confirmed to AAP that HomeSide, AMP Bank and Bendigo and Adelaide had business relationships regarding mortgage services with each of the three lenders.
Mr Woods said Perpetual has been in talks with all four banks over claims made by the Australian Institute of Conveyancers (AIC) that Perpetual's staff are not legally qualified to act for banks for the purpose of completing mortgage settlements.
"To the limited extent, these services in terms of what we're providing to the ANZ that involve legal work of any kind, it is carried out by appropriately qualified Australian legal practitioners," he said in an interview on Monday.
Mr Woods was responding to concerns voiced by the AIC president Pauline Barrow that the outsourcing deals had caused confusion among property lawyers and conveyancers over whether banks or third-party administrators like Perpetual have legal authority to complete mortgage settlements.
"If they're acting for the ANZ then we need to know under what authority do they act," Ms Barrow told AAP.
"Is it an agency, or (do) they act under Power of Attorney? Where does the risk lie?
We don't know how that role is being performed."
"Whilst we're dealing directly with ANZ, then the risk remains with ANZ. But whilst we're dealing with a third party we have to question whether or not they have the ability to undertake the work they're doing because they're in a settlement process."
Ms Barrow said HomeSide, AMP Bank and Bendigo and Adelaide Bank had outsourced mortgage processing to Perpetual while other banks had outsourced the back office function to SAI Global's Espreon settlement services and brokerage unit.
"(They) have expanded the work they undertake to include legal work, (but) we're not sure whether or not they're working outside any acts or legislation."
Commonwealth Bank and Westpac Banking Corporation process mortgage settlements in-house, she said.
Ms Barrow said the banks involved in the dispute had not formerly consulted the AIC on the processing changes and were not following chain of title, which caused significant delays in mortgage settlements through faulty documentation.
NAB spokeswoman Gillian Griffiths declined to comment on the matter, while AMP Bank's Amanda Wallace confirmed it outsourced new mortgage preparation and settlements to Perpetual and was happy with its service.
"Like any outsourcing deal, we have service standards in place that we continually monitor and we're happy with the level of service Perpetual is delivering," she said.
"We're not seeing any issues."
Bendigo and Adelaide Bank and SAI Global did not respond to calls.
By Alison Bell
Friday, February 19, 2010
Orchestrating a harmonious system
Orchestrating a harmonious system
by MM Park, J Wallace, and IP Williamson
published Victorian Law Institute Journal, vol 83(5) pp 50-53 (May 2009)
ABSTRACT: the authors consider those changes to the Victorian Torrens system necessary or desirable to assist in bringing about an Australian harmonised (or even a uniform) system of land title registration.
Wednesday, February 17, 2010
NECS and Web Services
In this NECSpress we tell you more about work being done to define the requirements for system-to-system communications in NECS.
Industry stakeholders have made it clear that for NECS to be of value to them its functions must be accessible by Web Services from the outset. Web Services is the means by which NECS is integrated with the in-house case management and documentation systems used by conveyancing industry participants. It is an alternative to a person using a web browser to access NECS and it is expected that the majority of transactions completed using NECS will use Web Services.
NECS is an industry system that relies for its viability on being suitable for use by a wide range of independent users with different systems. Those systems include purpose-built systems and proprietary systems supplied and maintained by third parties, many of which are already using Web Services to communicate with other external systems.
Implementation of Web Services in an environment of many independent users and systems requires standardisation of both the content of messages exchanged between systems (Data Standard Requirements) and the means by which the messages are exchanged (Web Services Requirements). Without such standardisation NECS would have to be provisioned to service a large number of existing different Web Services implementations and message content interpretations which would significantly affect its viability and implementation time, and make it a very fragile system in operation.
Standardisation of the content and means of exchange of Web Services messages requires all parties to collaborate in developing standards that all parties can implement with the minimum amount of alteration, re-testing and re-commissioning of existing systems. This work cannot be done without extensive stakeholder involvement and input.
Data Standard Requirements
Standardisation of the content of messages is the purpose of the National Electronic Conveyancing Data Standard (NECDS) being developed with the Lending Industry XML Initiative Ltd (LIXI). Read about this work here.
A Working Group of LIXI members under the direction of a specially convened Management Group has developed draft requirements for the NECDS and most recently a single, controlled vocabulary for terms used in the NECS environment, including wherever possible their synonyms used in the various States and Territories. If you are a LIXI member you can access the requirements documentation here and the NECS Vocabulary here.
Late last year the National Office with the assistance of Ajilon Australia Pty Ltd reviewed the draft requirements and supplemented them with a Message Use Case Specification. The requirements documentation consists of separate Operations and Administration & Maintenance requirements for NECS/Land Registry and Industry/NECS transactions and the Message Use Case Specification covers all four requirement sets. All of these documents are available for review and feedback here.
These documents are drafts and are currently being reviewed by stakeholders. Following the review, it is expected that a first draft of the XML schema for NECS/Land Registry transactions will be commissioned.
Web Services Requirements
Standardisation of the means by which messages are exchanged between systems will allow NECS to communicate efficiently and reliably with the wide range of systems used by industry and government participants. Defining the most suitable requirements for Web Services in the NECS environment allows industry participants to get their systems ready for communicating with NECS. Read more about the reasons for this work here.
In February 2009, the National Office commissioned Saratoga Professional Services Pty Ltd to consult with industry participants and define the technical and commissioning requirements for Web Services connecting NECS to external systems. Saratoga undertook extensive stakeholder consultation and developed requirements set out in the report dated August 2009 available here.
In November 2009, the National Office commissioned Ajilon Australia Pty Ltd to extend and clarify the Web Services requirements necessary for the NECS environment. Ajilon’s report dated February 2010 is available here.
If you are interested in the definition of Web Services in environments characterised by a diverse range of independent users and systems and would like to comment on any of the work done to date, we would like to hear from you here.
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