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
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