Will SAI play hardball?

The finish line is getting closer with SAI Global announcing that it holds 49.38 per cent of voting power in Espreon, the business services company it has made an all-scrip offer for.

SAI will announce today either an extension of the offer or the status of their conditions, revealing whether they will use an alleged breach in their bid conditions to scupper the deal.

The breach was an ACCC investigation into the proposed acquisition started on January 14. Although it has been going on for over a month now, SAI only made note of the breach on Wednesday (see Hopes dashed by SAI, February 18).

If the breach is declared, SAI can either walk away or cancel a sweetener of offering one SAI share for every 4.4 Espreon shares.

However, SAI is unlikely to walk because based on the company's closing price yesterday the value of their scrip offer is less than the lower end of Espreon's 48.5 cents a share valuation, according to independent experts Lonergan Edwards & Associates.

It appears then, that SAI may enter hard-ball phase. Originally the company was seen as something of a white knight for Espreon, fighting off a hostile bid from former competitor Vectis, a private company owned by Melbourne businessmen Alan Schwartz and Jacob Weinmann. However, Espreon shareholders are now likely to rue the day they refused Vectis's original offer of 65 cents a share in June of last year.

SAI is being advised by Macquarie Capital and lawyers Gilbert + Tobin. Advising Espreon are TC Corporate and Baker & McKenzie on the legals. Vectis is being advised by Grant Samuel and Mallesons Stephen Jaques. 

Business Spectator

After announcing it had crossed the 50.1 per cent threshold in its takeover of business services provider Espreon, SAI Global has redeclared its offer as unconditional – allowing Espreon shareholders a great sigh of relief.

SAI said on February 18 that an ongoing ACCC merger investigation could constitute a breach of its terms (Hopes dashed by SAI, February 18), causing consternation once again for Espreon investors who have repeatedly seen their hopes for a positive shareholder exit dashed.

Since mid last year Espreon has knocked back a series of increasingly smaller offers. Former competitor Vectis initially offered Espreon shareholders 65 cents a share in cash in June. SAI is making an all-scrip offer of one SAI share for every 4.8 Espreon shares, effectively valuing the target at 48.96 cents per share. SAI's offer increases to one for 4.4 shares if it comes to own 90 per cent of Espreon.

The outcomes of the ACCC investigation, which begun on January 14, will be announced on February 25 and, hopefully for Espreon, will constitute the last major hurdle to the deal.

SAI is being advised by Macquarie Capital and lawyers Gilbert + Tobin. Advising Espreon are TC Corporate and Baker & McKenzie on the legals. Vectis is being advised by Grant Samuel and Mallesons Stephen Jaques. 

Espreon and SAI - an update

Espreon shareholders could be once again disappointed after its supposed white knight bidder SAI Global said that an ACCC investigation had breached one of its offer conditions, meaning that the offer of one SAI share for every 4.8 Espreon shares may not necessarily go unconditional. The alleged breach will also allow SAI to walk away if it chooses to do so. 

SAI had offered Espreon shareholders a sweetened deal of one SAI share for every 4.4 Espreon shares if at least 90 per cent of shares were acquired by February 27. Latest figures show that SAI holds 45.48 per cent of voting power. 

The competition watchdog's informal review of SAI's proposed acquisition was commenced on January 14 by merger investigators Jason Byrne and Brett Morris. The ACCC has set February 25 as the date it will announce its findings. 

This latest announcement comes as a disappointment after SAI's offer, which valued the target at 52 cents a share based on SAI's closing price of $2.50 on January 9, was welcomed by Espreon on January 13.

The SAI deal favourably compared with a rival offer from Melbourne-based private investment firm Vectis Group, which was offering 45 cents a share in cash.

Vectis, which used to compete with Espreon before selling parts of its business to SAI Global several years ago, first made an offer to Espreon in June of last year – plonking 65 cents a share on the table, or $62 million, before the market went south. 

In a signal that Vectis, led by prominent Melbourne businessmen Alan Schwartz and Jacob Weinmann, wanted to re-enter the sector, Stephen Cooper and Cam Stewart from Grant Samuel were hired to advise on a scheme of arrangement, as were Craig Semple and Nicola Charlston from Mallesons Stephen Jaques. 

Espreon responded by hiring Robert Fraser from TC Corporate, along with legal firm Baker & McKenzie to advise on its options. The Espreon team managed to subsequently force Vectis to raise its offer by an extra $5 million, or 5.5 cents per share, but then that offer was withdrawn, with negotiations returning to the original proposal of 65 cents a share. 

Yet it didn’t stop there. That number was reduced again to 62.2 cents a share in August and to 44 cents in October. By November negotiations were over and the parties agreed to disagree and go their separate ways. It was thought at the time that accounting software giant Reckon would put in an alternative bid. Vectis had, after all, planned to spin off a portion to Reckon had the deal gone ahead. 

However, the day of 'Reckoning' never arrived and Vectis subsequently went hostile, this time reducing its offer to 40 cents a share, increasing to 42 cents if it managed to get full control. Espreon dismissed it as inadequate, opportunistic, uncertain and highly conditional, and a “waste of time and money”. Espreon had, after all, already spent $1 million of cold hard cash on advisory and legal fees for the original scheme of arrangement proposal.

Major Espreon shareholders Hunter Hall (19 per cent) and LUT Investments (12 per cent) had also refused to agree to the deal. Institutional shareholders, including Dick Pratt’s Thorney Holdings control a combined 48 per cent of Espreon. 

Vectis’s offer was subsequently increased to 45 cents cash before SAI, advised by Macquarie Capital and lawyers Gilbert+Tobin, came onto the scene. The rest, as they say, is history.

But now, with SAI throwing this latest spanner in the works, what can history teach us? Don’t look a gift-horse in the mouth? Probably, but it’s not over yet. SAI are due to issue their notice of status of conditions this Friday. 

Business Spectator

Westpac strife lessens, but still annoys

The operational problems at Westpac’s home loan centre in Adelaide may be improving, but they are still creating headaches for the bank.

The bank has cut the expected delays of six weeks in processing home loan applications (for loan applications submitted through the typical mortgage brokers) to nine days.

One factor in the delays, according to advice from Westpac business managers to brokers earlier this month, is that “application numbers reached record highs” creating “an unprecedented pipeline in the system”.

Westpac’s more accommodating stance on lending policies is certainly driving this demand.

It is also leading to the occasional public relations flap.

The Herald Sun today reported that Westpac denied some customers the advertised fixed rate home loan of 4.99 per cent, an offer heavily promoted in December. The bank instead amended final contract documents to a higher rate of 5.49 per cent.

Westpac told the newspaper the bank erred in one case raised with the newspaper, but said its advertising was not misleading. The bank described this as an administrative error.

 

Source Finance News

Fraud and Electronic Settlements (NECS)

FRAUD IN CONVEYANCING

Fraud and Electronic Settlements (NECS)

As most conveyancers will be aware, Australia is heading towards a national electronic conveyancing system, referred to as the National Electronic Conveyancing System (NECS). The NECS is described as “Australia's joint government and industry initiative to create an efficient and convenient way of completing property based transactions and lodging land title dealings for registration”. The proposed NECS is therefore somewhat of a misnomer as it deals with the settlement and registration aspects of the conveyancing transaction rather than a model for electronic ‘conveyancing’ as a whole. For example, the proposed NECS does not cover preparation and exchange of contracts for sale, pre-settlement investigations, procurement of any insurances required by purchasers, such as title insurance, creation of loan documentation or processes for examining and registering instruments once lodged with a Land Registry.

 

Essentially, a conveyancer using the NECS will electronically:

• prepare dealings and related instruments to register changes in ownership and interests

• settle financial transactions (including payment of duties, taxes and any disbursements)

• lodge their dealings with the appropriate Land Registry

• receive confirmation of dealing lodgement and registration.

 

One question which is often raised is whether the proposed NECS will increase or decrease the scope for conveyancing and mortgage fraud. Certainly, the NECS model has not been designed to specifically deal with the allocation of fraud risk. For example, it is stated on the NECS website that “the NECS design is based on, as far as possible, maintaining the existing risk allocations and management philosophies in the paper-based conveyancing and settlement processes.”

Therefore the NECS model does not appear intended to specifically prevent the types of fraud which are currently occurring in the paper based system from occurring in the electronic based NECS on the basis of the re-allocation of risk.

Conveyancers will still be responsible for the registration of title documents as part of the conveyancing transaction and will be responsible for identifying their clients and acting in their best interests. Although it is difficult to draw any reliable conclusions given that the NECS is still in the development rather than implementation stage, a recent study based upon the current NECS model has concluded that the types of fraud currently occurring in the paper system, ie, forgery of signature and identity theft, fraud by solicitors and conveyancers, can continue to occur in the proposed NECS.

In relation to forgery of signature it is noted that whilst NECS certifiers will digitally sign mortgage and title instruments on behalf of their clients, NECS requires a client authorisation form to be completed and physically signed by the client, in which case, fraud may still be perpetrated by a fraudster who forges a signature on the authority and the witness does not follow the proper attestation or the attestation is also a forgery. In this respect the paper concluded that “the only difference between the paper system and the NECS is that in the paper system, the forgery is on the land title document, whereas in the NECS, it is on the authorisation form”.

 

Identity fraud can also continue to occur in the NECS and the onus will continue to be placed on the conveyancer as a subscriber to the NECS to properly identify the client. In this regard, the NECS will require conveyancers to provide certifications on electronic instruments prior to signing them on behalf of their clients. The conveyancer must certify that the “prescribed procedures” in verifying the identity of the client have been followed, and the conveyancer is holding a properly completed and signed authorisation form and has thoroughly and carefully examined and retained copies of all identification documentation.

 

The identity certification procedure is intended to give all participants in the NECS confidence that the practitioner has followed the prescribed procedures to verify the identity of the client and “may protect the practitioner from a negligence claim if the identity is subsequently proven to be false”.

 

Conveyancers should therefore be mindful that failing to follow the prescribed procedures will almost definitely result in a finding of negligence.

 

Although the precise nature of the prescribed identification documents is yet to be determined it is anticipated that there will be some move towards uniformity across the States and Territories and may result in a 100 point system similar to that under the Financial Transaction Reports Act 1988 (Cth) being adopted.

 

It is argued that the NECS may also introduce new opportunities for fraud within the conveyancing industry, namely, the unlawful use of a conveyancer’s digital signature certificate (as a certifier in the NECS) to digitally sign documents. That is, a fraudulent person with access to the NECS, such as a law clerk or other employee, would be able to prepare mortgage documentation, digitally sign the document on behalf a client and lodge it for registration.

 

 

Extract from a paper presented at the Australian Institute of Conveyancers 2007 National Conference, March 2007

By Paul Watkins

General Counsel, Australia

Stewart Title Limited

Mortgage frauds involving counterfeit Certificates of Title

Mortgage frauds involving counterfeit Certificates of Title

Division: Land and Property Information No: 2007/01

Date: January 2007

This circular is issued to advise all LPI customers that a mortgage fraud scheme involving counterfeit Certificates of Title is currently operating. Since late December 2006 at least nine counterfeit Certificates of Title have been identified by LPI. The counterfeits are being used as security to obtain substantial mortgages. All instances of the fraud scheme discovered to date share the following features:

• Loans are sought from non-bank financial organisations and are arranged by a mortgage broker;

• The loans are subject to high interest rates;

• The mortgagor may be unwilling or unable to personally attend settlement;

• Directions are received to pay the loan monies to a third party rather than to the mortgagor;

• An unencumbered Certificate of Title is offered as security for the loan;

• The Certificate of Title used as security is a computerised title dated prior to January 2004.

The counterfeit Certificates of Title used in the fraud scheme are produced by superimposing details from title searches of genuine titles on forged certificates in the format used prior to the introduction of certificates with enhanced security features in January 2004. The counterfeits are of reasonably high quality and are used in conjunction with forged identity documents purportedly proving that the fraudster is the registered proprietor of the land in the title.

Conveyancing practitioners who are approached by potential clients previously unknown to them in circumstances that match those set out above should act with extreme caution. Practitioners are strongly advised to seek confirmation from LPI of the authenticity of the Certificate of Title offered as security before proceeding to settlement.

The Law Society of NSW has recently communicated with its members warning them about the scheme. The following extract from the Law Society notification provides advice that all members of the conveyancing community should note:

“The Fraud Squad has warned of the extraordinary and widespread increase in identity fraud, where whole, well-documented identities are acquired by fraudsters. Forged passports, drivers’ licences, credit cards, letterheads etc are all available to fraudsters. It is not unusual for fraudsters to have an excellent working knowledge of conveyancing procedures, and to falsely sign documents as a solicitor, justice of the peace or otherwise……If a client has not been known to you personally for some time or the signature to be witnessed was not given in your presence, do not act as witness. Think carefully about the wisdom of acting on behalf of a mortgagor whom you have never personally met or with whose directors you are not personally acquainted….The Law Society recommends that in addition to obtaining a clear copy of all documents used in the identification process, practitioners ensure that at least one such document displays both a good quality photo and the signature of the person so identified.”

 Des Mooney Deputy Director General, Department of Lands and General Manager, Land and Property Information

Mortgage Fraud White Paper

Mortgage fraud is a growing phenomenon with a signifi cant and direct impact on every party to the mortgage relationship, including brokers, managers, lenders or securitisers, insurers and consumers. The Mortgage & Finance Association of Australia (MFAA) engage PricewaterhouseCoopers (PwC) to produce a joint white paper on methods to reduce fraud risks in the mortgage loan application process. This paper represents the MFAA taking a leading role to promote discussion about mortgage fraud and strategies to address fraud risk.

The results of the study undertaken by PwC are set out in the following pages. In preparing the white paper, PwC reviewed the current state of fraud in the mortgage industry in Australia and in comparable markets overseas, and conducted indepth consultation with representatives from:

• Banks

• Securitisers

• Mortgage Managers

• Mortgage Aggregators

• Mortgage Brokers

• Lenders Mortgage Insurers

• Professional Indemnity Insurance Brokers, and

• Title Insurers.

The objective of the white paper is to assist members in reducing the risk of mortgage fraud, through awareness of the risks and providing a description of procedures that mitigate these risks.

Electronic Processing 

As with many forms of financial transactions, the future of the loan application process may evolve to include a range of electronic and/or automated aspects. Electronic processing and other technological innovations may improve processing efficiency, however, these changes carry the potential to expose particular aspects of the loan application process to an increased risk of fraud. 

All of these factors will influence consumer confi dence in and response to the mortgage loan application process. A consistent and co-operative approach to the constantly evolving risk of fraud and non-compliance will assist the mortgage industry as a whole in preparing for and managing the potential dangers and, crucially, may assist in sustaining consumer confidence in the process.

Title Insurance 

An increasing number of securitisers and lenders are taking out title insurance to manage risk particularly mortgage fraud. A title insurer will typically put measures in place to mitigate fraud. These include simple procedures for mortgage processors to follow to help detect fraud before the loan funds are drawn down, and working with originators to highlight areas where there is a greater risk of a fraud occurring.

MFAA PwC White Paper

NAB drops Satyam from IT roster

Article from: The Australian

NAB today decided to cancel the second phase of a massive outsourcing project contracted to Satyam Computer Services of India.

National Australia Bank’s technology services general manager, Craig Bright, said the bank would be exposed to too much risk if it continued with the second wave of its IT outsourcing (ITO) strategy, which was given the green light last November.

NAB announced the decision to cancel the Satyam contract at Melbourne’s Telstra Dome today, sources said, conducting separate briefings for its staff and the contracted employees of India’s beleaguered IT services firm.

National Australia Bank would not comment at time of publication.

The termination of the ITO Wave 2 is likely to see working visas revoked for the 100 Satyam staff.

The bank already retrenched about 50 employees, primarily contractors, as part of the early stages of ITO Wave 2, and had previously scheduled another round of redundancies in March.

The bank said it would not sever the ITO Wave 1 outsourcing arrangement with Satyam, which is offering support and maintenance of key technology functions. 

However, it is understood that NAB executives were considering how to stop dealing with Satyam altogether, to either bring the technology functions back in-house, or outsource them to another firm.

While it would take between three to five months to bring the components back onshore, NAB will need to find the internal resources to support the work as it has already retrenched and made redundant hundreds of permanent and contractor staff that were responsible for the functions.

The second tranche of technology outsourcing includes the management of Siebel, payments and account services applications.

The Australian recently reported that NAB encountered a number of problems transitioning technology functions to Satyam in the early stages of the outsourcing program’s life.

At the meeting today, the bank did not outline back-up proposals following the decision to drop Satyam. NAB chief information officer Michelle Tredenick has previously told staff the bank had several contingency plans to deal with situation.

NAB’s ITO strategy - spearheaded by Ms Tredenick - is part of the bank’s upgrade of its technology systems and processes, which also includes spending $1 billion over five years to replace its core banking systems.

Satyam’s chairman and founder B. Ramalinga Raju and other senior executives were arrested after Mr Raju admitted inflating the company’s books by more than $US1 billion ($1.55 billion). Two partners from the company's auditing firm, PricewaterhouseCoopers, have also been arrested.

E Conveyancing - yet another stuffed up project

I’ve been aware of this one for a while, but was reminded by the comment below.

The idea is quite simply, to have one electronic system to do property conveyancing, eliminating all that faxing around of fiddly bits of paper etc.

It isn’t that big a project (speaking with my ex IT Manager hat on) as there are only about 400 000 transactions a year across Victoria, so you don’t need a really wiz bang system to handle that type of volume, and the database wouldn’t be that big either.

Of course, that’s not how the Government is doing it, spending $30M - $40M with no usable system in sight.

This commentary was published on the VicWatch blog

Rent data unfit to publish

Dewi Cooke | the age

January 31, 2009

OFFICIAL government figures on the state of Victoria's rental market have been missing since May and, when they finally are released, are likely to be nine months out of date.

Substandard data collection has been blamed for the long delay in the Office of Housing's quarterly rental report, which last published figures from March.

The Residential Tenancies Bond Authority, a government agency under the auspices of Consumer Affairs Victoria, is responsible for collecting the information and outsourced the task to an Indian-based company, iGate, which has offices in Ballarat.

The data was then passed on to the Office of Housing for analysis but was said to be unusable.

"I was not prepared to publish data that we could not stand by," Housing Minister Richard Wynne said.

The information in the Rental Report is considered a truer indication of the state of the market because the authority records all official rental agreements lodged in the state.

Figures provided by the real estate industry rely on publicly advertised rent or rents reported by agents.

Reports of Melbourne's rental vacancy rate have swung from a tight 1.2 per cent to a healthier 3.9 per cent.

The Office of Housing's December quarter figures are now expected to be published on time in March, while the figures from June and September 2008 will be rolled into one report.

But Opposition Housing spokeswoman Wendy Lovell questioned the delay and said Victorians had been left in the dark about the market.

"You've got to wonder what they are trying to hide." she said.

The Tenants Union of Victoria's Toby Archer said accurate and up-to-date information was "crucial" as the state's rental crisis continued.

A spokeswoman for Consumer Affairs Victoria said data collection for the report had always been outsourced but iGate had been contracted only since July.

"As sometimes happens when moving to a new processing system, a number of teething problems occurred," she said. "These issues have since been resolved."

Grim outlook for real estate jobs

Eli Greenblat | The Age

January 31, 2009

VICTORIA'S real estate industry could start hemorrhaging jobs this year, with a 25 per cent slump in transactions during 2008 forcing suburban offices to cut back.

Real Estate Institute of Victoria chief executive Enzo Raimondo said his recent discussions with members confirmed that the industry was set for a contraction.

"When you have 25 per cent less transactions, you can't have the same number of people dealing with them."

Mr Raimondo said the REIV's corporate membership had remained static at 1900 agencies, but he expected a reduction in the number of individual members.

He said individual REIV memberships had fallen to 6200 from 6500.

"A number of agencies have put off quite a few staff," Mr Raimondo said.

It comes as the REIV's latest report on property prices shows that the Melbourne metropolitan median price for a home fell 0.9 per cent in the December quarter to $426,000. The median price for an apartment eased 1.1 per cent to $365,000.

Annually, the Melbourne property market fell sharply, in line with most asset classes in the grip of the economic crisis, with the median value down 9.7 per cent in 2008.

Wakelin Property Advisory director Monique Wakelin said the bulk of the property sales in the December quarter were in the more affordable suburbs thanks to the recent increase in the first-home buyer's grant.

At the upper end of the property scale, in the leafy expensive suburbs of Melbourne, activity was marked by sellers driven to desperation by depreciating shares and other assets.

"They are not so much dumping their homes, but what they are having to do is sell because they have used a whole heap of equity in their home to gear into the stockmarket.

"It's all the usual high-end suburbs … such as Brighton, Toorak, Kew and Malvern," he said.

Renters face tax hit

Mark Hawthorne | The Age

January 31, 2009

VICTORIAN home renters and small business owners could face hefty stamp duty bills under an amendment to the Duties Act being debated in State Parliament this week.

Proposed amendments to the bill will make some tenants liable for stamp duty if the property they are renting is sold during during their lease.

The stamp duty rate is 5.5 per cent of a property's value, and the changes could lead to stamp duty bills totalling tens of thousands of dollars for renters and business owners.

For example, a person renting a $400,000 flat could be liable for a stamp duty payment of $22,000, and have just 14 days to settle that debt, if the property is sold.

The Duties Amendment Bill 2008 was tabled in Parliament in December following pressure from the State Revenue Office to close loopholes governing the transfer of properties, particularly those owned on 99-year leases, to avoid stamp duty.

Critics have described the changes as a "stealth tax" and say thousands of Victorians will have to pay stamp duty on properties they do not own.

The changes mean:

■The effective reintroduction of lease duties in Victoria, which the State Government abolished in 2001.

■Tenants who pay any consideration other than just rent — for example, hiring a gardener or removing signs from a shop or warehouse — will have to pay stamp duty if the property is sold.

■Property buyers may have to pay double stamp duty — once when contracts are signed, and again on the completion of sale.

■Retirement villages will no longer be exempt, adding tens of thousands of dollars to the cost of buying into a village.

■Stamp duty will have to be paid within 14 days of a contract of sale being signed, rather than within three months of the transaction being completed.

A spokesperson for Treasurer John Lenders said: "Our objective is clear — to close a loophole that allowed people to circumvent tax by deliberately structuring their affairs to take advantage of the abolition of stamp duty on leases.

"The SRO has monitored changes in market practice since the abolition of lease duty and observed that there has been a rise in certain types of leasing arrangements that have exploited the loophole.

"Typically these arrangements are used at the top end of the property market. This legislation will not affect those entering into ordinary commercial leases.

"If it is shown that the bill will have unexpected consequences that are not able to be overcome administratively, then we will consider appropriate amendments to the bill when it is debated in Parliament next month."

Global accounting firm PricewaterhouseCoopers has been among the most vocal of the legislation's critics.

"The legislation was designed to address a particular case that the State Revenue Office lost in the Supreme Court," said Barry Diamond, a partner with PwC.

"In trying to introduce amendments that would close loopholes, there are other consequences that are simply absurd.

"The key message that PwC, along with other key stakeholders, would like get across is that we want the State Government to either withdraw or substantially amend the changes immediately.

"There are a number of consequences of this bill — it introduces a stealth tax, and creates some absurd consequences for people renting a property whereby they could get a stamp duty bill for tens of thousands of dollars."

According to Mr Diamond, the changes will affect those who have a "provision in their lease other than rent".

"This is much more common for commercial leases, where the tennant will have provisions to remove signage from a shop or warehouse.

"If those provisions are in the lease, to pay any consideration other than rent, then they will be liable for stamp duty."

Since the bill was tabled in December, the Government has received complaints from the Law Institute of Victoria, the Property Council, the Tax Institute of Australia and the Australian Bankers Association.

"The real question is: was this the intention of the Government, are they really introducing a tax by stealth?

"Or have they just got it wrong and caught a lot more things in their amendments, like certain long-term leases?" Mr Diamond asked.

Shared Workspaces

Communication & Co-operation

Communicating with others using various aspects of the World Wide Web has become commonplace. Most of us use e-mail daily, many are members of specialty-group forums, and more and more of us are making and finding friends on web portals such as Facebook and My Space.

Legal and conveyancing professionals have probably not been the quickest to adopt many aspects of the digital world. I recall a story (supposedly true) from my first law firm. The previous decade the managing partner purchased a personal computer for word processing. It was probably among the first in town - he was a very astute man who saw massive potential to this new technology. His assistant promptly resigned stating “I am not going to waste time with some new fad that will be gone in a year”. While this is one exaggerated perspective, as a profession we do tend to regard technology with some resistance.

Property work has at its core a co-operative need between practitioners and lenders, and we achieve that today already using technology. The telephone, facsimile and e-mail now all play a part alongside “snail-mail” as facets of the communication technologies used by us to achieve the result for the client, who is relying on us and her or his lender for the desired result.

Unification

The internet provides the ideal platform for the unification of these separate communication systems. A purpose-designed web platform can create an environment where lenders and conveyancers can communicate in a standardised way, each seeing and receiving what it needs to progress their work.

Instead of a dozen major lenders with a dozen different ways of attempting to obtain their (in essence) identical requirements, a unified web based portal can allow communication that not only saves expenses such as postage, facsimile and telephone - the staff hours able to be saved are immense.

Shared Workspaces

The concept of Shared Workspaces is simple – design a system where the conveyancer can upload documents like contracts and transfers, and the lender can print (or save to its electronic file) those documents instead of writing to the practitioner, or telephoning and then the practitioner mailing or faxing etc. Simply put, it is a web page that is accessible by the conveyancer and lender for that transaction. That web page becomes their “Shared Workspace”.

A method of creating the Shared Workspace is needed, and this should be one where either the lender or the conveyancer can create it, and the system will know when another party is trying to join, and invite them in if appropriate. Couple this to a method of creating (or identifying already open) Shared Workspaces via a single process, and we have the makings of the first real 21st Century advance in the property settlement arena.

Shared Workspaces can combine all of a practitioners matters into a single page, and allow any filewith any lender to be actioned. While Shared Workspaces will allow many things to be achieved, the “killer application” is perhaps the readily identifiable status of a file: A conveyancer can see at a glance whether the lender has joined the Shared Workspace, and when the lender is ready to be booked. Consider the time spent on hold waiting to book a loan advance, only to find out that it is not ready to be booked. Not only has the practitioner lost valuable time, but the lender has wasted their time in taking those calls, and that time would be better spent getting those files ready in the first place! If in future the practitioner could see at a glance that the matter is or is not ready to book, then booking arrangements can only benefit.

With industry support gathering pace, this future is closer than you think.

Contributor Nick Spanninga 2009

 

Drop in home loans raises fears of higher rents

And there are fears that a drop in investment loans could lead to skyrocketing rents and more homelessness.

Just 5994 new loans were approved in WA in November, the lowest since he same month in 2002 and almost 40 per cent fewer than in May 2006, according to Australian Bureau of Statistics data. It was a fall of 5.8 per cent on October.

The raw data shows just under 5000 were for buying established houses. There were also 2104 refinancings, which are not included in the overall totals.

About $171 million in loans were for building new homes and a further $57 million were for building them. About $1.3 billion was loaned to buy established houses.

Loans for investment housing, which were not broken down by state, fell 7.4 per cent on the previous month and 33 per cent on November 2007.

Housing Industry Association executive Chris Lamont said the investment numbers were of "real concern".

"Unless new measures are implemented... we are going to see more households struggling to afford rental accommodation," he said.

"This is likely to mean an increase in demand for public housing and potentially a further increase in homelessness."

He called for a doubling of the depreciation allowance, incentives for building energy-efficient homes and an expanded national rental affordability scheme.

Meanwhile, the Urban Development Institute of Australia has backed the Housing Industry Association's analysis of other recent housing data by pointing to an expected improvement in new home sales to first home buyers with the tripling of a grant.

HIA WA executive director John Dastlik told WAtoday.com.au last week that there would be a lag between the introduction of the $21,000 grant and its flow-through effect on home sales due to the approvals process in WA.

He was commenting on figures showing new home approvals in the state slumped to an eight-year low in November.

Figures released by the federal government at the weekend showed there had been 279 applications for the grant in WA since October 18, the date it was increased.

But UDIA WA chief executive Debra Goostrey said this was misleading as in WA there needed to be a contract to build before prospective homeowners could apply for the grant, unlike the eastern states where house and land packages from the same company triggered an application much sooner.

UDIA figures showed a "major jump" in land sales from when the grant was announced. The top 12 developers in the state sold 678 lots in the six weeks from October 27, almost 300 more than in the corresponding period before that date.

Author: Chalpat Sonti
Date: January 15, 2009
Publication:  The Age

NAB faces IT losses after Indian fraud

NATIONAL Australia Bank could be forced to write off millions of dollars invested in its offshoring program as a result of the Satyam corporate fraud scandal.

NAB is one of Satyam's biggest customers in Australia and has already made a significant investment on training and transition costs and redundancy payouts as part of its information technology offshoring (ITO) program.

Satyam founder B. Ramalinga Raju last week admitted exaggerating profitability and assets.

Insiders said the bank would face hefty losses if it brought the work back onshore.

"This initial investment was meant to be repaid over the next five years with lower maintenance costs," one source told The Australian. "If NAB breaks out of the ITO wave 1 contract now, there will be large losses of that initial investment which can never be recouped."

Around 90 Satyam staff service NAB, with about 40 per cent based in Australia.

The bank has offshored key technology functions to Satyam, exposing it to significant risk if this service were interrupted.

"It has literally 'bet the bank' with entrusting its key applications to Satyam," a source said.

"Without these applications being successfully supported and maintained, the NAB could not continue to operate."

The Australian understands it will take at least a year for NAB to transfer the work in-house and that the relevant expertise doesn't exist within the bank to service this.

"Most of the staff displaced by ITO wave 1 have been given redundancy packages and long left the NAB" the source said.

"It would take at least 12 months and considerable expense to bring ITO wave 1 applications back in-house."

The bank has a number of contingency plans, spokeswoman Kerrina Lawrence said, and has a core group of internal and external staff capable of performing the work if required.

"NAB's priority is ... seamless service. All business-critical support is performed by NAB's Australian team members."

Qantas is monitoring its relationship with Satyam, as it has more than $US135 million of contracts with Satyam, according to analyst firm IDC.

Mahesh Sharma | January 21, 2009

Article from: The Australian