Stage 1 update
Stage 1 pilot is in full swing with all financial institutions who signed up to the EC Pilot having formally subscribed and using the system to process transactions.
At the start of April, Stage 1 will have been in production for over seven months. There have been 354 discharges of mortgage created and 346 of these transactions have been processed through to the Victorian Land Registry.
Release 1.2 was deployed on 14 May 2007 and allows subscribers to create new mortgages through EC.
Stage 2 preparations
Planning and preparation for the next phase of the Victorian Electronic Conveyancing pilot is continuing. Stage 2 will include financial settlement via the Financial Settlement Manager including the calculation and payment of duty to the State Revenue Office.
Rick Dixon (EC Project Manager) and Victorina Pena (EC Implementation Manager)recently visited solicitors and conveyancers in Geelong and Traralgon involved in the Stage 2 pilot. Participants are enthusiastic and looking forward to trialling the system in their geographic regions.
To prepare for Stage 2, a combined meeting between the Financial Institutions Operations Group (FIOG) and the Solicitors and Conveyancers Advisory Forum (SCAF) was held on the 18 April 2007. A demonstration of the stage 2 system was provided to the group. The meeting allowed participants to discuss common and interrelated
approaches and issues.
THe proposed start date is 16 November 2007
Source EC Express
Wednesday, May 30, 2007
Monday, May 28, 2007
Permit debacle may leave owners high and dry
THOUSANDS of building permits issued in Victoria over the past five years are believed to be invalid.
The revelation raises fears that many properties could be illegally occupied, not covered by insurance, and in some cases unlawfully bought or sold.
Industry sources say the discovery — which is expected to cost the Building Commission millions to rectify — is being covered up, with the commission playing down the debacle as a "paperwork issue".
The Age has been told that permits issued for new homes, renovations, sheds, swimming pools and spas in up to 60 local government areas are believed to be invalid, possibly affecting more than 3000 property owners. In some cases, the permits have never been finalised.
Building permits for public housing properties may also be in doubt, sources claim.
The Building Commission announced last week that it had suspended a building inspector for unprofessional conduct, following "an investigation into the alleged issuing of irregular building permits".
A statement claimed his suspension related to 785 permits issued by a now defunct Cranbourne company, Casey Building Services, between September 2005 and August 2006. But sources have told The Age that this was a conservative estimate. The commission alleges that during the 11-month period a building inspector, Geoffrey "John" Chambers, signed-off on several occupancy permits (also known as final certificates) without authorisation.
The permits are required to show that the building works have been completed in accordance with the stamped plans and Australian standards.
They can be signed only by the relevant building surveyor appointed at the project's outset.
But when Casey Building Services' surveyor ceased working at the company after a stroke on September 4, 2005, Mr Chambers is alleged to have signed the documents on his behalf. A local government planning officer raised the alarm after seeing an unfamiliar signature above the surveyor's name.
The commission's investigation into Mr Chambers has also revealed that final permits for many jobs have never been completed.
After his suspension, doubts have been raised within the industry about whether any of the jobs that Mr Chambers approved were ever inspected at all. One source said the debacle was likely to have huge ramifications for the building industry, because without the appropriate paperwork, the properties should not be occupied.
One surveyor, who did not want to be named, expressed concerns that some of the affected properties might have also been illegally sold, considering invalid permits formed part of the section 32. He said this also meant properties might not be covered by insurance if, for instance, the structures fell down.
Mr Chambers was charged by the Building Commission in 2003 for operating a company that provided surveyor services without having a surveyor as a director.
He appointed a surveyor as a director and the matter was dropped.
He was this week served with documents to appear before the Building Practitioner's Board on June 4 for a preliminary hearing. He declined to comment on the allegations.
Building Commissioner Tony Arnel last week assured those involved that they would not be disadvantaged by the mess.
He said the commission would provide householders and builders with free advice, inspections and reports and would meet the costs of issuing new building permits if they were needed. He said the irregularities related to "paperwork issues", and there was no reason to believe that the actual building work was substandard or dangerous.
A commission spokeswoman has since said builders and householders who had dealt with Mr Chambers in good faith were assured the discrepancies would not affect the use of their properties or insurance. A Building Commission hotline has been set up for anyone seeking more information. Phone 1300 360 320
The Age
28 May 2007
Andrea Petrie
The revelation raises fears that many properties could be illegally occupied, not covered by insurance, and in some cases unlawfully bought or sold.
Industry sources say the discovery — which is expected to cost the Building Commission millions to rectify — is being covered up, with the commission playing down the debacle as a "paperwork issue".
The Age has been told that permits issued for new homes, renovations, sheds, swimming pools and spas in up to 60 local government areas are believed to be invalid, possibly affecting more than 3000 property owners. In some cases, the permits have never been finalised.
Building permits for public housing properties may also be in doubt, sources claim.
The Building Commission announced last week that it had suspended a building inspector for unprofessional conduct, following "an investigation into the alleged issuing of irregular building permits".
A statement claimed his suspension related to 785 permits issued by a now defunct Cranbourne company, Casey Building Services, between September 2005 and August 2006. But sources have told The Age that this was a conservative estimate. The commission alleges that during the 11-month period a building inspector, Geoffrey "John" Chambers, signed-off on several occupancy permits (also known as final certificates) without authorisation.
The permits are required to show that the building works have been completed in accordance with the stamped plans and Australian standards.
They can be signed only by the relevant building surveyor appointed at the project's outset.
But when Casey Building Services' surveyor ceased working at the company after a stroke on September 4, 2005, Mr Chambers is alleged to have signed the documents on his behalf. A local government planning officer raised the alarm after seeing an unfamiliar signature above the surveyor's name.
The commission's investigation into Mr Chambers has also revealed that final permits for many jobs have never been completed.
After his suspension, doubts have been raised within the industry about whether any of the jobs that Mr Chambers approved were ever inspected at all. One source said the debacle was likely to have huge ramifications for the building industry, because without the appropriate paperwork, the properties should not be occupied.
One surveyor, who did not want to be named, expressed concerns that some of the affected properties might have also been illegally sold, considering invalid permits formed part of the section 32. He said this also meant properties might not be covered by insurance if, for instance, the structures fell down.
Mr Chambers was charged by the Building Commission in 2003 for operating a company that provided surveyor services without having a surveyor as a director.
He appointed a surveyor as a director and the matter was dropped.
He was this week served with documents to appear before the Building Practitioner's Board on June 4 for a preliminary hearing. He declined to comment on the allegations.
Building Commissioner Tony Arnel last week assured those involved that they would not be disadvantaged by the mess.
He said the commission would provide householders and builders with free advice, inspections and reports and would meet the costs of issuing new building permits if they were needed. He said the irregularities related to "paperwork issues", and there was no reason to believe that the actual building work was substandard or dangerous.
A commission spokeswoman has since said builders and householders who had dealt with Mr Chambers in good faith were assured the discrepancies would not affect the use of their properties or insurance. A Building Commission hotline has been set up for anyone seeking more information. Phone 1300 360 320
The Age
28 May 2007
Andrea Petrie
Saturday, May 26, 2007
92% of consumers use real estate websites to look for property
Shaun Di Gregorio, General Manager–Australia & New Zealand of realestate.com.au offers tips to marketing your property online.
The growth of Perth house prices maybe showing signs of slowing but the number of properties for sale is definitely not. The West Australian market is rich with listings and this can make it tough for sellers to stand out amongst a crowded market.
Standing out from the pack is key when trying to sell property in a competitive market. Choosing an agent who advertises on the Internet is the best starting point. According to Nielsen//NetRatings’ The Australian Property Search Report’ 92% of consumers use real estate websites to look for property and cited them as ‘the most useful resource’.
But remember, not all internet advertising is the same. Make sure your agent advertises on one or more of the most popular sites to maximise exposure. This means a site that reaches local, state, national and international audiences.
Once the property is listed online, encourage your agent to include as much information about the property as possible.
Our research indicates that buyers like to see:
Be honest about the price you are seeking. In a recent survey by realestate.com.au, 92 per cent of people said they would be unlikely to enquire about a property with no price indication. Price on application (P.O.A) is a confusing term that either shows the property is too highly priced, or there is something to hide. Similarly, avoid using broad price ranges like $400-$550,000.
As simple as it sounds, ensure that the complete address is detailed. This is really important for potential interstate and international buyers so they can assess the location’s suitability. It also gives local buyers an opportunity to drive past the property and rule it in or out of the shortlist.
Remember, internet users are information hungry.
Your agent can also take some extra steps to give your property a higher profile. For example, if your agent advertises on realestate.com.au, ask if your home can become a “featured property.” This is an inexpensive option that highlights your property graphically and ensures you receive three to four times the property views.
Database marketing is another good option for ensuring everyone sees your property. Seek out agents that send e-brochures and eAlerts to property seekers who have registered to receive information on news listings. This approach will help target potential buyers who have expressed an interest in a property like yours.
While driving bulk visitors to online listings sounds impressive, it's the quality of these leads that counts. As a vendor, you want to know where the enquiries are coming from. Are most of your enquiries coming from the Internet? Are they coming from the Sale board? Speak to your agent about how you can maximise your on going advertising and the response rate. More importantly, are you spending your advertising dollars where the most enquiries are coming from?
These basic tips are cost effective and really work.
Source realestate.com.au
The growth of Perth house prices maybe showing signs of slowing but the number of properties for sale is definitely not. The West Australian market is rich with listings and this can make it tough for sellers to stand out amongst a crowded market.
Standing out from the pack is key when trying to sell property in a competitive market. Choosing an agent who advertises on the Internet is the best starting point. According to Nielsen//NetRatings’ The Australian Property Search Report’ 92% of consumers use real estate websites to look for property and cited them as ‘the most useful resource’.
But remember, not all internet advertising is the same. Make sure your agent advertises on one or more of the most popular sites to maximise exposure. This means a site that reaches local, state, national and international audiences.
Once the property is listed online, encourage your agent to include as much information about the property as possible.
Our research indicates that buyers like to see:
- detailed descriptions
- as many high quality photos as possible
- accurate floor plans and
- virtual tours
Be honest about the price you are seeking. In a recent survey by realestate.com.au, 92 per cent of people said they would be unlikely to enquire about a property with no price indication. Price on application (P.O.A) is a confusing term that either shows the property is too highly priced, or there is something to hide. Similarly, avoid using broad price ranges like $400-$550,000.
As simple as it sounds, ensure that the complete address is detailed. This is really important for potential interstate and international buyers so they can assess the location’s suitability. It also gives local buyers an opportunity to drive past the property and rule it in or out of the shortlist.
Remember, internet users are information hungry.
Your agent can also take some extra steps to give your property a higher profile. For example, if your agent advertises on realestate.com.au, ask if your home can become a “featured property.” This is an inexpensive option that highlights your property graphically and ensures you receive three to four times the property views.
Database marketing is another good option for ensuring everyone sees your property. Seek out agents that send e-brochures and eAlerts to property seekers who have registered to receive information on news listings. This approach will help target potential buyers who have expressed an interest in a property like yours.
While driving bulk visitors to online listings sounds impressive, it's the quality of these leads that counts. As a vendor, you want to know where the enquiries are coming from. Are most of your enquiries coming from the Internet? Are they coming from the Sale board? Speak to your agent about how you can maximise your on going advertising and the response rate. More importantly, are you spending your advertising dollars where the most enquiries are coming from?
These basic tips are cost effective and really work.
Source realestate.com.au
Question to the House on Electronic Conveyancing
Question Without Notice in the Victorian Legislative Council to the Minister for Planning concerning electronic conveyancing.
24 May 2007 COUNCIL
Mr TEE (Eastern Metropolitan) -- My question is to the Minister for Planning. Can the minister advise the house how the $6 million in funding for electronic conveyancing will position Victoria as a leader in streamlined property transactions, reduce the regulatory burden for business and the community and minimise costs to business?
Hon. J. M. MADDEN (Minister for Planning) -- I thank Mr Tee for his question because I know he has a specific interest in this area. No doubt people in this chamber would appreciate that the budget provided a huge $1.5 billion commitment to maintaining Victoria's competitive business environment. Not only has land tax been slashed but WorkCover premiums have been cut by 10 per cent, providing immediate and obvious benefits for investment in Victoria.
I am delighted to advise the house that this budget provides $6 million to complete the development of and to switch on our new electronic conveyancing system to support faster, more efficient property settlements. Cutting red tape is imperative for business and the community and is a hallmark of this government. Cutting business costs is an integral part of supporting economic growth.
We appreciate that the small business statement released by the Bracks government in August 2006 commits to the reduction of red tape by 25 per cent over the next five years. This government has consistently stripped away layers of unnecessary and time-wasting processes to allow Victorian businesses to remain competitive.
The introduction of electronic conveyancing for property transactions is part of our very clear intention to cut red tape in business.
It puts Victoria at the forefront of the Australian states and indeed makes it a world leader in financial property settlement and lodgement of land transfers and mortgages.
Financial institutions like Westpac, ANZ, Commonwealth Bank, National Australia Bank, Macquarie Bank and Bendigo Bank are already using mortgage transactions as part of the electronic conveyancing system.
Even greater benefits will emerge in stage 2, and that will do away with the paper shuffle that often goes on with these transactions where a number of parties have to come together and shuffle papers in order to settle a transaction. This will mean a saving on average of up to $395 per four-party settlement on an average saving of up to $108 for each vendor and purchaser.
That might not seem a lot on each transaction, President, but let me reinforce that more than $70 million of annual savings for the industry and community are forecast from this initiative. The Bracks government recognises the challenges of the future, and we are delivering on our promises to reduce cost to business and invest in services that matter to Victorian businesses -- and all that will flow on to jobs and make Victoria a great place not only to do business but to live, work and raise a family.
Extract from Hansard
24 May 2007 COUNCIL
Mr TEE (Eastern Metropolitan) -- My question is to the Minister for Planning. Can the minister advise the house how the $6 million in funding for electronic conveyancing will position Victoria as a leader in streamlined property transactions, reduce the regulatory burden for business and the community and minimise costs to business?
Hon. J. M. MADDEN (Minister for Planning) -- I thank Mr Tee for his question because I know he has a specific interest in this area. No doubt people in this chamber would appreciate that the budget provided a huge $1.5 billion commitment to maintaining Victoria's competitive business environment. Not only has land tax been slashed but WorkCover premiums have been cut by 10 per cent, providing immediate and obvious benefits for investment in Victoria.
I am delighted to advise the house that this budget provides $6 million to complete the development of and to switch on our new electronic conveyancing system to support faster, more efficient property settlements. Cutting red tape is imperative for business and the community and is a hallmark of this government. Cutting business costs is an integral part of supporting economic growth.
We appreciate that the small business statement released by the Bracks government in August 2006 commits to the reduction of red tape by 25 per cent over the next five years. This government has consistently stripped away layers of unnecessary and time-wasting processes to allow Victorian businesses to remain competitive.
The introduction of electronic conveyancing for property transactions is part of our very clear intention to cut red tape in business.
It puts Victoria at the forefront of the Australian states and indeed makes it a world leader in financial property settlement and lodgement of land transfers and mortgages.
Financial institutions like Westpac, ANZ, Commonwealth Bank, National Australia Bank, Macquarie Bank and Bendigo Bank are already using mortgage transactions as part of the electronic conveyancing system.
Even greater benefits will emerge in stage 2, and that will do away with the paper shuffle that often goes on with these transactions where a number of parties have to come together and shuffle papers in order to settle a transaction. This will mean a saving on average of up to $395 per four-party settlement on an average saving of up to $108 for each vendor and purchaser.
That might not seem a lot on each transaction, President, but let me reinforce that more than $70 million of annual savings for the industry and community are forecast from this initiative. The Bracks government recognises the challenges of the future, and we are delivering on our promises to reduce cost to business and invest in services that matter to Victorian businesses -- and all that will flow on to jobs and make Victoria a great place not only to do business but to live, work and raise a family.
Extract from Hansard
Wednesday, May 23, 2007
ANZ to end paper loan trail
ANZ customers will be able to track their home loan applications online from initial form-filling to settlement of funds in their accounts as the bank becomes the first Australian major to take its mortgage operations completely electronic.
The technology will slash the 4.7million pieces of paper a year generated as part of ANZ's credit approval process.
The $70 million investment will cut the time taken to process a loan from up to a week to two days, and in theory will avoid the need for two million telephone inquiries a year relating to the status of loan applications.
Once the process is automated, a "small" proportion of about 900 back-office mortgage jobs would be sent to Bangalore in India, ANZ mortgages managing director Michael Rowland said yesterday.
The system involves the use of imaging technology, rather than paper, to digitise the mortgage process. But unlike low-doc loans, supporting documentation such as proof of earnings will still be required.
Mr Rowland said the technology had been successfully introduced by banks offshore, which were keen to reduce their costs, add to their range of products and make the mortgage approval process more efficient.
"This is a big change, because fundamentally the system now is paper-based," Mr Rowland said.
"If we don't do this, we won't be competitive; our profit margins continue to decline in mortgages, which is close to being the most competitive part of retail banking.
"International players like GE, BankWest and ING are playing very heavily in this space," he said. ANZ would be the only bank of the Big Four to fully automate all its mortgage processing.
This would enable work currently performed in Australia to be done offshore.
There are 1500 people employed in ANZ's mortgage area. The final number of jobs to be sent offshore was yet to be determined, Mr Rowland said, but the employees affected would be retrained and redeployed.
A number of big corporations with large customer bases, including all the major banks except the Commonwealth, are "offshoring" jobs, despite a vigorous campaign by the Finance Sector Union to keep the work at home.
Unlike business rivals that outsource to specialist firms overseas, ANZ has a company-owned facility in Bangalore. There the bank employs 1700 Indians on the same terms and conditions, but significantly less pay, than Australian workers would receive.
The Australian - news.com.au
By Richard Gluyas
May 15, 2007
This is huge news. The banking and mortgage processing system has been crying out for news like this.
A few questions
But $70M. Does it really cost this much to implement change?
Back end settlements has been and still is the bane of the conveyancing industry. The ANZ initiative is long overdue but welcome announcement. I for one would refer more business to the ANZ and I would expect that brokers would also welcome the change and refer more loans as a result. As the ANZ claims it reduces the bank end cost but I would expect ANZ's market share will increase as well. I trust the other banks will follow.
The technology will slash the 4.7million pieces of paper a year generated as part of ANZ's credit approval process.
The $70 million investment will cut the time taken to process a loan from up to a week to two days, and in theory will avoid the need for two million telephone inquiries a year relating to the status of loan applications.
Once the process is automated, a "small" proportion of about 900 back-office mortgage jobs would be sent to Bangalore in India, ANZ mortgages managing director Michael Rowland said yesterday.
The system involves the use of imaging technology, rather than paper, to digitise the mortgage process. But unlike low-doc loans, supporting documentation such as proof of earnings will still be required.
Mr Rowland said the technology had been successfully introduced by banks offshore, which were keen to reduce their costs, add to their range of products and make the mortgage approval process more efficient.
"This is a big change, because fundamentally the system now is paper-based," Mr Rowland said.
"If we don't do this, we won't be competitive; our profit margins continue to decline in mortgages, which is close to being the most competitive part of retail banking.
"International players like GE, BankWest and ING are playing very heavily in this space," he said. ANZ would be the only bank of the Big Four to fully automate all its mortgage processing.
This would enable work currently performed in Australia to be done offshore.
There are 1500 people employed in ANZ's mortgage area. The final number of jobs to be sent offshore was yet to be determined, Mr Rowland said, but the employees affected would be retrained and redeployed.
A number of big corporations with large customer bases, including all the major banks except the Commonwealth, are "offshoring" jobs, despite a vigorous campaign by the Finance Sector Union to keep the work at home.
Unlike business rivals that outsource to specialist firms overseas, ANZ has a company-owned facility in Bangalore. There the bank employs 1700 Indians on the same terms and conditions, but significantly less pay, than Australian workers would receive.
The Australian - news.com.au
By Richard Gluyas
May 15, 2007
This is huge news. The banking and mortgage processing system has been crying out for news like this.
A few questions
- when will this be implemented?
- will the customer's legal representative be part of the loop?
- what about introducing a digital loan?
But $70M. Does it really cost this much to implement change?
Back end settlements has been and still is the bane of the conveyancing industry. The ANZ initiative is long overdue but welcome announcement. I for one would refer more business to the ANZ and I would expect that brokers would also welcome the change and refer more loans as a result. As the ANZ claims it reduces the bank end cost but I would expect ANZ's market share will increase as well. I trust the other banks will follow.
Friday, May 18, 2007
South Australia - not to be left behind
Readiness Planning for NECS
Land Services Group of the Department for Administrative and Information Services has undertaken extensive consultation with stakeholders on the concept of electronic conveyancing in South Australia. This consultation undertaken as part of the land administration reform program ATLAS culminated in the publishing of a “Proposal for Digital Conveyancing in South Australia” in late 2004. Key actions identified in the proposal as necessary prior to the introduction of Electronic Conveyancing were:
* The removal of the Duplicate CT
* Implementation of Priority Notices
* Reforms to witnessing and Identification procedures
* Implementation of Dual Certification
* Introduction of Agency Agreements
Legislative changes to the Real Property Act to allow for electronic conveyancing have also been identified and forwarded for drafting.
This item appeared on the NECS pages
Land Services Group of the Department for Administrative and Information Services has undertaken extensive consultation with stakeholders on the concept of electronic conveyancing in South Australia. This consultation undertaken as part of the land administration reform program ATLAS culminated in the publishing of a “Proposal for Digital Conveyancing in South Australia” in late 2004. Key actions identified in the proposal as necessary prior to the introduction of Electronic Conveyancing were:
* The removal of the Duplicate CT
* Implementation of Priority Notices
* Reforms to witnessing and Identification procedures
* Implementation of Dual Certification
* Introduction of Agency Agreements
Legislative changes to the Real Property Act to allow for electronic conveyancing have also been identified and forwarded for drafting.
This item appeared on the NECS pages
June 1 - UK HIPS going live including Energy Performance Certificates
May 17. London House Commons Debate on HIPs, Housing Minister Yvette Cooper strongly defended HIPs and the importance of including Energy Performance Certificates (EPCs), saying they are vital in helping to tackle climate change while the packs give house-buyers more information upfront about their new home and cut costs for first-time buyers.
Yvette Cooper said:
“The only new document that is being added to the process is the Energy Performance Certificate. The certificates will give people’s homes an energy rating for the first time. They will give people not only the rating on their home but information on what they can do about it — what their fuel bills are likely to be and how they can cut them.
“The remaining elements of HIPs are the legal and search documents that one already needs when buying and selling a home, but they will be gathered at the beginning rather than the end of the process, to speed things up and improve competition. For many of us, buying and selling a home is a baffling process. There can be huge delays between offer and exchange. In complex chains, that can mean that sales fall through. Most people will struggle to keep track of what services they are getting and paying for. HIPs will make the process much clearer and faster”.
There's a message here for Victoria - surely we need to be debating the introduction of such a measure, both energy and water savings audits.
Yvette Cooper said:
“The only new document that is being added to the process is the Energy Performance Certificate. The certificates will give people’s homes an energy rating for the first time. They will give people not only the rating on their home but information on what they can do about it — what their fuel bills are likely to be and how they can cut them.
“The remaining elements of HIPs are the legal and search documents that one already needs when buying and selling a home, but they will be gathered at the beginning rather than the end of the process, to speed things up and improve competition. For many of us, buying and selling a home is a baffling process. There can be huge delays between offer and exchange. In complex chains, that can mean that sales fall through. Most people will struggle to keep track of what services they are getting and paying for. HIPs will make the process much clearer and faster”.
There's a message here for Victoria - surely we need to be debating the introduction of such a measure, both energy and water savings audits.
Wednesday, May 16, 2007
Iacocca - Where have all the leaders gone?
Referring to the mess in US politics, Iacocca asks "Why are we in this mess?"
How did we end up with this crowd in Washington? Well, we voted for them—or at least some of us did. But I'll tell you what we didn't do. We didn't agree to suspend the Constitution. We didn't agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come from that's a dictatorship, not a democracy.
And don't tell me it's all the fault of right-wing Republicans or liberal Democrats. That's an intellectually lazy argument, and it's part of the reason we're in this stew. We're not just a nation of factions. We're a people. We share common principles and ideals. And we rise and fall together.
Where are the voices of leaders who can inspire us to action and make us stand taller? What happened to the strong and resolute party of Lincoln? What happened to the courageous, populist party of FDR and Truman? There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?
The Test of a Leader
I've never been Commander in Chief, but I've been a CEO. I understand a few things about leadership at the top. I've figured out nine points—not ten (I don't want people accusing me of thinking I'm Moses). I call them the "Nine Cs of Leadership." They're not fancy or complicated. Just clear, obvious qualities that every true leader should have. We should look at how the current administration stacks up. Like it or not, this crew is going to be around until January 2009. Maybe we can learn something before we go to the polls in 2008. Then let's be sure we use the leadership test to screen the candidates who say they want to run the country. It's up to us to choose wisely.
So, here's my C list:
A leader has to show CURIOSITY. He has to listen to people outside of the "Yes, sir" crowd in his inner circle. He has to read voraciously, because the world is a big, complicated place. George W. Bush brags about never reading a newspaper. "I just scan the headlines," he says. Am I hearing this right? He's the President of the United States and he never reads a newspaper? Thomas Jefferson once said, "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate for a moment to prefer the latter." Bush disagrees. As long as he gets his daily hour in the gym, with Fox News piped through the sound system, he's ready to go.
If a leader never steps outside his comfort zone to hear different ideas, he grows stale. If he doesn't put his beliefs to the test, how does he know he's right? The inability to listen is a form of arrogance. It means either you think you already know it all, or you just don't care. Before the 2006 election, George Bush made a big point of saying he didn't listen to the polls. Yeah, that's what they all say when the polls stink. But maybe he should have listened, because 70 percent of the people were saying he was on the wrong track. It took a "thumping" on election day to wake him up, but even then you got the feeling he wasn't listening so much as he was calculating how to do a better job of convincing everyone he was right.
A leader has to be CREATIVE, go out on a limb, be willing to try something different. You know, think outside the box. George Bush prides himself on never changing, even as the world around him is spinning out of control. God forbid someone should accuse him of flip-flopping. There's a disturbingly messianic fervor to his certainty. Senator Joe Biden recalled a conversation he had with Bush a few months after our troops marched into Baghdad. Joe was in the Oval Office outlining his concerns to the President—the explosive mix of Shiite and Sunni, the disbanded Iraqi army, the problems securing the oil fields. "The President was serene," Joe recalled. "He told me he was sure that we were on the right course and that all would be well. 'Mr. President,' I finally said, 'how can you be so sure when you don't yet know all the facts?'" Bush then reached over and put a steadying hand on Joe's shoulder. "My instincts," he said. "My instincts." Joe was flabbergasted. He told Bush, "Mr. President, your instincts aren't good enough." Joe Biden sure didn't think the matter was settled. And, as we all know now, it wasn't.
Leadership is all about managing change—whether you're leading a company or leading a country. Things change, and you get creative. You adapt. Maybe Bush was absent the day they covered that at Harvard Business School.
A leader has to COMMUNICATE. I'm not talking about running off at the mouth or spouting sound bites. I'm talking about facing reality and telling the truth. Nobody in the current administration seems to know how to talk straight anymore. Instead, they spend most of their time trying to convince us that things are not really as bad as they seem. I don't know if it's denial or dishonesty, but it can start to drive you crazy after a while. Communication has to start with telling the truth, even when it's painful. The war in Iraq has been, among other things, a grand failure of communication. Bush is like the boy who didn't cry wolf when the wolf was at the door. After years of being told that all is well, even as the casualties and chaos mount, we've stopped listening to him.
A leader has to be a person of CHARACTER. That means knowing the difference between right and wrong and having the guts to do the right thing. Abraham Lincoln once said, "If you want to test a man's character, give him power." George Bush has a lot of power. What does it say about his character? Bush has shown a willingness to take bold action on the world stage because he has the power, but he shows little regard for the grievous consequences. He has sent our troops (not to mention hundreds of thousands of innocent Iraqi citizens) to their deaths—for what? To build our oil reserves? To avenge his daddy because Saddam Hussein once tried to have him killed? To show his daddy he's tougher? The motivations behind the war in Iraq are questionable, and the execution of the war has been a disaster. A man of character does not ask a single soldier to die for a failed policy.
A leader must have COURAGE. I'm talking about balls. (That even goes for female leaders.) Swagger isn't courage. Tough talk isn't courage. George Bush comes from a blue-blooded Connecticut family, but he likes to talk like a cowboy. You know, My gun is bigger than your gun. Courage in the twenty-first century doesn't mean posturing and bravado. Courage is a commitment to sit down at the negotiating table and talk.
If you're a politician, courage means taking a position even when you know it will cost you votes. Bush can't even make a public appearance unless the audience has been handpicked and sanitized. He did a series of so-called town hall meetings last year, in auditoriums packed with his most devoted fans. The questions were all softballs.
To be a leader you've got to have CONVICTION — a fire in your belly. You've got to have passion. You've got to really want to get something done. How do you measure fire in the belly? Bush has set the all-time record for number of vacation days taken by a U.S. President—four hundred and counting. He'd rather clear brush on his ranch than immerse himself in the business of governing. He even told an interviewer that the high point of his presidency so far was catching a seven-and-a-half-pound perch in his hand-stocked lake.
It's no better on Capitol Hill. Congress was in session only ninety-seven days in 2006. That's eleven days less than the record set in 1948, when President Harry Truman coined the term do-nothing Congress. Most people would expect to be fired if they worked so little and had nothing to show for it. But Congress managed to find the time to vote itself a raise. Now, that's not leadership.
A leader should have CHARISMA. I'm not talking about being flashy. Charisma is the quality that makes people want to follow you. It's the ability to inspire. People follow a leader because they trust him. That's my definition of charisma. Maybe George Bush is a great guy to hang out with at a barbecue or a ball game. But put him at a global summit where the future of our planet is at stake, and he doesn't look very presidential. Those frat-boy pranks and the kidding around he enjoys so much don't go over that well with world leaders. Just ask German Chancellor Angela Merkel, who received an unwelcome shoulder massage from our President at a G-8 Summit. When he came up behind her and started squeezing, I thought she was going to go right through the roof.
A leader has to be COMPETENT. That seems obvious, doesn't it? You've got to know what you're doing. More important than that, you've got to surround yourself with people who know what they're doing. Bush brags about being our first MBA President. Does that make him competent? Well, let's see. Thanks to our first MBA President, we've got the largest deficit in history, Social Security is on life support, and we've run up a half-a-trillion-dollar price tag (so far) in Iraq. And that's just for starters. A leader has to be a problem solver, and the biggest problems we face as a nation seem to be on the back burner.
You can't be a leader if you don't have COMMON SENSE. I call this Charlie Beacham's rule. When I was a young guy just starting out in the car business, one of my first jobs was as Ford's zone manager in Wilkes-Barre, Pennsylvania. My boss was a guy named Charlie Beacham, who was the East Coast regional manager. Charlie was a big Southerner, with a warm drawl, a huge smile, and a core of steel. Charlie used to tell me, "Remember, Lee, the only thing you've got going for you as a human being is your ability to reason and your common sense. If you don't know a dip of horseshit from a dip of vanilla ice cream, you'll never make it." George Bush doesn't have common sense. He just has a lot of sound bites. You know—Mr.they'll-welcome-us-as-liberators-no-child-left-behind-heck-of-a-job-Brownie-mission-accomplished Bush.
Former President Bill Clinton once said, "I grew up in an alcoholic home. I spent half my childhood trying to get into the reality-based world—and I like it here."
I think our current President should visit the real world once in a while.
The Biggest C is Crisis
Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.
On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. Where was George Bush? He was reading a story about a pet goat to kids in Florida when he heard about the attacks. He kept sitting there for twenty minutes with a baffled look on his face. It's all on tape. You can see it for yourself. Then, instead of taking the quickest route back to Washington and immediately going on the air to reassure the panicked people of this country, he decided it wasn't safe to return to the White House. He basically went into hiding for the day—and he told Vice President Dick Cheney to stay put in his bunker. We were all frozen in front of our TVs, scared out of our wits, waiting for our leaders to tell us that we were going to be okay, and there was nobody home. It took Bush a couple of days to get his bearings and devise the right photo op at Ground Zero.
That was George Bush's moment of truth, and he was paralyzed. And what did he do when he'd regained his composure? He led us down the road to Iraq—a road his own father had considered disastrous when he was President. But Bush didn't listen to Daddy. He listened to a higher father. He prides himself on being faith based, not reality based. If that doesn't scare the crap out of you, I don't know what will.
A Hell of a Mess
So here's where we stand. We're immersed in a bloody war with no plan for winning and no plan for leaving. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.
But when you look around, you've got to ask: "Where have all the leaders gone?" Where are the curious, creative communicators? Where are the people of character, courage, conviction, competence, and common sense? I may be a sucker for alliteration, but I think you get the point.
Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.
Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when "the Big Three" referred to Japanese car companies? How did this happen—and more important, what are we going to do about it?
Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.
I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bobblehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?
Had Enough?
Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope. I believe in America. In my lifetime I've had the privilege of living through some of America's greatest moments. I've also experienced some of our worst crises—the Great Depression, World War II, the Korean War, the Kennedy assassination, the Vietnam War, the 1970s oil crisis, and the struggles of recent years culminating with 9/11. If I've learned one thing, it's this: You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a call to action for people who, like me, believe in America. It's not too late, but it's getting pretty close. So let's shake off the horseshit and go to work. Let's tell 'em all we've had enough.
Excerpted from Where Have All the Leaders Gone?. Copyright © 2007 by Lee Iacocca. All rights reserved.
I haven't read the book, but Iacocca certainly is pissed off with the current leadership in the US, both GWB and Congress. In this excerpt he is letting off steam. But as for solutions I guess he is suggesting you need leadership and leadership that follows Lee's gospel of the 9Cs. As for the US it is stuck with GWB til Jan09.
How did we end up with this crowd in Washington? Well, we voted for them—or at least some of us did. But I'll tell you what we didn't do. We didn't agree to suspend the Constitution. We didn't agree to stop asking questions or demanding answers. Some of us are sick and tired of people who call free speech treason. Where I come from that's a dictatorship, not a democracy.
And don't tell me it's all the fault of right-wing Republicans or liberal Democrats. That's an intellectually lazy argument, and it's part of the reason we're in this stew. We're not just a nation of factions. We're a people. We share common principles and ideals. And we rise and fall together.
Where are the voices of leaders who can inspire us to action and make us stand taller? What happened to the strong and resolute party of Lincoln? What happened to the courageous, populist party of FDR and Truman? There was a time in this country when the voices of great leaders lifted us up and made us want to do better. Where have all the leaders gone?
The Test of a Leader
I've never been Commander in Chief, but I've been a CEO. I understand a few things about leadership at the top. I've figured out nine points—not ten (I don't want people accusing me of thinking I'm Moses). I call them the "Nine Cs of Leadership." They're not fancy or complicated. Just clear, obvious qualities that every true leader should have. We should look at how the current administration stacks up. Like it or not, this crew is going to be around until January 2009. Maybe we can learn something before we go to the polls in 2008. Then let's be sure we use the leadership test to screen the candidates who say they want to run the country. It's up to us to choose wisely.
So, here's my C list:
A leader has to show CURIOSITY. He has to listen to people outside of the "Yes, sir" crowd in his inner circle. He has to read voraciously, because the world is a big, complicated place. George W. Bush brags about never reading a newspaper. "I just scan the headlines," he says. Am I hearing this right? He's the President of the United States and he never reads a newspaper? Thomas Jefferson once said, "Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate for a moment to prefer the latter." Bush disagrees. As long as he gets his daily hour in the gym, with Fox News piped through the sound system, he's ready to go.
If a leader never steps outside his comfort zone to hear different ideas, he grows stale. If he doesn't put his beliefs to the test, how does he know he's right? The inability to listen is a form of arrogance. It means either you think you already know it all, or you just don't care. Before the 2006 election, George Bush made a big point of saying he didn't listen to the polls. Yeah, that's what they all say when the polls stink. But maybe he should have listened, because 70 percent of the people were saying he was on the wrong track. It took a "thumping" on election day to wake him up, but even then you got the feeling he wasn't listening so much as he was calculating how to do a better job of convincing everyone he was right.
A leader has to be CREATIVE, go out on a limb, be willing to try something different. You know, think outside the box. George Bush prides himself on never changing, even as the world around him is spinning out of control. God forbid someone should accuse him of flip-flopping. There's a disturbingly messianic fervor to his certainty. Senator Joe Biden recalled a conversation he had with Bush a few months after our troops marched into Baghdad. Joe was in the Oval Office outlining his concerns to the President—the explosive mix of Shiite and Sunni, the disbanded Iraqi army, the problems securing the oil fields. "The President was serene," Joe recalled. "He told me he was sure that we were on the right course and that all would be well. 'Mr. President,' I finally said, 'how can you be so sure when you don't yet know all the facts?'" Bush then reached over and put a steadying hand on Joe's shoulder. "My instincts," he said. "My instincts." Joe was flabbergasted. He told Bush, "Mr. President, your instincts aren't good enough." Joe Biden sure didn't think the matter was settled. And, as we all know now, it wasn't.
Leadership is all about managing change—whether you're leading a company or leading a country. Things change, and you get creative. You adapt. Maybe Bush was absent the day they covered that at Harvard Business School.
A leader has to COMMUNICATE. I'm not talking about running off at the mouth or spouting sound bites. I'm talking about facing reality and telling the truth. Nobody in the current administration seems to know how to talk straight anymore. Instead, they spend most of their time trying to convince us that things are not really as bad as they seem. I don't know if it's denial or dishonesty, but it can start to drive you crazy after a while. Communication has to start with telling the truth, even when it's painful. The war in Iraq has been, among other things, a grand failure of communication. Bush is like the boy who didn't cry wolf when the wolf was at the door. After years of being told that all is well, even as the casualties and chaos mount, we've stopped listening to him.
A leader has to be a person of CHARACTER. That means knowing the difference between right and wrong and having the guts to do the right thing. Abraham Lincoln once said, "If you want to test a man's character, give him power." George Bush has a lot of power. What does it say about his character? Bush has shown a willingness to take bold action on the world stage because he has the power, but he shows little regard for the grievous consequences. He has sent our troops (not to mention hundreds of thousands of innocent Iraqi citizens) to their deaths—for what? To build our oil reserves? To avenge his daddy because Saddam Hussein once tried to have him killed? To show his daddy he's tougher? The motivations behind the war in Iraq are questionable, and the execution of the war has been a disaster. A man of character does not ask a single soldier to die for a failed policy.
A leader must have COURAGE. I'm talking about balls. (That even goes for female leaders.) Swagger isn't courage. Tough talk isn't courage. George Bush comes from a blue-blooded Connecticut family, but he likes to talk like a cowboy. You know, My gun is bigger than your gun. Courage in the twenty-first century doesn't mean posturing and bravado. Courage is a commitment to sit down at the negotiating table and talk.
If you're a politician, courage means taking a position even when you know it will cost you votes. Bush can't even make a public appearance unless the audience has been handpicked and sanitized. He did a series of so-called town hall meetings last year, in auditoriums packed with his most devoted fans. The questions were all softballs.
To be a leader you've got to have CONVICTION — a fire in your belly. You've got to have passion. You've got to really want to get something done. How do you measure fire in the belly? Bush has set the all-time record for number of vacation days taken by a U.S. President—four hundred and counting. He'd rather clear brush on his ranch than immerse himself in the business of governing. He even told an interviewer that the high point of his presidency so far was catching a seven-and-a-half-pound perch in his hand-stocked lake.
It's no better on Capitol Hill. Congress was in session only ninety-seven days in 2006. That's eleven days less than the record set in 1948, when President Harry Truman coined the term do-nothing Congress. Most people would expect to be fired if they worked so little and had nothing to show for it. But Congress managed to find the time to vote itself a raise. Now, that's not leadership.
A leader should have CHARISMA. I'm not talking about being flashy. Charisma is the quality that makes people want to follow you. It's the ability to inspire. People follow a leader because they trust him. That's my definition of charisma. Maybe George Bush is a great guy to hang out with at a barbecue or a ball game. But put him at a global summit where the future of our planet is at stake, and he doesn't look very presidential. Those frat-boy pranks and the kidding around he enjoys so much don't go over that well with world leaders. Just ask German Chancellor Angela Merkel, who received an unwelcome shoulder massage from our President at a G-8 Summit. When he came up behind her and started squeezing, I thought she was going to go right through the roof.
A leader has to be COMPETENT. That seems obvious, doesn't it? You've got to know what you're doing. More important than that, you've got to surround yourself with people who know what they're doing. Bush brags about being our first MBA President. Does that make him competent? Well, let's see. Thanks to our first MBA President, we've got the largest deficit in history, Social Security is on life support, and we've run up a half-a-trillion-dollar price tag (so far) in Iraq. And that's just for starters. A leader has to be a problem solver, and the biggest problems we face as a nation seem to be on the back burner.
You can't be a leader if you don't have COMMON SENSE. I call this Charlie Beacham's rule. When I was a young guy just starting out in the car business, one of my first jobs was as Ford's zone manager in Wilkes-Barre, Pennsylvania. My boss was a guy named Charlie Beacham, who was the East Coast regional manager. Charlie was a big Southerner, with a warm drawl, a huge smile, and a core of steel. Charlie used to tell me, "Remember, Lee, the only thing you've got going for you as a human being is your ability to reason and your common sense. If you don't know a dip of horseshit from a dip of vanilla ice cream, you'll never make it." George Bush doesn't have common sense. He just has a lot of sound bites. You know—Mr.they'll-welcome-us-as-liberators-no-child-left-behind-heck-of-a-job-Brownie-mission-accomplished Bush.
Former President Bill Clinton once said, "I grew up in an alcoholic home. I spent half my childhood trying to get into the reality-based world—and I like it here."
I think our current President should visit the real world once in a while.
The Biggest C is Crisis
Leaders are made, not born. Leadership is forged in times of crisis. It's easy to sit there with your feet up on the desk and talk theory. Or send someone else's kids off to war when you've never seen a battlefield yourself. It's another thing to lead when your world comes tumbling down.
On September 11, 2001, we needed a strong leader more than any other time in our history. We needed a steady hand to guide us out of the ashes. Where was George Bush? He was reading a story about a pet goat to kids in Florida when he heard about the attacks. He kept sitting there for twenty minutes with a baffled look on his face. It's all on tape. You can see it for yourself. Then, instead of taking the quickest route back to Washington and immediately going on the air to reassure the panicked people of this country, he decided it wasn't safe to return to the White House. He basically went into hiding for the day—and he told Vice President Dick Cheney to stay put in his bunker. We were all frozen in front of our TVs, scared out of our wits, waiting for our leaders to tell us that we were going to be okay, and there was nobody home. It took Bush a couple of days to get his bearings and devise the right photo op at Ground Zero.
That was George Bush's moment of truth, and he was paralyzed. And what did he do when he'd regained his composure? He led us down the road to Iraq—a road his own father had considered disastrous when he was President. But Bush didn't listen to Daddy. He listened to a higher father. He prides himself on being faith based, not reality based. If that doesn't scare the crap out of you, I don't know what will.
A Hell of a Mess
So here's where we stand. We're immersed in a bloody war with no plan for winning and no plan for leaving. We're running the biggest deficit in the history of the country. We're losing the manufacturing edge to Asia, while our once-great companies are getting slaughtered by health care costs. Gas prices are skyrocketing, and nobody in power has a coherent energy policy. Our schools are in trouble. Our borders are like sieves. The middle class is being squeezed every which way. These are times that cry out for leadership.
But when you look around, you've got to ask: "Where have all the leaders gone?" Where are the curious, creative communicators? Where are the people of character, courage, conviction, competence, and common sense? I may be a sucker for alliteration, but I think you get the point.
Name me a leader who has a better idea for homeland security than making us take off our shoes in airports and throw away our shampoo? We've spent billions of dollars building a huge new bureaucracy, and all we know how to do is react to things that have already happened.
Name me one leader who emerged from the crisis of Hurricane Katrina. Congress has yet to spend a single day evaluating the response to the hurricane, or demanding accountability for the decisions that were made in the crucial hours after the storm. Everyone's hunkering down, fingers crossed, hoping it doesn't happen again. Now, that's just crazy. Storms happen. Deal with it. Make a plan. Figure out what you're going to do the next time.
Name me an industry leader who is thinking creatively about how we can restore our competitive edge in manufacturing. Who would have believed that there could ever be a time when "the Big Three" referred to Japanese car companies? How did this happen—and more important, what are we going to do about it?
Name me a government leader who can articulate a plan for paying down the debt, or solving the energy crisis, or managing the health care problem. The silence is deafening. But these are the crises that are eating away at our country and milking the middle class dry.
I have news for the gang in Congress. We didn't elect you to sit on your asses and do nothing and remain silent while our democracy is being hijacked and our greatness is being replaced with mediocrity. What is everybody so afraid of? That some bobblehead on Fox News will call them a name? Give me a break. Why don't you guys show some spine for a change?
Had Enough?
Hey, I'm not trying to be the voice of gloom and doom here. I'm trying to light a fire. I'm speaking out because I have hope. I believe in America. In my lifetime I've had the privilege of living through some of America's greatest moments. I've also experienced some of our worst crises—the Great Depression, World War II, the Korean War, the Kennedy assassination, the Vietnam War, the 1970s oil crisis, and the struggles of recent years culminating with 9/11. If I've learned one thing, it's this: You don't get anywhere by standing on the sidelines waiting for somebody else to take action. Whether it's building a better car or building a better future for our children, we all have a role to play. That's the challenge I'm raising in this book. It's a call to action for people who, like me, believe in America. It's not too late, but it's getting pretty close. So let's shake off the horseshit and go to work. Let's tell 'em all we've had enough.
Excerpted from Where Have All the Leaders Gone?. Copyright © 2007 by Lee Iacocca. All rights reserved.
I haven't read the book, but Iacocca certainly is pissed off with the current leadership in the US, both GWB and Congress. In this excerpt he is letting off steam. But as for solutions I guess he is suggesting you need leadership and leadership that follows Lee's gospel of the 9Cs. As for the US it is stuck with GWB til Jan09.
Tuesday, May 15, 2007
ANZ looks to back office savings in mortgage processing
AN industry-wide crunch in home-lending profit margins has led ANZ to embark on a three-year program to automate its mortgage processing operations.
The $70 million program will enable ANZ to offshore a "small" proportion of around 900 back-office jobs in the mortgage area to Bangalore in India, where the bank has its own facility.
In the half-year to March, ANZ gave up four basis points of home-lending margin at a cost to group profit of $40 million.
"We have to get a lot of that back," ANZ managing director mortgages Michael Rowland said.
"We're still working through how much we will get back, but there's a reasonable amount of cost savings in it."
As lending volume turns down and competition intensifies, the big banks are increasingly looking to offshoring and big-ticket information technology projects to cut costs and maintain profit growth.
While other banks too had automated part of their mortgage processing function or other areas of their operations, Mr Rowland claimed ANZ was the industry leader in "end-to-end" transformation.
Apart from cost reduction, Mr Rowland said the new platform would enable better management of higher mortgage volumes, as well as deliver new products more quickly.
The automation part of the project, involving greater use of imaging rather than paper processing to digitise the mortgage process, will absorb most of the $70 million.
But ANZ will also use so-called Six Sigma** management techniques to make the process more efficient and reduce multiple handling of documents.
The time taken to fully process a mortgage from application to settlement of funds in the customer's account will be cut from up to a week*** to two days.
Source The Australian IT
By Richard Gluyas
May 15, 2007
** Six Sigma is a system of practices originally developed by Motorola to systematically improve processes by eliminating defects. Defects are defined as units that are not members of the intended population. Since it was originally developed, Six Sigma has become an element of many Total Quality Management (TQM) initiatives.
Source Wikipedia
*** Where does the writer get the statistic to quote a mortgage can be processed in a week from application to money in the account. I have been doing conveyancing for long enough to know a furphy when I see one!!
The $70 million program will enable ANZ to offshore a "small" proportion of around 900 back-office jobs in the mortgage area to Bangalore in India, where the bank has its own facility.
In the half-year to March, ANZ gave up four basis points of home-lending margin at a cost to group profit of $40 million.
"We have to get a lot of that back," ANZ managing director mortgages Michael Rowland said.
"We're still working through how much we will get back, but there's a reasonable amount of cost savings in it."
As lending volume turns down and competition intensifies, the big banks are increasingly looking to offshoring and big-ticket information technology projects to cut costs and maintain profit growth.
While other banks too had automated part of their mortgage processing function or other areas of their operations, Mr Rowland claimed ANZ was the industry leader in "end-to-end" transformation.
Apart from cost reduction, Mr Rowland said the new platform would enable better management of higher mortgage volumes, as well as deliver new products more quickly.
The automation part of the project, involving greater use of imaging rather than paper processing to digitise the mortgage process, will absorb most of the $70 million.
But ANZ will also use so-called Six Sigma** management techniques to make the process more efficient and reduce multiple handling of documents.
The time taken to fully process a mortgage from application to settlement of funds in the customer's account will be cut from up to a week*** to two days.
Source The Australian IT
By Richard Gluyas
May 15, 2007
** Six Sigma is a system of practices originally developed by Motorola to systematically improve processes by eliminating defects. Defects are defined as units that are not members of the intended population. Since it was originally developed, Six Sigma has become an element of many Total Quality Management (TQM) initiatives.
Source Wikipedia
*** Where does the writer get the statistic to quote a mortgage can be processed in a week from application to money in the account. I have been doing conveyancing for long enough to know a furphy when I see one!!
Standards win for property market
A NATIONWIDE electronic platform for real estate conveyancing is a step closer following an agreement by the Lending Industry XML Initiative (LIXI) to develop common data standards.
National Electronic Conveyancing Office executive director Simon Libbis said LIXI's involvement was crucial for the project's success.
"It is invaluable to have data standards that are consistent with those currently used in mortgage processing," Mr Libbis said. "We are very pleased to have LIXI's expertise available to us for e-conveyancing."
NECO is a co-operative venture between state government agencies, conveyancers, banks and independent mortgage processors, which aims to build an electronic exchange by 2010.
The platform will provide a convenient means of handling changes in property ownership, payment of government duties, and lodging details with state land registries.
LIXI was set up in 2000 as a non-profit industry group with the aim of developing software standards for data exchange across the lending market.
LIXI chief executive Socrates Vasiliadis said the agreement validated the group's work and delivered value to members.
"This project will change the way transfers of property ownership are managed, and simplify the settlement process," he said.
The Australian IT Section
Karen Dearne
MAY 15, 2007
National Electronic Conveyancing Office executive director Simon Libbis said LIXI's involvement was crucial for the project's success.
"It is invaluable to have data standards that are consistent with those currently used in mortgage processing," Mr Libbis said. "We are very pleased to have LIXI's expertise available to us for e-conveyancing."
NECO is a co-operative venture between state government agencies, conveyancers, banks and independent mortgage processors, which aims to build an electronic exchange by 2010.
The platform will provide a convenient means of handling changes in property ownership, payment of government duties, and lodging details with state land registries.
LIXI was set up in 2000 as a non-profit industry group with the aim of developing software standards for data exchange across the lending market.
LIXI chief executive Socrates Vasiliadis said the agreement validated the group's work and delivered value to members.
"This project will change the way transfers of property ownership are managed, and simplify the settlement process," he said.
The Australian IT Section
Karen Dearne
MAY 15, 2007
Sunday, May 13, 2007
Young Lawyers Journal - Climate Change Issue
The Young Lawyers Section of the Law Institute of Victoria devoted an entire edition to addressing the monumental questions of climate change. The editors published a contribution
Conveyancing - its impact on climate change
Paper feeds the conveyancing and mortgage industry. We know we feel a pang of guilt when we hit the print button or copy and collate five times the 100 page vendor statement for the sale of another apartment in Southbank. The agent then makes further copies to hand out to prospective buyers. There just seems to be an insatiable cycle of wasted paper in the endless grind of the property and mortgage industry. In Victoria, it is a sobering to think that residential conveyancing consumes at least 52 km of paper every year.
By comparison, former federal Human Services Minister Joe Hockey said his department would look at destroying 275km of paper records held by Centrelink and three square kilometres of Medicare records as part of the access card project to digitise all its paper-based records.
The National Electronic Conveyancing System is coming and that will mean no more physical settlements and no more over-the-counter stamping and registration of the transfer and mortgage. But this will not put an end to the paper warfare. We will still have the requirement of the vendor statement, the contract of sale, the mortgage and documenting the loan contract.
But can we change? What changes can we make, collectively, as an industry to reverse the trend? The legal office is often just a great big paper processing machine. It receives, files, retrieves, creates, file notes, collates, copies, distributes and archives paper - piles of it. While the term the "paperless office" was coined in the 80s with the advent of the PC and the word processor, these tools actually spurred an addiction to paper. We now have the tools available to create "digital paper". PDF technology is the new environmentally-friendly digital paper.
Can we make conveyancing and mortgage processing an entirely digital process, not unlike share trading and the money markets that turnover billions daily? The answer is an emphatic Yes.
Canada and New Zealand may have led the way for electronic registration of land dealings, but Victoria is leading the way forward for online electronic settlements. A Victorian-based company 247legal.com.au has developed the first web-based delivery of vendor statements and contract documentation. The system is fully automated and saves time and money. Our firm has been using the systems for the past 24 months. True to the firm's roots to develop an ethically-based conveyancing practice, it does not possess a photocopier. Our costs are down and our revenues have grown exponentially.
The company 247legal.com.au provides an excellent forum to develop the concepts of digital conveyancing. The vendor disclosure concepts are well and truly proven. The next step would be having the purchaser electronically acknowledge receipt of the vendor statement, without actually ever having to print and physically sign the document.
There are not really any regulatory barriers to doing this, just years of entrenched practices of vendors and buyers signing physical documents. Introducing such changes is beyond the efforts of any individual. What is required is a quorum of lawyers to get together and initiate change. A group of like-minded young lawyers seeking change would be the ideal forum.
If we really want to stretch the boundaries and remove an even bigger environmental footprint, we should tackle the mortgage industry head on. The lack of communication is the problem. What needs to be done? Financial institutions must give lawyers and conveyancers:
• online tracking of client's mortgage status;
• online booking of settlements;
• online advice of available funds; and
• online settlement cheque details.
Lawyers unfortunately are locked into systems that see great swathes of forests disappearing for the wood chip industry for paper manufacture. And for what? Once the property transaction has settled, the transfer and mortgage are registered, money banked, who ever looks at the file again?
The article was put together by Brett Hayton, Jaci Wang and Michael Jellis of Hayton Kosky Lawyers.
Young Lawyers Journal Issue 36 April 2007
Editors Judd Young, White Cleland and Adam Bushby, Nicholls Legal
Conveyancing - its impact on climate change
Paper feeds the conveyancing and mortgage industry. We know we feel a pang of guilt when we hit the print button or copy and collate five times the 100 page vendor statement for the sale of another apartment in Southbank. The agent then makes further copies to hand out to prospective buyers. There just seems to be an insatiable cycle of wasted paper in the endless grind of the property and mortgage industry. In Victoria, it is a sobering to think that residential conveyancing consumes at least 52 km of paper every year.
By comparison, former federal Human Services Minister Joe Hockey said his department would look at destroying 275km of paper records held by Centrelink and three square kilometres of Medicare records as part of the access card project to digitise all its paper-based records.
The National Electronic Conveyancing System is coming and that will mean no more physical settlements and no more over-the-counter stamping and registration of the transfer and mortgage. But this will not put an end to the paper warfare. We will still have the requirement of the vendor statement, the contract of sale, the mortgage and documenting the loan contract.
But can we change? What changes can we make, collectively, as an industry to reverse the trend? The legal office is often just a great big paper processing machine. It receives, files, retrieves, creates, file notes, collates, copies, distributes and archives paper - piles of it. While the term the "paperless office" was coined in the 80s with the advent of the PC and the word processor, these tools actually spurred an addiction to paper. We now have the tools available to create "digital paper". PDF technology is the new environmentally-friendly digital paper.
Can we make conveyancing and mortgage processing an entirely digital process, not unlike share trading and the money markets that turnover billions daily? The answer is an emphatic Yes.
Canada and New Zealand may have led the way for electronic registration of land dealings, but Victoria is leading the way forward for online electronic settlements. A Victorian-based company 247legal.com.au has developed the first web-based delivery of vendor statements and contract documentation. The system is fully automated and saves time and money. Our firm has been using the systems for the past 24 months. True to the firm's roots to develop an ethically-based conveyancing practice, it does not possess a photocopier. Our costs are down and our revenues have grown exponentially.
The company 247legal.com.au provides an excellent forum to develop the concepts of digital conveyancing. The vendor disclosure concepts are well and truly proven. The next step would be having the purchaser electronically acknowledge receipt of the vendor statement, without actually ever having to print and physically sign the document.
There are not really any regulatory barriers to doing this, just years of entrenched practices of vendors and buyers signing physical documents. Introducing such changes is beyond the efforts of any individual. What is required is a quorum of lawyers to get together and initiate change. A group of like-minded young lawyers seeking change would be the ideal forum.
If we really want to stretch the boundaries and remove an even bigger environmental footprint, we should tackle the mortgage industry head on. The lack of communication is the problem. What needs to be done? Financial institutions must give lawyers and conveyancers:
• online tracking of client's mortgage status;
• online booking of settlements;
• online advice of available funds; and
• online settlement cheque details.
Lawyers unfortunately are locked into systems that see great swathes of forests disappearing for the wood chip industry for paper manufacture. And for what? Once the property transaction has settled, the transfer and mortgage are registered, money banked, who ever looks at the file again?
The article was put together by Brett Hayton, Jaci Wang and Michael Jellis of Hayton Kosky Lawyers.
Young Lawyers Journal Issue 36 April 2007
Editors Judd Young, White Cleland and Adam Bushby, Nicholls Legal
Print Less - The Green PDF
PDF documents are an environmentally friendly way to communicate, but only if you don’t click the Print button. "Print Less" is an awareness campaign by the lads at GreenPDF.com The message from GreenPDF is Reducing Greenhouse Gas Emissions One Ream at a Time.
247Legal has always been committed to the concept of digital conveyancing to make conveyancing faster, simpler and greener. An original idea was to make the Vendors Statement available to the public by a simple search at the web site 247legal.com.au Simple. Anyone can search, view or download the Section 32, copy of the title, the plan of subdivision etc. But you can't print it. The ability to print the PDF had been disabled. No printing allowed. If someone wants a print version they need to contact the estate agent to obtain a print copy. The result - less paper being consumed. And in many cases such as apartments, there can be vendor statements that are 100+ pages in length. Yet the buyer may only be interested in one or two specific pages in the Plan Subdivision. It makes complete sense to deliver the information digitally rather than printing and distributing multiple copies of the paper document.
Remember Print Less.
247Legal has always been committed to the concept of digital conveyancing to make conveyancing faster, simpler and greener. An original idea was to make the Vendors Statement available to the public by a simple search at the web site 247legal.com.au Simple. Anyone can search, view or download the Section 32, copy of the title, the plan of subdivision etc. But you can't print it. The ability to print the PDF had been disabled. No printing allowed. If someone wants a print version they need to contact the estate agent to obtain a print copy. The result - less paper being consumed. And in many cases such as apartments, there can be vendor statements that are 100+ pages in length. Yet the buyer may only be interested in one or two specific pages in the Plan Subdivision. It makes complete sense to deliver the information digitally rather than printing and distributing multiple copies of the paper document.
Remember Print Less.
Missent to Belgium
Australia Post: Caulfield - Belgium - Bentleigh. Having written off the possibility of receiving a package from a client enclosing an original will, original death certificate, etc. Australia Post finally came through with the goods, having crossed at least 2 continents!
Thursday, April 26, 2007
Fairfax the Digital Media Company
Extract from Fairfax Media CEO David Kirk
Our second priority has been rapid growth in our internet earnings. We have made the major and very successful acquisition of Trade Me and we have developed and grown a wide range of online businesses. In Australia we are #1 in news and information (our launch of brisbanetimes.com.au has been an unprecedented success), we are #1 in dating and holiday rentals and we have strong #2 positions in jobs, homes and cars classifieds. (behind seek, realestate.com.au and carsales)
Our business news and information and investor positions are very powerful with afr.com and BusinessDay.com.au, which complement each other as they cover and expand the market. We are rapidly implementing a successful online entertainment strategy with Austereo in music and Anytime for online video-on-demand downloads.
Our travel strategy is moving fast with online hotel bookings launched and online flights and cars on the way.
Overall, Fairfax Digital's contribution to Fairfax Media's profits has grown from 1% to 14% in two years and there is much, much more to come.
Our third priority has been to build a digital media company, by adapting our media products, working processes, systems and organisation to the new converged world of digital media.
And at the same time job cuts of 35. Perhaps that can be attributed to better productivity from technology changes
Our second priority has been rapid growth in our internet earnings. We have made the major and very successful acquisition of Trade Me and we have developed and grown a wide range of online businesses. In Australia we are #1 in news and information (our launch of brisbanetimes.com.au has been an unprecedented success), we are #1 in dating and holiday rentals and we have strong #2 positions in jobs, homes and cars classifieds. (behind seek, realestate.com.au and carsales)
Our business news and information and investor positions are very powerful with afr.com and BusinessDay.com.au, which complement each other as they cover and expand the market. We are rapidly implementing a successful online entertainment strategy with Austereo in music and Anytime for online video-on-demand downloads.
Our travel strategy is moving fast with online hotel bookings launched and online flights and cars on the way.
Overall, Fairfax Digital's contribution to Fairfax Media's profits has grown from 1% to 14% in two years and there is much, much more to come.
Our third priority has been to build a digital media company, by adapting our media products, working processes, systems and organisation to the new converged world of digital media.
And at the same time job cuts of 35. Perhaps that can be attributed to better productivity from technology changes
Tuesday, April 24, 2007
Depression - Lawyers top the list of professionals at most risk
LAWYERS are more likely to suffer depression than any other group of professionals in the country, reported by The Age.
They are also more prone than others to drinking and taking drugs to help ease the pain of their depression, research shows.
An obsession with billing targets, deadline pressure and inflexible working hours contributed to the problems.
The research, by mental health group beyondblue and management consultancy firm Beaton Consulting, found that 15 per cent of legal professionals experienced moderate or severe depressive symptoms, a rate 2½ times that of the general population. More than 5 per cent also admitted using non-prescription drugs and alcohol to manage.
Law Institute of Victoria chief executive Mike Brett-Young said law firms were reporting a growing attrition rate, particularly among younger lawyers.
"Because lawyers are also dealing with everyone else's problems they think they should be able to handle their own," he said.
Perhaps it is litigation lawyers are the most at risk. General property law is naturally less combative. I can understand the pressure that lawyers practising predominately in commercial, family and personal injury law must face over a period of time. As a professional it would be difficult to not get involved. I dont know what the answers are.
They are also more prone than others to drinking and taking drugs to help ease the pain of their depression, research shows.
An obsession with billing targets, deadline pressure and inflexible working hours contributed to the problems.
The research, by mental health group beyondblue and management consultancy firm Beaton Consulting, found that 15 per cent of legal professionals experienced moderate or severe depressive symptoms, a rate 2½ times that of the general population. More than 5 per cent also admitted using non-prescription drugs and alcohol to manage.
Law Institute of Victoria chief executive Mike Brett-Young said law firms were reporting a growing attrition rate, particularly among younger lawyers.
"Because lawyers are also dealing with everyone else's problems they think they should be able to handle their own," he said.
Perhaps it is litigation lawyers are the most at risk. General property law is naturally less combative. I can understand the pressure that lawyers practising predominately in commercial, family and personal injury law must face over a period of time. As a professional it would be difficult to not get involved. I dont know what the answers are.
Thursday, March 29, 2007
What is Office 2.0?
"Imagine a computer that never crashes, or gets infected by a virus. Imagine a computer onto which you never have to install any application. Imagine a computer that follows you wherever you go, be it at school, at work, abroad, or back home. This computer does not exist today, but it will in the future, and this future might be much closer than you think".
This is not a bad descriptor for the digital conveyancing project being undertaken by 247legal. Simple online collaboration between conveyancers and estate agents, vendors and buyers. And why stop there? The collaboration can be extended even further.
This is not a bad descriptor for the digital conveyancing project being undertaken by 247legal. Simple online collaboration between conveyancers and estate agents, vendors and buyers. And why stop there? The collaboration can be extended even further.
Sunday, March 18, 2007
res ipsa loquitur or why cant the govt leave our beaches alone
If the Bayside Council and Department of Sustainability & Environment are allowed to get away with the destruction of the Sandringham foreshore it will be a great tragedy.
The Royal Avenue groyne is one tragedy that has been allowed to remain for too long, the Southey Street groyne is an outrage. The damage to the Southey Street to Tennyson Street beach has been quick and swift with an entire beach being swept away in less than 2 months and that has been over the relatively quiet summer period. In simple terms, the groyne has been over-engineered and the results are obvious.
Quoting Wikipedia -
“The purpose of a groyne is to create and maintain a healthy beach on its updrift side, which in turn provides protection to the land behind. These effects are achieved through two main processes. First, groynes act as a barrier to physically stop sediment transport (sand) in the direction of longshore transport through the system. This causes a build-up of the beach on the groyne's updrift side. Secondly, groynes interrupt the tidal flow forcing the tidal current further offshore beyond the groyne end. This slows the tidal current inshore causing the deposition of heavier sediments and encouraging the beach to grow in size.
However, this is often accompanied by accelerated erosion of the downdrift beach, known as terminal groyne syndrome, as it occurs after the terminal groyne, which receives little or no sand via longshore transport. (It is important to realize that groynes do not add any new sand to the beach, but merely retain some of the existing sand on the updrift side of the groin.) If a groyne is correctly designed, then the amount of material it can hold will be limited, and excess sediment will be free to move on through the system. However, if a groyne is too large it may trap all sediment reaching it and this can cause severe beach erosion problems on the down-drift side, which in turn can result in coastal erosion problems.”
I can just hear DSE saying, well lets build another groyne. No. No. NO NO. Let mother nature care for herself with little or any guidance. REMOVE THE GROYNES. Renourish the beaches every few years if you have to. The GROYNES ARE AN EYESORE. I can hear the Heidelberg artists, Streeton, Roberts, McCubbin, Condor mourning the lost natural vistas.
In the eyes of the law, Bayside Council and Department of Sustainability & Environment are guilty of gross negligence. Res ipsa loquitur. This is the legal term from the Latin meaning literally, "The thing itself speaks" but is more often translated "The thing speaks for itself". The doctrine is applied to tort claims which, as a matter of law, do not have to be explained beyond the obvious facts.
Under the old common law rule, to use res ipsa loquitur in the context of negligence the plaintiff must prove that:
The Plaintiff here is the beloved Sandringham foreshore.
The defendants are the Bayside Council and Department of Sustainability & Environment.
The damage is not irreparable. But action must be swift. The two groynes need to be removed immediately. This is not a case of lets consult for the next 3 years. I don’t recall any public consultation before works started.
Please be put on notice, that if the work to remove the groynes is not begun by 30 June 2007, legal action will be instituted in the Supreme Court of Victoria by public outrage.
The Royal Avenue groyne is one tragedy that has been allowed to remain for too long, the Southey Street groyne is an outrage. The damage to the Southey Street to Tennyson Street beach has been quick and swift with an entire beach being swept away in less than 2 months and that has been over the relatively quiet summer period. In simple terms, the groyne has been over-engineered and the results are obvious.
Quoting Wikipedia -
“The purpose of a groyne is to create and maintain a healthy beach on its updrift side, which in turn provides protection to the land behind. These effects are achieved through two main processes. First, groynes act as a barrier to physically stop sediment transport (sand) in the direction of longshore transport through the system. This causes a build-up of the beach on the groyne's updrift side. Secondly, groynes interrupt the tidal flow forcing the tidal current further offshore beyond the groyne end. This slows the tidal current inshore causing the deposition of heavier sediments and encouraging the beach to grow in size.
However, this is often accompanied by accelerated erosion of the downdrift beach, known as terminal groyne syndrome, as it occurs after the terminal groyne, which receives little or no sand via longshore transport. (It is important to realize that groynes do not add any new sand to the beach, but merely retain some of the existing sand on the updrift side of the groin.) If a groyne is correctly designed, then the amount of material it can hold will be limited, and excess sediment will be free to move on through the system. However, if a groyne is too large it may trap all sediment reaching it and this can cause severe beach erosion problems on the down-drift side, which in turn can result in coastal erosion problems.”
I can just hear DSE saying, well lets build another groyne. No. No. NO NO. Let mother nature care for herself with little or any guidance. REMOVE THE GROYNES. Renourish the beaches every few years if you have to. The GROYNES ARE AN EYESORE. I can hear the Heidelberg artists, Streeton, Roberts, McCubbin, Condor mourning the lost natural vistas.
In the eyes of the law, Bayside Council and Department of Sustainability & Environment are guilty of gross negligence. Res ipsa loquitur. This is the legal term from the Latin meaning literally, "The thing itself speaks" but is more often translated "The thing speaks for itself". The doctrine is applied to tort claims which, as a matter of law, do not have to be explained beyond the obvious facts.
Under the old common law rule, to use res ipsa loquitur in the context of negligence the plaintiff must prove that:
- The harm would not ordinarily have occurred without someone's negligence
- The instrumentality of the harm was under the exclusive control of the defendant at the time of the likely negligent act
- The plaintiff did not contribute to the harm by his own negligence.
The Plaintiff here is the beloved Sandringham foreshore.
The defendants are the Bayside Council and Department of Sustainability & Environment.
The damage is not irreparable. But action must be swift. The two groynes need to be removed immediately. This is not a case of lets consult for the next 3 years. I don’t recall any public consultation before works started.
Please be put on notice, that if the work to remove the groynes is not begun by 30 June 2007, legal action will be instituted in the Supreme Court of Victoria by public outrage.
Wednesday, March 14, 2007
Archiving
How many law firms think about archiving beyond long term off-site archiving of the physical file?
Having recently lost access to a store room where I retained completed files, I was compelled to turn to a commercial alternative for long term off-site archiving. I made the decision there was no economic incentive or benefit to retain files older than 7 years. These older files are now shredded land fill. Lost for all eternity. When a client rings wanting to know whether the contract date for a purchase was pre-September 1985 all I can do is shrug. On this point I am researching this actual point to determine if their purchase was pre-Sep 85. The answer may lie with one of the statutory authorities who record such things.
Or you simply keep paying the ongoing price of paying monthly archive storage fees and offset the price by charging clients with a retrieval fee.
The problem of physical archives is universal for all law firms.
A better solution lies in digitising legal records on a continual ongoing daily basis. In other words maintain a digital archive, at least for all deeds and important documents like the contract of sale. Every small law firm should start by buying 1 or 2 desktop document feed scanners. The payback is not just short term but long term as there is close to a zero cost to maintaining a long term digital archive.
The NYT published an interesting article on the issue of archives contained in libraries and other important collections. History, Digitized (and Abridged)
Having recently lost access to a store room where I retained completed files, I was compelled to turn to a commercial alternative for long term off-site archiving. I made the decision there was no economic incentive or benefit to retain files older than 7 years. These older files are now shredded land fill. Lost for all eternity. When a client rings wanting to know whether the contract date for a purchase was pre-September 1985 all I can do is shrug. On this point I am researching this actual point to determine if their purchase was pre-Sep 85. The answer may lie with one of the statutory authorities who record such things.
Or you simply keep paying the ongoing price of paying monthly archive storage fees and offset the price by charging clients with a retrieval fee.
The problem of physical archives is universal for all law firms.
A better solution lies in digitising legal records on a continual ongoing daily basis. In other words maintain a digital archive, at least for all deeds and important documents like the contract of sale. Every small law firm should start by buying 1 or 2 desktop document feed scanners. The payback is not just short term but long term as there is close to a zero cost to maintaining a long term digital archive.
The NYT published an interesting article on the issue of archives contained in libraries and other important collections. History, Digitized (and Abridged)
Tuesday, March 13, 2007
US mortgage crisis looming
First the New York Times
While real estate prices were rising, the market for home loans operated like a well-oiled machine, providing ready money to borrowers and high returns to investors like pension funds, insurance companies, hedge funds and other institutions. Now this enormous and important machine is sputtering, and the effects are reverberating throughout Main Street, Wall Street and Washington.
Already, more than two dozen mortgage lenders have failed or closed their doors, and shares of big companies in the mortgage industry have declined significantly. Delinquencies on loans made to less creditworthy borrowers — known as subprime mortgages — recently reached 12.6 percent. Some banks have reported rising problems among borrowers that were deemed more creditworthy as well.
Like worms that surface after a torrential rain, revelations that emerge when an asset bubble bursts are often unattractive, involving dubious industry practices and even fraud. In the coming weeks, some mortgage market participants predict, investors will learn not only how lax real estate lending standards became, but also how hard to value these opaque securities are and how easy their values are to prop up.
Mortgages requiring little or no documentation became known colloquially as “liar loans.” An April 2006 report by the Mortgage Asset Research Institute, a consulting concern in Reston, Va., analyzed 100 loans in which the borrowers merely stated their incomes, and then looked at documents those borrowers had filed with the I.R.S. The resulting differences were significant: in 90 percent of loans, borrowers overstated their incomes 5 percent or more. But in almost 60 percent of cases, borrowers inflated their incomes by more than half.
Is Australia insulated against the cracks in the mortgage market that are widening in the US?
No, not whilst Australia's median house prices continues to be increasing. And certainly easy credit like the lo doc loan products keeps fueling the price increases.
crikey.com.au weighs in on the same topic
Glenn Dyer writes:
Some of the biggest names in US finance have been caught up in the spreading collapse of the so-called sub-prime mortgage market.
These include Citigroup, HSBC, Goldman Sachs, GMAC and General Electric's finance arm, GE Money which operates in Australia and aggressively markets similar loans through the Wizard Home Loans operation it bought in late 2004.
The crisis in the US sub-prime mortgage market (that's what we call no doc/low doc housing loans with no deposit) is worsening with the second biggest lender in the area likely to go bankrupt very shortly.
It's just not an isolated event: the sub-prime mortgage market in the US has been responsible for much of the boom in home prices over the past two years as more and more money has been lent. Some US analysts say that it has been the single most important factor in the US housing boom, which peaked last year and then collapsed, threatening the rest of the US economy.
Now billions of dollars of mortgages are going bad as default rates skyrocket, people lose their homes and new lending dries up.
GE Money bought a small sub-prime lender called WMC Mortgage Corp (US) in April 2004, fed it billions of dollars and watched it jump from number 12 to number five among sub-prime lenders.
Last Friday it shut off new loans, closed several offices and laid off at least 20% of its staff, some 450 people, as the realisation grew that it is going to lose a lot of money for GE.
The reason for the problems is that many loans were sold not only as 100% financings with no deposit and no or low documentation, but they contained cheap starter rates where the initial interest rate was held down for six months to more than a year.
Those higher rates are now kicking in and many people can't afford them: as well as the value of their houses being dragged down by the fall in the overall housing market. It's a horrible double whammy that has seen the industry contract and turn off the lending tap in the space of a month.
And why is this important in Australia? The purchase of WMC gave GE Money a taste for similar businesses and six months later it bought Wizard Home Loans and its parent, from a group of investors which included PBL, founder Mark Bouris and ABN Amro.
Last weekend saw Wizard advertising a new offering of a no doc/low doc loan with 100% finance (ie, no deposit), the very product it has stopped offering in the US because the business is imploding. Here's the Wizard website with its 100% finance offered in the banner headline at the top of the page.
There are growing problems with no doc/low doc/no deposit loans here, especially in the suburbs of western and southwestern Sydney where foreclosures are still rising and house prices are falling.
It's not the crisis it is in the US but it makes you wonder how GE can continue to offer this sort of finance here, with our problems, and knowing the problems that it has got itself into in the US.
While real estate prices were rising, the market for home loans operated like a well-oiled machine, providing ready money to borrowers and high returns to investors like pension funds, insurance companies, hedge funds and other institutions. Now this enormous and important machine is sputtering, and the effects are reverberating throughout Main Street, Wall Street and Washington.
Already, more than two dozen mortgage lenders have failed or closed their doors, and shares of big companies in the mortgage industry have declined significantly. Delinquencies on loans made to less creditworthy borrowers — known as subprime mortgages — recently reached 12.6 percent. Some banks have reported rising problems among borrowers that were deemed more creditworthy as well.
Like worms that surface after a torrential rain, revelations that emerge when an asset bubble bursts are often unattractive, involving dubious industry practices and even fraud. In the coming weeks, some mortgage market participants predict, investors will learn not only how lax real estate lending standards became, but also how hard to value these opaque securities are and how easy their values are to prop up.
Mortgages requiring little or no documentation became known colloquially as “liar loans.” An April 2006 report by the Mortgage Asset Research Institute, a consulting concern in Reston, Va., analyzed 100 loans in which the borrowers merely stated their incomes, and then looked at documents those borrowers had filed with the I.R.S. The resulting differences were significant: in 90 percent of loans, borrowers overstated their incomes 5 percent or more. But in almost 60 percent of cases, borrowers inflated their incomes by more than half.
Is Australia insulated against the cracks in the mortgage market that are widening in the US?
No, not whilst Australia's median house prices continues to be increasing. And certainly easy credit like the lo doc loan products keeps fueling the price increases.
crikey.com.au weighs in on the same topic
Glenn Dyer writes:
Some of the biggest names in US finance have been caught up in the spreading collapse of the so-called sub-prime mortgage market.
These include Citigroup, HSBC, Goldman Sachs, GMAC and General Electric's finance arm, GE Money which operates in Australia and aggressively markets similar loans through the Wizard Home Loans operation it bought in late 2004.
The crisis in the US sub-prime mortgage market (that's what we call no doc/low doc housing loans with no deposit) is worsening with the second biggest lender in the area likely to go bankrupt very shortly.
It's just not an isolated event: the sub-prime mortgage market in the US has been responsible for much of the boom in home prices over the past two years as more and more money has been lent. Some US analysts say that it has been the single most important factor in the US housing boom, which peaked last year and then collapsed, threatening the rest of the US economy.
Now billions of dollars of mortgages are going bad as default rates skyrocket, people lose their homes and new lending dries up.
GE Money bought a small sub-prime lender called WMC Mortgage Corp (US) in April 2004, fed it billions of dollars and watched it jump from number 12 to number five among sub-prime lenders.
Last Friday it shut off new loans, closed several offices and laid off at least 20% of its staff, some 450 people, as the realisation grew that it is going to lose a lot of money for GE.
The reason for the problems is that many loans were sold not only as 100% financings with no deposit and no or low documentation, but they contained cheap starter rates where the initial interest rate was held down for six months to more than a year.
Those higher rates are now kicking in and many people can't afford them: as well as the value of their houses being dragged down by the fall in the overall housing market. It's a horrible double whammy that has seen the industry contract and turn off the lending tap in the space of a month.
And why is this important in Australia? The purchase of WMC gave GE Money a taste for similar businesses and six months later it bought Wizard Home Loans and its parent, from a group of investors which included PBL, founder Mark Bouris and ABN Amro.
Last weekend saw Wizard advertising a new offering of a no doc/low doc loan with 100% finance (ie, no deposit), the very product it has stopped offering in the US because the business is imploding. Here's the Wizard website with its 100% finance offered in the banner headline at the top of the page.
There are growing problems with no doc/low doc/no deposit loans here, especially in the suburbs of western and southwestern Sydney where foreclosures are still rising and house prices are falling.
It's not the crisis it is in the US but it makes you wonder how GE can continue to offer this sort of finance here, with our problems, and knowing the problems that it has got itself into in the US.
Monday, February 26, 2007
MyHome
Crikey has been at its rumour mongering again -
MyHome feeling a bit homeless?
Now that only one franchise group (Elders) has signed up to the PBL-backed real estate website, the reality seems to be hitting home for many others. Why have LJ Hooker and others backed out? MyHome plans to go direct to the vendors of agents who use MyHome – that’s right, going "around" the real estate agent. Ray White has also said "no thank you" for the same reason. To make matters worse, MyHome is now suing Ray White (the largest franchise group in Australia) for deciding not to use MyHome. The only group promoting MyHome seems to be Raine & Horne in NSW, whose agencies are being told by Max Raine that they should stop advertising on all other real estate websites and only advertise on MyHome.
I did a quick side by side comparison for postcode 3204 - Bentleigh
MyHome - 50 entries - mostly Hocking Stuart
Realestate - 110 entries - supported by all agents
And the winner is - the punters will always decide that - and lets face facts - there is room only for two plus a number of specialty sites
Update as of March 13, 2007, Syney Morning Herald
Realestate.com.au has helpfully provided SMH with traffic figures for property classifieds in the first 10 days of March.
And it seems PBL's new site, myhome.com.au, is struggling to get off the ground, failing to reach 100,000 unique visitors despite the recent marketing drive.
Realestate.com.au had 1.6 million unique visitors over the period, followed by Fairfax Media's Domain.com.au with 852,000, according to the data from Nielsen/NetRatings.
Realestate.com.au also notes that users stayed on its site an average 11 minutes, compared to just 2 minutes for myhome.com.au.
I don't doubt the statistics
MyHome feeling a bit homeless?
Now that only one franchise group (Elders) has signed up to the PBL-backed real estate website, the reality seems to be hitting home for many others. Why have LJ Hooker and others backed out? MyHome plans to go direct to the vendors of agents who use MyHome – that’s right, going "around" the real estate agent. Ray White has also said "no thank you" for the same reason. To make matters worse, MyHome is now suing Ray White (the largest franchise group in Australia) for deciding not to use MyHome. The only group promoting MyHome seems to be Raine & Horne in NSW, whose agencies are being told by Max Raine that they should stop advertising on all other real estate websites and only advertise on MyHome.
I did a quick side by side comparison for postcode 3204 - Bentleigh
MyHome - 50 entries - mostly Hocking Stuart
Realestate - 110 entries - supported by all agents
And the winner is - the punters will always decide that - and lets face facts - there is room only for two plus a number of specialty sites
Update as of March 13, 2007, Syney Morning Herald
Realestate.com.au has helpfully provided SMH with traffic figures for property classifieds in the first 10 days of March.
And it seems PBL's new site, myhome.com.au, is struggling to get off the ground, failing to reach 100,000 unique visitors despite the recent marketing drive.
Realestate.com.au had 1.6 million unique visitors over the period, followed by Fairfax Media's Domain.com.au with 852,000, according to the data from Nielsen/NetRatings.
Realestate.com.au also notes that users stayed on its site an average 11 minutes, compared to just 2 minutes for myhome.com.au.
I don't doubt the statistics
Saturday, February 03, 2007
SPEAR - Electronic Subdivision
SPEAR covers the approval process for a number of Subdivision Act plans and includes the application for a planning permit, council certification and lodgment in Land Registry.
SPEAR allows applications to be electronically submitted to council, referred electronically for comment and tracked online from the initial planning stage through to lodgment and registration of the plan at Land Registry.
SPEAR is an internet system that enables a subdivision application to be lodged, managed, referred and tracked online. The system was developed by Land Victoria as part of its Land Exchange program.
SPEAR is comparable to an electronic mail box that stores data and allows subscribers to access this data. Its aim is to reduce the delays, duplication of data, double handling of documents and high administrative overheads that are characteristic of the current manual, paper based development approval process.
Source - Customer Information Bulletin DSE Jan 2007
SPEAR is up and running. The Plan is electronically uploaded to the Land Registry imaging system and digitally signed by Council and the Surveyor. Council digitally signs the Statement of Compliance.
The same principles that SPEAR is applying are the same as for the Electronic Conveyancing project and 247Legal is using with its Digital Conveyancing project.
SPEAR allows applications to be electronically submitted to council, referred electronically for comment and tracked online from the initial planning stage through to lodgment and registration of the plan at Land Registry.
SPEAR is an internet system that enables a subdivision application to be lodged, managed, referred and tracked online. The system was developed by Land Victoria as part of its Land Exchange program.
SPEAR is comparable to an electronic mail box that stores data and allows subscribers to access this data. Its aim is to reduce the delays, duplication of data, double handling of documents and high administrative overheads that are characteristic of the current manual, paper based development approval process.
Source - Customer Information Bulletin DSE Jan 2007
SPEAR is up and running. The Plan is electronically uploaded to the Land Registry imaging system and digitally signed by Council and the Surveyor. Council digitally signs the Statement of Compliance.
The same principles that SPEAR is applying are the same as for the Electronic Conveyancing project and 247Legal is using with its Digital Conveyancing project.
Home Buyers stamp duty relief ----- Not
Which home buyers are saying thanks Bracks for the stamp duty relief you have given us?
For a start you dont qualify for the Principal Place Residence concession for homes over $500K. That cuts out my electorate where median prices for homes is now well over $500K.
Think about this, you are eligible if your home costs between $115K and $500K. No-one can buy a home for $115K. I would have thought the majority of established home buyers is now pretty much above the $500K mark
And get this, those it might be targeting being the First Home Buyers, well think twice, they dont get it. The first home buyers elects which "benefit" they will take - the PPR concession or the First Home Bonus. No double dipping boys and girls.
And if you haven't already seen the new form, well the SRO has been busy designing forms that should be a simple one page document. Well those days as we all know are well past us. The PPR stat dec is 3 pages plus the explanatory notes.
You can download a copy here.
And for the sheer hell of it, I have redesigned a user friendly one pager, just like the good old days when the chattels stat dec was introduced. Feel welcome to download it and use it with my blessing. If you can ever find an occasion to ever use it.
For a start you dont qualify for the Principal Place Residence concession for homes over $500K. That cuts out my electorate where median prices for homes is now well over $500K.
Think about this, you are eligible if your home costs between $115K and $500K. No-one can buy a home for $115K. I would have thought the majority of established home buyers is now pretty much above the $500K mark
And get this, those it might be targeting being the First Home Buyers, well think twice, they dont get it. The first home buyers elects which "benefit" they will take - the PPR concession or the First Home Bonus. No double dipping boys and girls.
And if you haven't already seen the new form, well the SRO has been busy designing forms that should be a simple one page document. Well those days as we all know are well past us. The PPR stat dec is 3 pages plus the explanatory notes.
You can download a copy here.
And for the sheer hell of it, I have redesigned a user friendly one pager, just like the good old days when the chattels stat dec was introduced. Feel welcome to download it and use it with my blessing. If you can ever find an occasion to ever use it.
Saturday, January 27, 2007
PM announces Federal control over the Murray-Darling
Will the States accede control over inland water rights of the Murray-Darling to the Federal government?
Constitutional law experts questioned whether the PM had the legal power to take control of the system, which apparantly supplies water to 85% of Australia's irrigated crops.
20 odd years ago the Federal Government passed laws that overrided the Tasmanian government's plan to dam the Gordon Franklin. Then they used the external affairs power .
If the States dont hand over their power, Mr Howard will have three choices
The Commonwealth could use a range of powers to cover many of the areas covered in the Governments blue-print
All this points more and more to the people of this country understanding that State Governments are past their use by date. Federal Government needs to be linked to strong regional / local government.
Ditto for a centralised Australian property register with uniform property laws.
Constitutional law experts questioned whether the PM had the legal power to take control of the system, which apparantly supplies water to 85% of Australia's irrigated crops.
20 odd years ago the Federal Government passed laws that overrided the Tasmanian government's plan to dam the Gordon Franklin. Then they used the external affairs power .
If the States dont hand over their power, Mr Howard will have three choices
- he could drop the plan
- take it to the High Court, or
- seek a mandate for change through a referendum
The Commonwealth could use a range of powers to cover many of the areas covered in the Governments blue-print
- the corporations power could be used to provide legislation surrounding business using water in the basin
- the external affairs power could be used to write legislation concerning treaties that cover the environment and water quality.
- apparently it would be difficult to use the trade and commerce power, thanks to section 100 (this says states have the right to reasonable use of water for conservation and irrigation
All this points more and more to the people of this country understanding that State Governments are past their use by date. Federal Government needs to be linked to strong regional / local government.
Ditto for a centralised Australian property register with uniform property laws.
Sunday, January 21, 2007
Ever lost a settlement bank cheque?
Conveyancing is a serious adult game of pass the parcel. Come settlement you hand over the title and the other side collects the sale proceeds by bank cheque. Losing the title or losing the bank cheque comes at a cost.
Well only the other day we handed over settlement bank cheques and collected the title, transfer and discharge. Our firm personally handed over to the NAB a bank cheque for $53,317 being part of the funds required to settle.
Just before 5pm we get a phone call from NAB settlement department - "We have lost or misplaced the bank cheques; did our settlement clerk take the cheque(s) by mistake?"
We checked and no, our settlement agent did not have the cheques. Rightly so the NAB asked "Can you please stop the bank cheques?"
Next morning I went to the Commonwealth and without a problem they stopped the cheque and re-issued a fresh bank cheque for $53,317. Again all this comes at a cost, being time and bank charges and for the party losing the cheque the frustration and questions will I recover the lost money. I have sent NAB an invoice for our time spent in stopping and re-issuing the bank cheque on the 9th Jan, but funny thing is they haven't paid the invoice, thus I am still sitting on their funds pending payment.
Again when the era of electronic settlements and electronic registration of titles office dealings begins, such incidents as described will hopefully become a thing of the past
Well only the other day we handed over settlement bank cheques and collected the title, transfer and discharge. Our firm personally handed over to the NAB a bank cheque for $53,317 being part of the funds required to settle.
Just before 5pm we get a phone call from NAB settlement department - "We have lost or misplaced the bank cheques; did our settlement clerk take the cheque(s) by mistake?"
We checked and no, our settlement agent did not have the cheques. Rightly so the NAB asked "Can you please stop the bank cheques?"
Next morning I went to the Commonwealth and without a problem they stopped the cheque and re-issued a fresh bank cheque for $53,317. Again all this comes at a cost, being time and bank charges and for the party losing the cheque the frustration and questions will I recover the lost money. I have sent NAB an invoice for our time spent in stopping and re-issuing the bank cheque on the 9th Jan, but funny thing is they haven't paid the invoice, thus I am still sitting on their funds pending payment.
Again when the era of electronic settlements and electronic registration of titles office dealings begins, such incidents as described will hopefully become a thing of the past
ANZ announces major mortgage IT project
ANZ has announced two major IT projects. One is the way it deals with corporate customers that will move corporate and business accounts online in a way that mirrors systems running the personal banking portal.
The other major technology project planned for 2007 year involves introducing software to help automate mortgage processing in the ANZ's personal banking division.
Mr Dalton, who was appointed ANZ CIO in 2006 has announced another important IT project, which affects mortgage processing, is a mortgage automation program, which involves introducing workflow decision software to help automate the back-office component of our mortgages business.
But will it create a portal giving lawyers and conveyancers –
It would be a real coup if it does.
Source Australian IT 16 Jan 07
NYT Study Says Computers Give Big Boosts to Productivity
The other major technology project planned for 2007 year involves introducing software to help automate mortgage processing in the ANZ's personal banking division.
Mr Dalton, who was appointed ANZ CIO in 2006 has announced another important IT project, which affects mortgage processing, is a mortgage automation program, which involves introducing workflow decision software to help automate the back-office component of our mortgages business.
But will it create a portal giving lawyers and conveyancers –
- Online tracking of client’s mortgage status
- Online booking of settlements
- Online advice of available funds
- Online settlement cheque details
It would be a real coup if it does.
Source Australian IT 16 Jan 07
NYT Study Says Computers Give Big Boosts to Productivity
Sunday, January 07, 2007
What we've got here is (a) failure to communicate
2007 New Year’s Resolution
I was thinking what realistic contribution could the major banks make to the mortgage and conveyancing industry that could make a real difference in 2007?
Not unlike most new year’s resolutions, I am giving up cigarettes or I am going to lose 10 kilos such lame resolves get confined to the waste bin for another year.
The great crime the banks repeat ad nauseum and to quote Cool Hand Luke “What we've got here is failure to communicate”.
Communication – or actually the lack of it. That is the problem. And if any of you bankers want to leave a great legacy this is one area you need to fix and everyone would be eternally grateful. I know the State Government’s eConveyancing is on the agenda and is happening but we cannot afford to wait another 10 years for this to kick in.
You can easily fix the problem now.
What needs to be done? – Give lawyers and conveyancers -
That’s it – simple. Think how much more streamlined settlements would become. Your settlement staff could be redployed to deal with the real issues and problems that arise. The frustration of putting law clerks and conveyancers on hold would dry up. You get the picture.
Look at what you achieved when you introduced ATMs and online banking.
The dollar investment in making this one new year resolution happen would be very low and your ROI would be quickly recouped. Maybe you are ready to surprise us and you are all poised to release such a service. Gadens, I understand, has already started down this path and they need to be applauded.
There are a whole lot of law clerks and conveyancers fed up and frustrated with the system.
Law clerks and conveyancers are like Luke slumped in the culvert beside the roadway, the frustrated Captain recovers his composure and delivers the line “What we've got here is...failure to communicate.”, pronouncing his summary judgment of the problem: that it can be nothing more than a matter of Luke failing to understand the one-way nature of the communication that is incumbent on his present demotion in social status.
I was thinking what realistic contribution could the major banks make to the mortgage and conveyancing industry that could make a real difference in 2007?
Not unlike most new year’s resolutions, I am giving up cigarettes or I am going to lose 10 kilos such lame resolves get confined to the waste bin for another year.
The great crime the banks repeat ad nauseum and to quote Cool Hand Luke “What we've got here is failure to communicate”.
Communication – or actually the lack of it. That is the problem. And if any of you bankers want to leave a great legacy this is one area you need to fix and everyone would be eternally grateful. I know the State Government’s eConveyancing is on the agenda and is happening but we cannot afford to wait another 10 years for this to kick in.
You can easily fix the problem now.
What needs to be done? – Give lawyers and conveyancers -
- Online tracking of client’s mortgage status
- Online booking of settlements
- Online advice of available funds
- Online settlement cheque details
That’s it – simple. Think how much more streamlined settlements would become. Your settlement staff could be redployed to deal with the real issues and problems that arise. The frustration of putting law clerks and conveyancers on hold would dry up. You get the picture.
Look at what you achieved when you introduced ATMs and online banking.
The dollar investment in making this one new year resolution happen would be very low and your ROI would be quickly recouped. Maybe you are ready to surprise us and you are all poised to release such a service. Gadens, I understand, has already started down this path and they need to be applauded.
There are a whole lot of law clerks and conveyancers fed up and frustrated with the system.
Law clerks and conveyancers are like Luke slumped in the culvert beside the roadway, the frustrated Captain recovers his composure and delivers the line “What we've got here is...failure to communicate.”, pronouncing his summary judgment of the problem: that it can be nothing more than a matter of Luke failing to understand the one-way nature of the communication that is incumbent on his present demotion in social status.
Tuesday, November 28, 2006
Fraud and Identity
The enemy of any titles registration system is fraud. Students of property law learn that the major exception to indefeasibility of title is fraud (section 41 Transfer of Land Act).
In the absence of title insurance, who bears the cost of fraud on the register? The Registrar of Titles? The Lawyer? The Rightful Owner? The Mortgagee?
I am personally convinced the electronic conveyancing initiative will reduce the incidence of fraud. There are several initiatives, which combined together will produce a superior registration system:
I am concerned that today’s current systems is open to abuse. This is evidenced by reported frauds in North America and close to home New South Wales. Undoubtedly there are the unreported frauds that don’t get any publicity. As a property lawyer I can see various lines of weakness. Not so much fraud but as I have mentioned before you don’t need a 100 point check to be registered on title. How piss weak is that.
The sooner duplicate titles are made redundant as with the paper registration system the better off we will be.
Identity - I strongly support lawyers, conveyancers and mortgagees having to identify clients. This will be a giant step forward. It simply cant be a retrograde step. Could someone produce a wad of concocted bogus identity documents. No doubt. And if you have any doubts there are or will be separate independent checks you can make.
Two factor digital signatures. EC is introducing a digital signature which can only be applied to an instrument provided the Subscriber can only sign documents on a particular computer. Thus it will be difficult for the Subscriber to deny that it was or was not his signature. Yes, the system could be open to a rogue Subscriber, and that is a risk. Bruce Schneier has published an interesting article that questions the efficacy of digital signatures. In isolation I would agree with his arguments. And yet Bruce provides some contradictory remarks to his main argument against digital signatures -
“This is not to say that digital signatures are useless. There are many instances where the insecurities discussed here are not relevant, or where the dollar value of the signatures is small enough not to warrant worrying about them. There are also instances where authenticating to the signing computer is good enough, and where no further authentication is required. And there are instances where real-world relationships can obviate the legal requirements that digital signatures have been asked to satisfy.
Digital signatures prove, mathematically, that a secret value known as the private key was present in a computer at the time Alice's signature was calculated. It is a small step from that to assume that Alice entered that key into the computer at the time of signing. But it is a much larger step to assume that Alice intended a particular document to be signed. And without a tamperproof computer trusted by Alice, you can expect "digital signature experts" to show up in court contesting a lot of digital signatures.”
Because the digital signature / private key will need to be used on a particular computer with password security the opportunity for your average fraudster to have access is remote.
But as I said in the introduction the system of electronic registration is the sum of the parts.
Multiple parties. Every transaction will have at least two parties and in many cases there will be 4 parties to any sale and purchase. That in its own right will produce large hurdles for fraud.
Paper audit Trail. Paper trails have not been eliminated from e-conveyancing. There will still be a requirement for paper contracts. Paper loan documentation. And even paper Representation Agreements and copies of identity documents. The combination of the described paper audit trails, identity requirements and e-conveyancing authentication methods, I believe lowers the risk of fraud on the register.
Is there a perfect system? No. Bruce Schneier’s article on fraud is essential reading. “Fraud has been perpetrated against every commerce system man has ever invented, from gold coin to stock certificates to paper checks to credit cards. Electronic commerce systems will be no different”
Should there also be compulsory title insurance? I cant see why not. That way everyone pays.
Bruce Schneier’s articles:
Digital Signatures
Fraud
In the absence of title insurance, who bears the cost of fraud on the register? The Registrar of Titles? The Lawyer? The Rightful Owner? The Mortgagee?
I am personally convinced the electronic conveyancing initiative will reduce the incidence of fraud. There are several initiatives, which combined together will produce a superior registration system:
- Identity requirements
- Two factor digital signatures
- Multiple parties to the settlement and registration
- Paper audit trails
I am concerned that today’s current systems is open to abuse. This is evidenced by reported frauds in North America and close to home New South Wales. Undoubtedly there are the unreported frauds that don’t get any publicity. As a property lawyer I can see various lines of weakness. Not so much fraud but as I have mentioned before you don’t need a 100 point check to be registered on title. How piss weak is that.
The sooner duplicate titles are made redundant as with the paper registration system the better off we will be.
Identity - I strongly support lawyers, conveyancers and mortgagees having to identify clients. This will be a giant step forward. It simply cant be a retrograde step. Could someone produce a wad of concocted bogus identity documents. No doubt. And if you have any doubts there are or will be separate independent checks you can make.
Two factor digital signatures. EC is introducing a digital signature which can only be applied to an instrument provided the Subscriber can only sign documents on a particular computer. Thus it will be difficult for the Subscriber to deny that it was or was not his signature. Yes, the system could be open to a rogue Subscriber, and that is a risk. Bruce Schneier has published an interesting article that questions the efficacy of digital signatures. In isolation I would agree with his arguments. And yet Bruce provides some contradictory remarks to his main argument against digital signatures -
“This is not to say that digital signatures are useless. There are many instances where the insecurities discussed here are not relevant, or where the dollar value of the signatures is small enough not to warrant worrying about them. There are also instances where authenticating to the signing computer is good enough, and where no further authentication is required. And there are instances where real-world relationships can obviate the legal requirements that digital signatures have been asked to satisfy.
Digital signatures prove, mathematically, that a secret value known as the private key was present in a computer at the time Alice's signature was calculated. It is a small step from that to assume that Alice entered that key into the computer at the time of signing. But it is a much larger step to assume that Alice intended a particular document to be signed. And without a tamperproof computer trusted by Alice, you can expect "digital signature experts" to show up in court contesting a lot of digital signatures.”
Because the digital signature / private key will need to be used on a particular computer with password security the opportunity for your average fraudster to have access is remote.
But as I said in the introduction the system of electronic registration is the sum of the parts.
Multiple parties. Every transaction will have at least two parties and in many cases there will be 4 parties to any sale and purchase. That in its own right will produce large hurdles for fraud.
Paper audit Trail. Paper trails have not been eliminated from e-conveyancing. There will still be a requirement for paper contracts. Paper loan documentation. And even paper Representation Agreements and copies of identity documents. The combination of the described paper audit trails, identity requirements and e-conveyancing authentication methods, I believe lowers the risk of fraud on the register.
Is there a perfect system? No. Bruce Schneier’s article on fraud is essential reading. “Fraud has been perpetrated against every commerce system man has ever invented, from gold coin to stock certificates to paper checks to credit cards. Electronic commerce systems will be no different”
Should there also be compulsory title insurance? I cant see why not. That way everyone pays.
Bruce Schneier’s articles:
Digital Signatures
Fraud
Saturday, November 25, 2006
Buyers Beware
Will the buyers agent become more and more prevalent? Buyers are at a distinct disadvantage in the negotiation stakes. The agent is acting first for the seller and secondly for himself.
The local agent gets to know what buyers are out there. They see them at the inspections, at auctions, and they learn a great deal from these interactions. The buyer may have been the underbidder. He knows the price range the buyer is looking at and roughly what the maximum that buyer can pay. And it is this information the agent uses "against you".
Whereas the buyer doesn't know or meet the vendor or what is motivating the vendor to sell.
domain.com.au published this advice: Real-estate agent Peter Dempsey, director of The Dempsey Agency
"Play your cards close to your chest. The agent is not working on your behalf but should be acting in the seller's best interests, so you don't want to give them too much information. Otherwise it could work against you in the negotiation process. The agent may ask you if you have your finance arranged. Confirm you have but don't tell the agent about your buying ability. Certainly, don't say you can go to $410,000 or borrow up to $450,000. That sort of information should never be revealed. Don't disclose your profession either. Reveal nothing more than scant details so the agent can simply narrow down the purchase for you.
"If the agent offers properties beyond your price range, then you can acknowledge that. You can't keep money out of the equation all of the time. When you are negotiating over the last $20,000, you may say you don't have the ability to go further and your mortgage offer is set at X amount. First-time buyers often allow the real estate agent to control the conversation and negotiation. You have to take that control out of the hands of the agent. This slow market allows buyers to do that."
Or just use a Buyers Agent.
The local agent gets to know what buyers are out there. They see them at the inspections, at auctions, and they learn a great deal from these interactions. The buyer may have been the underbidder. He knows the price range the buyer is looking at and roughly what the maximum that buyer can pay. And it is this information the agent uses "against you".
Whereas the buyer doesn't know or meet the vendor or what is motivating the vendor to sell.
domain.com.au published this advice: Real-estate agent Peter Dempsey, director of The Dempsey Agency
"Play your cards close to your chest. The agent is not working on your behalf but should be acting in the seller's best interests, so you don't want to give them too much information. Otherwise it could work against you in the negotiation process. The agent may ask you if you have your finance arranged. Confirm you have but don't tell the agent about your buying ability. Certainly, don't say you can go to $410,000 or borrow up to $450,000. That sort of information should never be revealed. Don't disclose your profession either. Reveal nothing more than scant details so the agent can simply narrow down the purchase for you.
"If the agent offers properties beyond your price range, then you can acknowledge that. You can't keep money out of the equation all of the time. When you are negotiating over the last $20,000, you may say you don't have the ability to go further and your mortgage offer is set at X amount. First-time buyers often allow the real estate agent to control the conversation and negotiation. You have to take that control out of the hands of the agent. This slow market allows buyers to do that."
Or just use a Buyers Agent.
Termites
This list of cover-ups and estimated costs to repair is based on the findings of Archicentre conducting pre-purchase housing inspections in Australia and the Archicentre Cost Guide.
Should changes in legislation be debated to make Building Inspection Reports mandatory disclosure when a property is put up for sale? I believe the ACT has such a regime. The Vendor foots the cost of the Inspection Report and is reimbursed by the ultimate buyer.
Here's a link to an article "What lies beneath" by Robyn Willis published in the Daily Telegraph
- Illegal building. Up to $100,000.
- Cracking. Up to $50,000. About $3000 to repair. Internal walls patched and painted, external walls concealed behind plants or trellis.
- Roof problems. Up to $20,000. Rusty metal roofs painted, tile roofs patched with lead. Damaged roof framing propped up in roof space.
- Termites, borers, and timber rot. Up to $20,000. On average $5000 to repair. Floor damage patched and concealed under carpets.
- Rotten weatherboards and windows. Up to $10,000. Rot patched with filler or covered with tin then painted.
- Rotten stumps. On average $8000 to repair. Floors temporarily propped to prevent bouncing.
- Faulty/illegal wiring. About $6000 to repair.
- Faulty/illegal plumbing. Same as previous.
- Damp. On average $5000 to repair. Walls painted or furniture placed against damaged walls.
- Guttering/downpipes. About $3000 to repair. Rusty gutters patched and painted.
Should changes in legislation be debated to make Building Inspection Reports mandatory disclosure when a property is put up for sale? I believe the ACT has such a regime. The Vendor foots the cost of the Inspection Report and is reimbursed by the ultimate buyer.
Here's a link to an article "What lies beneath" by Robyn Willis published in the Daily Telegraph
Investing for Income or Capital Gain?
The quandry for many investors is devising a strategy for property investment and sticking to it. Do you invest for positive cash flow and what is positive cash flow? For the purists positive cash flow does not mean taking into account depreciation and income tax benefits.
Almost a given is both positive and negative gearing primarily require a long-term commitment in order to maximise gains. However, they don’t really go hand in hand.
Michael Yardney of Metropole Properties says, “Properties that tend to have positive cash flow have poorer capital growth, whereas properties that have good capital growth in general have poorer cash flow."
Bronwyn Davis writing for realestate.com.au gives a thorough insight on the subject of buying for income or buying for capital gain; positive cash flow or negative gearing.
However for most early investors, their choices will be limited by what they can afford to commit. Their affordability limit will be dictated by two factors: how much equity they have in the properties they own and what is their disposable income that can be committed to the new investment.
And for the majority of the population, such constraints puts the $1M property in Brighton beyond their reach. Happy searching.
Almost a given is both positive and negative gearing primarily require a long-term commitment in order to maximise gains. However, they don’t really go hand in hand.
Michael Yardney of Metropole Properties says, “Properties that tend to have positive cash flow have poorer capital growth, whereas properties that have good capital growth in general have poorer cash flow."
Bronwyn Davis writing for realestate.com.au gives a thorough insight on the subject of buying for income or buying for capital gain; positive cash flow or negative gearing.
However for most early investors, their choices will be limited by what they can afford to commit. Their affordability limit will be dictated by two factors: how much equity they have in the properties they own and what is their disposable income that can be committed to the new investment.
And for the majority of the population, such constraints puts the $1M property in Brighton beyond their reach. Happy searching.
Wednesday, November 22, 2006
Certification of Transfers under EC - the 4 tick boxes
Under EC the lawyer / conveyancer will need to tick 4 check boxes certifying
Sample of an EC(Vic) Discharge Mortgage with the 4 tick boxes
In more detail
Certifying compliance with identity verification requirements
This certification will give all other practitioners and the Land Registry confidence that the practitioner has followed the prescribed procedures in verifying the identity of his/her client, including where necessary meeting the client face-to-face, sighting the originals of all identity documents and verifying the authenticity, and retaining all prescribed documentation. It is a certification of having followed a prescribed procedure and may protect the practitioner from a negligence claim if the identity is subsequently proven to be false.
Certifying holding a properly completed Client Authorisation
This certification will give all other practitioners and the Land Registry confidence that the practitioner has entered into a sufficient and properly documented agreement with his/her client to represent their interests in signing and lodging the instrument. The certifications will give all practitioners in the same transaction confidence they can rely on the other practitioners’ having the authority to sign on behalf of their respective clients.
Certifying having examined all necessary supporting documentation
This certification will give all other practitioners and the Land Registry confidence that the practitioner has thoroughly and carefully examined and retained copies for the prescribed period of all documentation necessary to support the instrument. Depending on the circumstances, the supporting documentation might be a probate or death notice, a statutory declaration, a certificate of title, or a marriage certificate, for example.
Certifying correctness to the best of the practitioner’s knowledge
This certification will give all other practitioners and the Land Registry confidence that the practitioner has checked all of the information presented in the instruments and to the best of his/her knowledge believes it to be correct and not misleading.
Source EC NSW newsletter Nov 06
Observation.
Identification. Isn’t it about time that land registries and practitioners address the question and issue of identity. Under current rules there is no requirement to identify our client. We can represent any client, prepare and lodge a transfer without checking their identity. Lets say a client pays cash for a property, no mortgage. This client can use any name or alias. No 100 point check required.
Ditto if a client was to act for him or herself. The Land Registry and State Revenue Office don't require proof of identity. Yet you need 100 point proof of identity to open a simple bank account.
And yet going forward, it is still clear parties can elect to go electronic or stick with the manual paper system. Will 100 point ID be required if you still decide to lodge a Transfer over the counter?
- You have verified the identity of his/her client
- You hold a properly completed and signed authorisation to sign and lodge the instrument on the client’s behalf
- You have thoroughly examined and retained copies of all documentation necessary to support the instrument
- You believe to the best of his/her knowledge at the time that all of the information provided in the instrument is correct.
Sample of an EC(Vic) Discharge Mortgage with the 4 tick boxes
In more detail
Certifying compliance with identity verification requirements
This certification will give all other practitioners and the Land Registry confidence that the practitioner has followed the prescribed procedures in verifying the identity of his/her client, including where necessary meeting the client face-to-face, sighting the originals of all identity documents and verifying the authenticity, and retaining all prescribed documentation. It is a certification of having followed a prescribed procedure and may protect the practitioner from a negligence claim if the identity is subsequently proven to be false.
Certifying holding a properly completed Client Authorisation
This certification will give all other practitioners and the Land Registry confidence that the practitioner has entered into a sufficient and properly documented agreement with his/her client to represent their interests in signing and lodging the instrument. The certifications will give all practitioners in the same transaction confidence they can rely on the other practitioners’ having the authority to sign on behalf of their respective clients.
Certifying having examined all necessary supporting documentation
This certification will give all other practitioners and the Land Registry confidence that the practitioner has thoroughly and carefully examined and retained copies for the prescribed period of all documentation necessary to support the instrument. Depending on the circumstances, the supporting documentation might be a probate or death notice, a statutory declaration, a certificate of title, or a marriage certificate, for example.
Certifying correctness to the best of the practitioner’s knowledge
This certification will give all other practitioners and the Land Registry confidence that the practitioner has checked all of the information presented in the instruments and to the best of his/her knowledge believes it to be correct and not misleading.
Source EC NSW newsletter Nov 06
Observation.
Identification. Isn’t it about time that land registries and practitioners address the question and issue of identity. Under current rules there is no requirement to identify our client. We can represent any client, prepare and lodge a transfer without checking their identity. Lets say a client pays cash for a property, no mortgage. This client can use any name or alias. No 100 point check required.
Ditto if a client was to act for him or herself. The Land Registry and State Revenue Office don't require proof of identity. Yet you need 100 point proof of identity to open a simple bank account.
And yet going forward, it is still clear parties can elect to go electronic or stick with the manual paper system. Will 100 point ID be required if you still decide to lodge a Transfer over the counter?
Saturday, November 18, 2006
Agents push their own expensive barrows
The Business Age published an article that doesn't exactly help them sell more expensive property classified advertisements. Maybe that's why it is in the business section and not the property section.
Mark Armstrong & David Johnston neatly sum up what we already know, buyers use the internet as their first source of property information. And agents convince vendors to part with their hard earned to spend on expensive print advertising to boost the agents own profile.
The article makes a neat summation -
"Ultimately, neither print nor online advertising has more than a marginal influence on the sale price the agent achieves for the vendor. This has far more to do with the quality of the property, the degree of competition among buyers, and the agent's auctioneering or negotiation skills.
Why if such a high proportion of buyers use the internet to research the property market, and the advertising method has virtually no impact on the sale price, do real estate agents continue to recommend the vendors spend thousands on print advertising as a matter of course?
The answer to this apparent relic of a bygone era is simple - branding."
Read the full article
Mark Armstrong & David Johnston neatly sum up what we already know, buyers use the internet as their first source of property information. And agents convince vendors to part with their hard earned to spend on expensive print advertising to boost the agents own profile.
The article makes a neat summation -
"Ultimately, neither print nor online advertising has more than a marginal influence on the sale price the agent achieves for the vendor. This has far more to do with the quality of the property, the degree of competition among buyers, and the agent's auctioneering or negotiation skills.
Why if such a high proportion of buyers use the internet to research the property market, and the advertising method has virtually no impact on the sale price, do real estate agents continue to recommend the vendors spend thousands on print advertising as a matter of course?
The answer to this apparent relic of a bygone era is simple - branding."
Read the full article
Friday, November 17, 2006
AG Phil Ruddock weighs in on eConveyancing
Media Release 207/2006
9 November 2006
E-CONVEYANCING TO STREAMLINE LAND PURCHASES
A national electronic conveyancing system has the potential to simplify land purchases and provide significant consumer benefits, Attorney-General Philip Ruddock said today.
Mr Ruddock said each state and territory had its own conveyancing procedures, with different rules covering issues from the terms and conditions of sale through to the exchange of contracts.
“A national system for electronic conveyancing will streamline settlements for individuals and businesses buying and selling land, including across State borders,” Mr Ruddock said.
Mr Ruddock’s comments followed a briefing from Mr Simon Libbis, the Executive Director of the National Electronic Conveyancing Office to today’s meeting of the Standing Committee of Attorneys-General in Perth.
Mr Libbis outlined recent developments in the establishment of a national electronic conveyancing system and the progress of a pilot program in Victoria.
As an electronically based system, it will operate in real-time and be more efficient than current paper-based processes.
“The lack of uniformity with existing State and Territory conveyancing and real property laws can increase the complexity and costs associated with land transactions, especially where transactions have an interstate element,” Mr Ruddock said.
The establishment of a national system for electronic conveyancing will also complement the initiative to develop a single national register for security interests in property other than land.
The Attorneys-General agreed to continue to monitor this initiative, particularly in relation to its effect on the legal profession.
Media Contact: Michael Pelly Parliament House Phone: 02 6277 7300 Fax: 02 6273 4102
9 November 2006
E-CONVEYANCING TO STREAMLINE LAND PURCHASES
A national electronic conveyancing system has the potential to simplify land purchases and provide significant consumer benefits, Attorney-General Philip Ruddock said today.
Mr Ruddock said each state and territory had its own conveyancing procedures, with different rules covering issues from the terms and conditions of sale through to the exchange of contracts.
“A national system for electronic conveyancing will streamline settlements for individuals and businesses buying and selling land, including across State borders,” Mr Ruddock said.
Mr Ruddock’s comments followed a briefing from Mr Simon Libbis, the Executive Director of the National Electronic Conveyancing Office to today’s meeting of the Standing Committee of Attorneys-General in Perth.
Mr Libbis outlined recent developments in the establishment of a national electronic conveyancing system and the progress of a pilot program in Victoria.
As an electronically based system, it will operate in real-time and be more efficient than current paper-based processes.
“The lack of uniformity with existing State and Territory conveyancing and real property laws can increase the complexity and costs associated with land transactions, especially where transactions have an interstate element,” Mr Ruddock said.
The establishment of a national system for electronic conveyancing will also complement the initiative to develop a single national register for security interests in property other than land.
The Attorneys-General agreed to continue to monitor this initiative, particularly in relation to its effect on the legal profession.
Media Contact: Michael Pelly Parliament House Phone: 02 6277 7300 Fax: 02 6273 4102
Wednesday, November 15, 2006
Best Invention 2006 - YouTube
Time Magazine nominated YouTube best invention of the year.
What happened? YouTube's creators had stumbled onto the intersection of three revolutions.
Its not hard to figure out the common thread for what works on the net. What works on the net is where simple solutions create both community and collaboration. And YouTube has these elements in spades.
What happened? YouTube's creators had stumbled onto the intersection of three revolutions.
- First, the revolution in video production made possible by cheap camcorders and easy-to-use video software.
- Second, the social revolution that pundits and analysts have dubbed Web 2.0. It's exemplified by sites like MySpace, Wikipedia, Flickr and Digg—hybrids that are useful Web tools but also thriving communities where people create and share information together. The more people use them, the better they work, and more people use them all the time—a kind of self-stoking mass collaboration that wouldn't have been possible without the Internet.
- The third revolution is a cultural one. Consumers are impatient with the mainstream media. The idea of a top-down culture, in which talking heads spoon-feed passive spectators ideas about what's happening in the world, is over. People want unfiltered video from Iraq, Lebanon and Darfur—not from journalists who visit there but from soldiers who fight there and people who live and die there.
Its not hard to figure out the common thread for what works on the net. What works on the net is where simple solutions create both community and collaboration. And YouTube has these elements in spades.
Tuesday, November 14, 2006
digital health - digital property
The whole world is turning digital. It is just a matter of time for the circle to turn.
The holy grail is to convert mountains of paper into digital electronic paper. It is so much easier to search and access digital records & archives than to make a request for a paper copy.
Human Services Minister Joe Hockey last week said his department would look at destroying 275km of paper records held by Centrelink and three square kilometres of Medicare records as part of the access card project. That means Centrelink alone would require at least 69TB to store all of its paper-based records. The systems required to undertake such a project would be several thousand digital cameras, printers and scanners. For a copy of the story Australian IT
Property is not a dissimilar story. Conveyancing from end to end is the story of pass the bits of paper around. And kick my butt if you or the client or the bank or the settlement agent or australia post should lose one of those bits of paper. The whole process can be digitised and think how better off we all would be.
And how much paper is consumed in Victoria for property transactions? For residential conveyancing I estimate that we use 52km of paper every year. Across Australia that figure would multiply out to 173km of paper consumed per year. Mmmmmmmmm
The holy grail is to convert mountains of paper into digital electronic paper. It is so much easier to search and access digital records & archives than to make a request for a paper copy.
Human Services Minister Joe Hockey last week said his department would look at destroying 275km of paper records held by Centrelink and three square kilometres of Medicare records as part of the access card project. That means Centrelink alone would require at least 69TB to store all of its paper-based records. The systems required to undertake such a project would be several thousand digital cameras, printers and scanners. For a copy of the story Australian IT
Property is not a dissimilar story. Conveyancing from end to end is the story of pass the bits of paper around. And kick my butt if you or the client or the bank or the settlement agent or australia post should lose one of those bits of paper. The whole process can be digitised and think how better off we all would be.
And how much paper is consumed in Victoria for property transactions? For residential conveyancing I estimate that we use 52km of paper every year. Across Australia that figure would multiply out to 173km of paper consumed per year. Mmmmmmmmm
Sample Electronic Title Search & Instruments
Titles can now be either electronic (eCT) or paper (pCT)
In the latest Titles Office Customer Information Bulletin (October 2006) samples of an electronic title search and Discharge of Mortgage. View samples
Under the EC regime, a title can flip flop between an eCT and a pCT.
An example is given that when a paper instrument is lodged affecting an eCT, if the controlling party of the Certificate of Title after the instrument is registered is not a Subscriber, a pCT will issue.
It is early days, the only current Subscribers are a handful of Financial Institutions during the current Phase 1 testing. FIs potentially are the biggest beneficiaries given the volume of paper titles and securities they must track and hold, which they potentially could convert to eCT.
In the latest Titles Office Customer Information Bulletin (October 2006) samples of an electronic title search and Discharge of Mortgage. View samples
Under the EC regime, a title can flip flop between an eCT and a pCT.
An example is given that when a paper instrument is lodged affecting an eCT, if the controlling party of the Certificate of Title after the instrument is registered is not a Subscriber, a pCT will issue.
It is early days, the only current Subscribers are a handful of Financial Institutions during the current Phase 1 testing. FIs potentially are the biggest beneficiaries given the volume of paper titles and securities they must track and hold, which they potentially could convert to eCT.
Sunday, November 12, 2006
Sell my castle - bidding for a listing
Vendors can bid for an agent's business by providing a description of their home they are about to sell.
The blurb on the Sell my Castle website is "Our goal is to help sellers get the best deal when they sell their property and provide a platform for agents to find prospective sellers".
Agents will bid for the business by quoting their estimated selling price +/- 15% and their commission rates across that range. Thus the agent might quote 2% for the expected selling price, a lower commission if the final price comes in at the lower end and a higher commission if they achieve over the expected selling price.
Agents will also get feedback from buyers and be star rated.
Click here to view their demo
Sell my Castle has been advertising on domain.com.au
The blurb on the Sell my Castle website is "Our goal is to help sellers get the best deal when they sell their property and provide a platform for agents to find prospective sellers".
Agents will bid for the business by quoting their estimated selling price +/- 15% and their commission rates across that range. Thus the agent might quote 2% for the expected selling price, a lower commission if the final price comes in at the lower end and a higher commission if they achieve over the expected selling price.
Agents will also get feedback from buyers and be star rated.
Click here to view their demo
Sell my Castle has been advertising on domain.com.au
Saturday, November 11, 2006
Renters hit by excessive body corporate utility costs
crikey.com.au 11/11/06 Corporate lawyer Adam Schwab writes:
If you thought owners were the only people being rorted by body corporate managers you are wrong – renters are also falling victim to controversial practices being undertaken by body corporates and their managers. Most notably, the dubious practice (by a relatively small number) of body corporates avoiding residential tenancies and gas industry laws to charge renters exorbitant amounts for utilities.
In a recent submission to the Victorian Essential Services Commission, the Tenants Union of Victoria has claimed that certain Victorian building complexes (including several Docklands developments and one development in St Kilda) supply and charge for hot water to individual apartments through a central boiler rather than through individual meters (this is also known as an embedded network). The body corporate effectively purchases the hot water (well, they actually purchase the gas and re-sell the hot water) and proceed to charge renters a significantly inflated price for any "hot water" or electricity purchased. Body corporates are able to charge inflated prices for hot water because only gas prices (not hot water prices) are regulated by the Gas Industry Act.
Further, according to the TUV, the metering systems in these embedded networks are not required to adhere to legal standards existing for normal gas and electricity distributors, raising serious doubts about the accuracy and reliability of billing systems.
As the tenants are required to use the "embedded network" in their building, they have no choice but to pay the massively inflated monopoly rates charged by the body corporate (for example, tenants are not able to change to the supplier of their choice like Origin, TXU or Victoria Electricity to obtain the regulated rate paid by everyone else). Some utility bills are believed to be as high as three or four times the rates charged by utility companies billing tenants directly.
It is also alleged that at the time of entering into leases, tenants are not made fully aware that the utility rates charged by body corporate will be far greater than if the tenant were able to go direct to the retailer.
While the TUV have recently been successful before the Victorian Civil and Administrative Tribunal in having certain charges relating to embedded networks reversed, it is believed that the practice is still continuing – with some tenants being unaware that they are being charged grossly inflated amounts for basic utilities.
If you thought owners were the only people being rorted by body corporate managers you are wrong – renters are also falling victim to controversial practices being undertaken by body corporates and their managers. Most notably, the dubious practice (by a relatively small number) of body corporates avoiding residential tenancies and gas industry laws to charge renters exorbitant amounts for utilities.
In a recent submission to the Victorian Essential Services Commission, the Tenants Union of Victoria has claimed that certain Victorian building complexes (including several Docklands developments and one development in St Kilda) supply and charge for hot water to individual apartments through a central boiler rather than through individual meters (this is also known as an embedded network). The body corporate effectively purchases the hot water (well, they actually purchase the gas and re-sell the hot water) and proceed to charge renters a significantly inflated price for any "hot water" or electricity purchased. Body corporates are able to charge inflated prices for hot water because only gas prices (not hot water prices) are regulated by the Gas Industry Act.
Further, according to the TUV, the metering systems in these embedded networks are not required to adhere to legal standards existing for normal gas and electricity distributors, raising serious doubts about the accuracy and reliability of billing systems.
As the tenants are required to use the "embedded network" in their building, they have no choice but to pay the massively inflated monopoly rates charged by the body corporate (for example, tenants are not able to change to the supplier of their choice like Origin, TXU or Victoria Electricity to obtain the regulated rate paid by everyone else). Some utility bills are believed to be as high as three or four times the rates charged by utility companies billing tenants directly.
It is also alleged that at the time of entering into leases, tenants are not made fully aware that the utility rates charged by body corporate will be far greater than if the tenant were able to go direct to the retailer.
While the TUV have recently been successful before the Victorian Civil and Administrative Tribunal in having certain charges relating to embedded networks reversed, it is believed that the practice is still continuing – with some tenants being unaware that they are being charged grossly inflated amounts for basic utilities.
Friday, November 03, 2006
Why selling online is taking off
Jeni Harvie. The Australian 28 October 2006
“I just sold my house. No big deal really, except that it was done entirely online. The buyer is an Australian living in England who is returning to take up an academic posting in a few months.
She found the house through the internet, she contacted the real estate agent by email, she downloaded the virtual tour, we haggled over the price (via email) and the deal was closed.”
It is the age of ecommerce and it is booming. Australians are logging on and buying up big. And they can almost anything their heart desires, from a magnificent Wallypower motor yacht ($37M) to a bottle of 1951 Penfold Grange ($69,500).
Last year researchers ACNeilsen estimated that Australian online shopping market was worth $7.6 billion and growing at about 40% per year. The survey showed the highest sales were airline tickets, not far behind were DVDs, games and books. The research group Forrester estimates that by 2010, nearly 46% of total travel sales will be booked online, second only to computer hardware/software at 55%.
Lastminute.com.au is riding the wave in the travel industry. Established in 2000, it has doubled its turnover in the past two years. Their general manager says lastminute’s main demographic is 35-45 year old females earning more than $80,000 a year.
“They are not looking for a bargain but want something reasonably priced,” she says. “They want to do something spontaneous and fun. They can log on at night after work and everything is at their fingertips.”
Aggregration trend.
Jeni’s article also highlights the trend that consumers want ease of access to information at one or two sites, thus the popularity of lastminute.com.au and wotif.com.au. The same can be said for real estate, realestate.com.au and domain.com.au dominate the category.
The article continues
Technology analyst Bruce McCabe calls this “aggregation” where consumers have all the information they need at one site, and says the concept has been highly successful in boosting sales.
“Businesses now understand that people don’t like to go to a lot of sites,” he says. “They realize the internet is a very efficient avenue [for selling products]. The real power is having a single place for people to start. In terms of sophistication, Australian consumers and businesses are right up there”
The Lesson for Lawyers and Conveyancers. 247legal provides the consumer and the agent with a single portal for the sales documentation for real estate sales.
“I just sold my house. No big deal really, except that it was done entirely online. The buyer is an Australian living in England who is returning to take up an academic posting in a few months.
She found the house through the internet, she contacted the real estate agent by email, she downloaded the virtual tour, we haggled over the price (via email) and the deal was closed.”
It is the age of ecommerce and it is booming. Australians are logging on and buying up big. And they can almost anything their heart desires, from a magnificent Wallypower motor yacht ($37M) to a bottle of 1951 Penfold Grange ($69,500).
Last year researchers ACNeilsen estimated that Australian online shopping market was worth $7.6 billion and growing at about 40% per year. The survey showed the highest sales were airline tickets, not far behind were DVDs, games and books. The research group Forrester estimates that by 2010, nearly 46% of total travel sales will be booked online, second only to computer hardware/software at 55%.
Lastminute.com.au is riding the wave in the travel industry. Established in 2000, it has doubled its turnover in the past two years. Their general manager says lastminute’s main demographic is 35-45 year old females earning more than $80,000 a year.
“They are not looking for a bargain but want something reasonably priced,” she says. “They want to do something spontaneous and fun. They can log on at night after work and everything is at their fingertips.”
Aggregration trend.
Jeni’s article also highlights the trend that consumers want ease of access to information at one or two sites, thus the popularity of lastminute.com.au and wotif.com.au. The same can be said for real estate, realestate.com.au and domain.com.au dominate the category.
The article continues
Technology analyst Bruce McCabe calls this “aggregation” where consumers have all the information they need at one site, and says the concept has been highly successful in boosting sales.
“Businesses now understand that people don’t like to go to a lot of sites,” he says. “They realize the internet is a very efficient avenue [for selling products]. The real power is having a single place for people to start. In terms of sophistication, Australian consumers and businesses are right up there”
The Lesson for Lawyers and Conveyancers. 247legal provides the consumer and the agent with a single portal for the sales documentation for real estate sales.
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