1 NECS AND MORTGAGE PROCESSING A Presentation for the Mortgage Processing Summit 2009 By Simon...

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NECS AND MORTGAGE PROCESSING

A Presentation for the Mortgage Processing Summit 2009

By

Simon LibbisExecutive Director

NOT JUST A COMPUTER SYSTEMA business model Roles, relationships and responsibilities

A legal framework Legislation, rules, compliance and discipline

A risk management regime Allocation, mitigation, transfer and compensation

Supporting business practices Verification, authorisation, certification and justification

A software system Integrated, fully-featured, secure and reliable

Governance arrangements Independent, inclusive, sustainable and competent

Industry, community and government confidence 2

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Mortgage Process

Instructions are mostly received via email, post and fax meaning we need to re-key data

Duplicated data entry leads to

additional processing time,

increased cost; and

higher risk of errors

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Mortgage Process

Paper documents are produced and via post/courier to borrowers Associated costs include

– paper– postage – file storage– staff handling

Reworks

Document Preparation

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Mortgage Process

Heavy reliance on phone calls to obtain / provide status information

Client specific processes reduce productivity – high staff costs

Certification

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Mortgage Process

Physical settlements involve

Significant staff cost – weekly/monthly workload fluctuations

Production of manual bank cheques

Cost to maintain CBD settlement location

Manual stamping/lodging

Varying processes in each state

High QA costs and potential for errors

Settlement & Securities

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Mortgage Process

Variations and Discharges

Process are predominantly manual

Little use of data exchange

Post Settlement

POTENTIAL SAVINGS

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Total Number of Home Loans 733,195

Average Cost $ 1,333(including rework)

Total Annual Cost of $ 977,348,935 X 11% savings ratio

Potential Saving $ 107,508,383

THE CONVEYANCING PROCESS

Financing Disclosure Contract SearchesDocument

PreparationDocument

SigningDocument Stamping

Document Exchange

Financial Settlement

Lodgment Registration Publication

Electronic Conveyancing (NECS)

Electronic Lodgment

Automatic Registration & Publication

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Mortgage Process

Physical settlements involve

Significant staff cost – weekly/monthly workload fluctuations

Production of manual bank cheques

Cost to maintain CBD settlement location

Manual stamping/lodging

Varying processes in each state

High QA costs and potential for errors

Settlement & Securities

BUSINESS PRACTICES

Client Identity Verification

Client Authorisation

Instrument Certification

Confirmation of Right to Deal (the CT issue)

Supporting Evidence Requirements

Fee Invoicing & Payment Collection

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NECS AND MORTGAGE PROCESSING

A Presentation for the Mortgage Processing Summit 2009

By

Simon LibbisExecutive Director