ANZ under fire over mortgage settlements

This story was published: 5 years ago March 10, 2010 8:57AM ANZ is under fire over the way some of its mortgage settlements are being processed / File Source: Bloomberg VICTORIAN property lawyers are demanding an urgent overhaul of ANZ's mortgage procedures following the bank's recent move to outsource home loan settlement functions to Perpetual. In a damning letter sent to the bank last month, the Law Institute of Victoria's acting president Caroline Counsel highlights deficiencies in ANZ mortgage processes which she claims have "substantially undermined" the certainty of property sales. The bank has since apologised to the LIV. In the February 4 letter leaked to Herald Sun, Ms Counsel states that ANZ and Perpetual have committed only limited resources to booking property settlements which has led to confusion and frustration for conveyancing lawyers and their clients. "Law Institute of Victoria members have reported that there have been instances when the Perpetual representative has not attended settlement at the allocated time," Ms Counsel told ANZ in the letter. "Settlement in such cases has, of course, not occurred at the allocated time, and this has necessitated the inconvenience of re-booking settlement." ANZ outsourced settlement responsibilities to Perpetual Mortgage Services last year as part of a wider effort to bring its mortgage administration and settlement systems in line with industry standards. However, the move has been disastrous with communication problems between the bank and Perpetual leading to delays for home buyers and sellers completing transactions. The institute's list of complaints include: SALE failures caused by Perpetual not meeting settlement deadlines. "UNDULY long" waiting times for lawyers seeking information over the phone from the bank and Perpetual. FAILURE by Perpetual to provide details of payments due by property buyers within 48 hours of agreed settlement dates. Ms Counsel told the bank that Perpetual's inability to provide payout numbers before settlement days meant that settlements had to be postponed in many cases because there was not enough time for cheques to be drawn by purchasers. "When settlements fail as a result of ANZ's processes, there are additional financial and emotional burdens imposed on parties," Ms Counsel told the bank in the letter. "The LIV urges ANZ to address settlement process issues, as they substantially undermine the certainty of transactions for parties." In a replying letter sent on February 24, ANZ's head of mortgages, Michael Bock, acknowledged that the deficient settlement procedures had caused inconvenience for solicitors and parties involved in property transactions. "It is clear from feedback from the profession that the changes we introduced to our settlements process have caused frustration and, in certain circumstances, significant inconvenience for some solicitors, conveyancers and clients -- and we sincerely apologise," Mr Bock told the LIV. "We are working hard to fix these problems . . . We understand your concerns, and ANZ is committed to making the necessary changes to ensure we meet your needs and clients' expectations for timely and efficient settlement of all purchases and discharges." Mr Bock stated that ANZ had established a special team of senior executives to drive improvements to the group's mortgage processes. The urgent change program will try to simplify settlement procedures by increasing phone contact staff and investment in new technology. LIV chief executive Michael Brett-Young said conveyancing solicitors also experienced settlement issues with other banks but the problems were more profound at ANZ. "We've had more complaints from our conveyancing solicitors about ANZ and we are confident that the other banks are meeting requirements to achieve timely and smooth settlements for clients," he said yesterday. A Perpetual spokesman declined to comment on the LIV's concerns about its performance under the outsourcing deal with ANZ. ------------------------------------ Reason Posted at 4:02 PM March 12, 2010 Perpetual has set out to ruthlessly undercut all other mortgage services/settlement providers. Banks see the low service charges in a tender and think that's all that matters. Banks need to realise that there is more to outsourcing these services than price. Reading these comments, it's not Perpetual's brand that is damaged, it is the bank's (ANZ in this case). Perpetual has the market presence and the financial backing but it does not have the service and it simply does not care. Comment 1 of 29 meg Posted at 10:07 PM March 11, 2010 I am a settlement runner in Qld i.e. I perform the actual settlement for a small independent business. Perpetual have, and always have been the most ‘can do’ outsourcing agency I have dealt with. They bend over backwards to make sure that settlement occurs + they are the only place that gives us settlement runners a water bubbler and access to a bathroom. I agree that there have been annoying issues with ANZ outsourcing but from my work aspect Perpetual have responded pretty well, or at least they did in QLD. Comment 2 of 29 Pat of australia Posted at 5:13 PM March 11, 2010 Sold an investment property recently - what a disaster - one problem after another - settlement date moved, ANZ could not give a pay-out figure after several attempts. Final figure was way out and I had to wait to get the money and pay out the loan manually at my local bank. My daughter purchased her first house recently and what a mess that was also and very distressing. Comment 3 of 29 Which bank? Switch bank... of Oztralia Posted at 7:09 AM March 11, 2010 If settlement is delayed through no fault of the vendor or purchaser, why are they penalised when the bank fails to process the papers on time? Suggestion to banks: Offer a real service with a guarantee - we pay if we stuff up. Comment 4 of 29 ANZ Stupid World of Melbourne Posted at 1:13 AM March 11, 2010 im a mortgage broker. Since anz had higher rate, my client refinance. NAB refinanced it and passed the cheque to ANZ and took the title. ANZ Perpetual didn't bank in the cheque and lost the chq and ANZ keep charging my customer. ANZ is an idiot. My customer told them to check and they say they still got the title when customer do title search it reveals NAB have title. ANZ is idiot. My client had to pay interest for 2 mth and only got interest charges stop after it threaten ANZ with legal action and until now ANZ still hasn't sorten out the interest back charges yet. ANZ with Perpetual. Both of them are perpetually stupid and I really dont know which World ANZ is living on. so much for their Campaign "We Live in Your World". NO ANZ We dont live in your World. Your World is a Stupid world and mine isn't. Comment 5 of 29 Burnt out of Sydney Posted at 12:19 AM March 11, 2010 A true example to show how greedy can a bank get too, what is in store with the other major 3 banks. It is high time Government start to look at the way the things are conducted and start to set tougher compliance requirements and make the banks pay for the banks mistake. Comment 6 of 29 Madasacow of melbourne Posted at 8:04 PM March 10, 2010 I would never mortgage with the ANZ ever again, they lost our Mortgage paperwork 3 times (YES 3 TIMES) and one of them was signed in the bank in front of the bank manager.... Comment 7 of 29 balwinder of UK Posted at 7:34 PM March 10, 2010 anz is hopeless, i sold my property 3 monhs ago, the settlement is sill not done.... Comment 8 of 29 KW Posted at 7:24 PM March 10, 2010 Andy (comment 4 ) - 2 weeks to get a loan approved???? I wish they had taken that long when I applied for a loan. ANZ took TWELVE WEEKS to the day, to process a simple home loan application for me late last year. Fortunately, CBA approved the same application for the same property in less than 48hrs. No prizes for guessing who we do our banking with now. Comment 9 of 29 Andre of Dianella Posted at 6:13 PM March 10, 2010 Did settlement through a small local firm in Bullcreek, WA. Maintained contact with em - they were cheap, fast and friendly. They called every 2 days for a 2 minute update, and to let me know if anything was needed or if problems existed. Smooth as silk the whole time. I'm selling a house now, and guess which setttlement agent I will contact again...? Comment 10 of 29 CA Posted at 6:09 PM March 10, 2010 In years past Bank Staff handled settlements themselves without any problems .They dealt with Solicitors who in many cases they knew personally and any problems were sorted out promptly and face to face . The problems we now see is a direct result of Banks cutting costs by sacking staff and outsourcing these matters to organisations who don't have the Banks or their customers interest at heart .They simply want the income for doing settlements and have no desire or authority to make compromises in order the get the settlement completed where possible. It is time the Banks woke up and employed their own staff to attend to these important matters . Comment 11 of 29 Licensed Conveyancing Agent of Darwin NT Posted at 5:28 PM March 10, 2010 from our persepective - trying to book in a settlement with ANZ / Perpetual whether discharge or new loan is near on impossible. We have spent numerous hours on the phone with Perpetual waiting to be answered only to be told it isnt ready to book or they are waiting on instructions from ANZ Bank. In the NT we have to provide a Settlement Statement 3 working days before settlement... impossible!!! It is not nice having to explain to clients that their settlement is delayed for weeks due to the Bank not being ready to book. Initial client response is "why"? The only response we can provide is .. incompetence on behalf of your Bank...feel free to call and make a complaint because we have...although you might be told that the message mailbox is full... or that you should leave a message and they will call you back (which NEVER happens)... or like our counterpart you could just have perpetual hang up in your ear after three hours on hold... To conclude - please be nice to your Conveyancer, we tend to endure the backlash in these kind of circumstances o x Comment 12 of 29 annoyed Posted at 5:09 PM March 10, 2010 I work in the home lending industry & the problem is that the banks pay so little to the firms they outsource settlements to that they can't afford to hire enough staff so they can give the level of service that customers expect. The old saying goes "if you pay peanuts - you get monkeys". Comment 13 of 29 bank critic Posted at 4:06 PM March 10, 2010 I settled with CBA earlier last year and had similar problems. The issues with ANZ first appreared to me late last year also when my girlfriend tried to settle a property but was 3 months late. At the end of the day the big 4 banks have to much power and can dictate to the market, this dictation has only got worse with the favourable treatement they received from the governments stimulus package.... time to wind it back if you want them to pick up their performance Comment 14 of 29 matt of sydney Posted at 2:49 PM March 10, 2010 i've been involved in banking for 20 years and home lending settlements for about 15 of those years. when i started in the industry it was considered a sin to miss a scheduled settlement date and cause a client disadvantage. it seems to be the norm nowadays with settlement dates regularly missed due to administrative complexities. so much for the promise outsourcing would make the world a better place. all it seems to do is blur where accountability and responsibility lies. Comment 15 of 29 stressedout Posted at 2:10 PM March 10, 2010 If settlement seems bad you should see what we staff have to go through to get to the booking stage. There is no accountability within the bank and constant viewing of our frustrations fall on deaf ears. No one seems to know what is going on and one party always blames the other for settlements not being booked. Thanks goodness that LIV can see something going on and are shining light on the situation!! Comment 16 of 29 Jane Terry of North Perth Posted at 1:57 PM March 10, 2010 This is the first time I have purchased a property in Australia and I never experience such appalling delays or service back in the UK. It is one thing to pay penalties due to someone else's incompetence but the complete lack of feedback or even having the decency to return calls/emails is just unbelievable...as is our experience with our local ANZ outsourced moible lender in North Perth. If I treated my customers like this I wouldnt still be in business and yet banks....well they just continue to get away with it....afterall no skin off their nose at the end ...they still get our business :-( Jane Comment 17 of 29 Robbie of Sydney Posted at 1:30 PM March 10, 2010 I have been asked to leave as the state offices processing mortgages have closed in NSW except a hand ful staff left to bear the abuse of the result. I have been with the bank for a good time and no doubt the staff were very competent and efficient. But all is lost now. NSW think twice before getting the loan settled with ANZ as there is a 100% chance of the settlement to not happen on time. May be things will get better in a year from now. So who wants to be a scapegoat. Sure others banks may also mess up , there is a chance, but here it is certain. Have a good time with the banker of the year. Our money they mess it up and we pay. Happy banking. Comment 18 of 29 HelloKitty of Melbourne Posted at 1:28 PM March 10, 2010 Bring back Gaye & Cherrie! Dealing with Perpetual on a day to day basis has become a huge nightmare!! Comment 19 of 29 Tony Donaghy of North Perth Posted at 12:59 PM March 10, 2010 I am currently renting the property I wish to buy from the vendors at $500 per week ON TOP OF THE AGREED PURCHASE PRICE due to the complete inability of ANZ to complete the financial settlement after 3 weeks since the signing of final documents. I had to threaten legal action before I even got a return email message from the ANZ manager handling the transaction. As for their mobile lending sub-contractor...... not a word once he got his contract signed and commission secured. I am looking at paying penalty rates on the purchase of approximately $200 a day. Home Lender of the Year My Ar$e. And of course, the extra money comes out of my pocket, not theirs. Comment 20 of 29 unemployed of Brisbane Posted at 12:51 PM March 10, 2010 ANZ has alot to answer for. There will be no other state head offices left in OZ by the end of the year except Melbourne. All document preparation is being done in India ... yes India. The settlement issue also wont go away because ANZ pushed the complete transfer of ALL settlements on Perpetual before they were even ready or able to do them. Comment 21 of 29 Russel of Sydney Posted at 12:43 PM March 10, 2010 The banks should be asked to shoulder additional expenses should the settlement been delayed or failed as a result. They need to be responsible about the services they provide - we the customers deserve more as they are getting heaps of profits from us. Comment 22 of 29 Venkat of Melbourne Posted at 12:03 PM March 10, 2010 Gosh this is just a tip of the iceberg with the mortgage matters. Ask the staff who work with ANZ or who have been made redundant due to this foolish decisions made by few so called senior management staff. This move by ANZ is a disaster in waiting. Comment 23 of 29 Chris Bates of Canberra Posted at 11:38 AM March 10, 2010 Our property settlement (sale) was meant to occur on Friday 15 Jan. ANZ had been made aware of this in December. For the first time in my life, I had rung a complaints line. The lady who took the case on at one stage told me the documents were in Canberra with Perpetual (bearing in mind that Perpetual don't have an office in Canberra)...After working in mortgage lending for ANZ in the late 1990's to early 2001, I found this jsut awful. To compound matters, nobody knew what was going on and ANZ failed to settle. Adding insult to injury, they then charged us interest until THEY got to settlement 4 days later - yep, even missed Monday! No apology and no concept of customer service when all that needed to be done was a single piece of paper instructing the settlement and what was needed. Needless to say, ANZ have since lost more than 95% of our business AND the $570k mortgage that was to replace the sold property. All it would have taken was the $200 interest to have been refunded AND a letter of apology. Now though, I will bleat to whomever will listen to never touch them until they give some g'tee that they will settle when required. Comment 24 of 29 DAVID of Brisbane Posted at 10:19 AM March 10, 2010 Oh My God you think ANZ has problems. I could write a book on what the commonwealth Bank has done in the past six months. They are the worst not ANZ. Comment 25 of 29 Andy Posted at 10:12 AM March 10, 2010 I applied for a home loan with ANZ in Brisbane and it took then over 2 weeks to get back to me with a yes or no.... in the mean time I lost the property I was after.... Thanks ANZ! Comment 26 of 29 Muppets work for Perpetual Posted at 10:03 AM March 10, 2010 Perpetual was the reason we almost had our settlement fail in Qld. ING uses them also and the whole settlement process was a shambles and an absolute nightmare. Perpetual is beyond useless... Comment 27 of 29 Patrick Posted at 9:49 AM March 10, 2010 This is a typical case to show that sub-contracting does not work out for every business specially when there is a requirement to meet restricted deadline. ANZ should review how much they could save by subcontracting vs penalty or compensation paid to clients due to their faults. Comment 28 of 29 dave Posted at 9:23 AM March 10, 2010 This is no surprise. When we bought our current property the vendors were with ANZ and we had to have settlement re-booked on no less than 4 occasions due to ANZ not being ready. As usual, they also didn't compensate us for the additional legal expenses we incurred.