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

2. NOT JUST A COMPUTER SYSTEM  A 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

3. 3 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 Certification Settlement & Securities Receiving instructions Document Preparation Post Settlement

4. 4 Mortgage Process  Paper documents are produced and via post/courier to borrowers  Associated costs include – paper – postage – file storage – staff handling  Reworks Certification Settlement & Securities Receiving instructions Post Settlement Document Preparation

5. 5 Mortgage Process  Heavy reliance on phone calls to obtain / provide status information  Client specific processes reduce productivity – high staff costs Certification Receiving instructions Document Preparation Post Settlement Settlement & Securities

6. 6 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 Certification Settlement & Securities Receiving instructions Document Preparation Post Settlement

7. 7 Mortgage Process  Variations and Discharges  Process are predominantly manual  Little use of data exchange Certification Settlement & Securities Receiving instructions Document Preparation Post Settlement

8. POTENTIAL SAVINGS 8 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

9. THE CONVEYANCING PROCESS FinancingDisclosureContractSearches Document Preparation Document Signing Document Stamping Document Exchange Financial Settlement LodgmentRegistrationPublication Electronic Conveyancing (NECS) Electronic Lodgment Automatic Registration & Publication 9

10. 10 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 Certification Settlement & Securities Receiving instructions Document Preparation Post Settlement

11. BUSINESS PRACTICES  Client Identity Verification  Client Authorisation  Instrument Certification  Confirmation of Right to Deal (the CT issue)  Supporting Evidence Requirements  Fee Invoicing & Payment Collection 11

12. 12 NECS AND MORTGAGE PROCESSING A Presentation for the Mortgage Processing Summit 2009 By Simon Libbis Executive Director