The MFAA is drafting a submission to the Victorian government following proposed changes the industry body claims disadvantage the broker channel.
Land Titles Victoria recently released a consultation paper outlining proposed courses of action for the alignment of electronic and paper conveyancing procedures in the state. Other states are expected to follow Victoria’s lead with regard to the changes.
MFAA president Phil Naylor said the industry body’s concern is that the proposals disadvantage lenders which don't have branch networks and who generally rely on brokers to distribute their products.
“This has the potential to have a negative impact on competition and the brokers’ provision of choice to consumers,” he said.
Jon Denovan, partner at Gadens Law, says the firm will be making a submission on the MFAA’s behalf.
The submission will look to ensure brokers are fairly represented in the new e-conveyancing laws, he says. A key area of concern is the introduction of the requirement for verification of identity (VOI).
The MFAA’s work has required that brokers be included in the list of “eligible identifiers”, groups that can officially verify identity in the conveyancing process, says Denovan.
“Brokers now have a very eal role in that relationship thanks to the work the MFAA have done,” says Denovan. The original list of eligible identifiers was limited to conveyancers, lawyers, ADIs and subscribers to an Electronic Lodgment Network.
The key purpose of the consultation paper is to work towards increasing uptake of electronic conveyancing through aligning the requirements for both paper and electronic conveyancing.
“What the government was concerned about was that no one would take up e-conveyancing because of people’s resistance to change, it takes a bit of getting used to and if it was going to be easier just to stick with paper people would stick with paper,” says Denovan.
A key advantage will be that eventually all conveyancing requirements will be aligned nationally, he says.
E-conveyancing will be an important area for brokers to monitor over the coming years, says Denovan, and whether it will be an advantage or disadvantage to the broker channel is yet to be seen.
“Electronic conveyancing has the potential to significantly change the way home lending is done because everything will be able to be done electronically and that can be a threat to brokers because potentially lenders will find it easier to go direct to the customer – or it may just be another way of brokers delivering their services.
“It’ll be a watch this space over the next two to three years. Once people start adopting it people might adopt different business methods and we don’t know whether it will be a plus or minus, but the MFAA’s just making bloody sure that the brokers have got a real role in there.”
Victoria aims to align electronic and paper conveyancing procedures from 1 January 2015. Submissions are due by 1 February 2014.
Key changes outlined in the consultation paper include:
- the phasing out of paper certificates of titles;
- the requirement for VOI – verification of identity of people dealing with land;
- the use of Client Authorisations under which Subscribers (lawyers and conveyancers) sign dealings, on behalf of clients;
- signed mortgages will not be registered– instead a Subscriber or mortgagee certifies that it holds a signed mortgage;
- the introduction of priority notices (or settlement notices) similar to the current system in Queensland and Tasmania which prohibit conflicting dealings pending a settlement; and
- the removal of the requirement for mortgagees to consent to subsequent dealings such as leases and easements – a mortgagee will not be bound by the subsequent dealing unless it has consented.