Settlement date occurs during my oversea trip

S

smy7484

Hi everyone

I have pre-booked my oversea trip about 9 months ago for 2 weeks holiday from 9th feb to 25 feb 13.
I have signed up a H&L contract last year, awaiting land to be registered. The IP is at QLD. Nine months passed, and the land finally got registered a week before my oversea trip. 14 days settlement triggered, which means the settlement date is falls in between my holiday.

Contract signed, mortgage and valuation completed, I would have thought everything is there just awaiting for settlement. It's 7 days between the date land got registered and my oversea trip, another 7 days between my oversea trip and the settlement date.

So the first 7 days of the settlement period (prior to my departure), I have deposited required money (actually slightly more) to cover the balance of settlement and all costs. I have contacted my solicitor And mortgage broker, asking is there anything required from me for settlement? And confirm my away will not affect the settlement date. Both emailed back said no problem, I am alright to go.

While I am away, the first email received is from my solicitor, one business day prior to settlement date, advising request to delay settlement. The one and only issue is I haven't sign the mortgage documents from the bank. These doc. Posted to my address after my departure.

Now I am forced to extend settlement period (the seller has agreed) but paying 11% interest for approx. 3 weeks.

So I am asking, who should I blame for and get reimbursement:

1. Myself? I should have known this because this is not my first purchase. However I have contacted everyone to make sure no outstanding doc. For settlement prior to my departure.
2. The solicitor?
3. The mortgage broker?
4. The bank?
5. Other?

Lastly, can anyone please advise how to deal with this situation? As I am back to Sydney on this coming Monday.

Secondly, what to do to avoid this problem if settlement date falls on the day I am away.

Thanks
Ryan
 
alexlee said:
A mortgage document is fairly major. Why didn't you realise you hadn't signed it?
Click to expand...

Ya, I am questioning myself on this. However I have also confirmed with the team prior to my departure. Everyone said no problem.

So is that means it is not possible to settle a property if one is away? I have asked the mortgage broker for letter to agree on electronic copy, authorisation letter etc. so I can signed back via email, but they said no.
 
smy7484 said:
Ya, I am questioning myself on this. However I have also confirmed with the team prior to my departure. Everyone said no problem.

So is that means it is not possible to settle a property if one is away? I have asked the mortgage broker for letter to agree on electronic copy, authorisation letter etc. so I can signed back via email, but they said no.
Click to expand...

A mortgage broker usually wouldn't ask the question 'have you signed the mortgage doc yet?'

If you'd told the mortgage broker about your overseas trip dates, and they were switched on, they might have followed up and checked that the doc issued date was prior to your departure. But that's asking a lot of them. It's not like there are that many docs to sign for settlement. You really should have realised you hadn't signed the mortgage docs.
 
smy7484 said:
Hi everyone

I have pre-booked my oversea trip about 9 months ago for 2 weeks holiday from 9th feb to 25 feb 13.
I have signed up a H&L contract last year, awaiting land to be registered. The IP is at QLD. Nine months passed, and the land finally got registered a week before my oversea trip. 14 days settlement triggered, which means the settlement date is falls in between my holiday.

Contract signed, mortgage and valuation completed, I would have thought everything is there just awaiting for settlement. It's 7 days between the date land got registered and my oversea trip, another 7 days between my oversea trip and the settlement date.

So the first 7 days of the settlement period (prior to my departure), I have deposited required money (actually slightly more) to cover the balance of settlement and all costs. I have contacted my solicitor And mortgage broker, asking is there anything required from me for settlement? And confirm my away will not affect the settlement date. Both emailed back said no problem, I am alright to go.

While I am away, the first email received is from my solicitor, one business day prior to settlement date, advising request to delay settlement. The one and only issue is I haven't sign the mortgage documents from the bank. These doc. Posted to my address after my departure.

Now I am forced to extend settlement period (the seller has agreed) but paying 11% interest for approx. 3 weeks.

So I am asking, who should I blame for and get reimbursement:

1. Myself? I should have known this because this is not my first purchase. However I have contacted everyone to make sure no outstanding doc. For settlement prior to my departure.
2. The solicitor?
3. The mortgage broker?
4. The bank?
5. Other?

Lastly, can anyone please advise how to deal with this situation? As I am back to Sydney on this coming Monday.

Secondly, what to do to avoid this problem if settlement date falls on the day I am away.

Thanks
Ryan
Click to expand...

Authorise your solicitor to do everything for you while you are away. I think it's called a power of attorney.
 
I know some banks won't issue mortgage documents until titles are issued - this sounds the case.

I am surprised that any one though this could be done in 14 days! Generally the bank gets the nod titles are issued, then they tell their lawyers that handle settlement to draw up the documents, then they are posted out then you have to sign them (and many require stat decs, witnesses and justice of peaces etc) and post them back and then book settlement for both parties.

I have a 28 days from titles issues to settlement and it's running pretty tight.

I have been out of the country for one settlement and it did go ahead but was delayed at the last minute as I didn't have insurance organised and the bank wanted a certificate of currency before settlement - how can I insure a block of land I enquired - are you mad?!?!?!?
 
Re penalty interest - look at it this way. You were going to pay 5-6% anyway - so the 11% is actually an extra 5% only pa. It's not that bad. I was once 3 weeks late on penalty interest of 14% on $3.5m....it happens.
 
Thanks everyone for your comments. Agreed, no one in the team has the obligation to make sure the mortgage doc is signed without delay, but myself.

I am rely on my team to advise me every bit and pieces, unfortunately it did not happened.

I am back home this Monday to sort everything out. I will keep everyone posted on the final outcome.

Thanks
 
Not signing mortgage documents is a pretty major thing to miss. You must have realised that this wasn't done, but being your first maybe not. But your mortgage broker should have checked if you had advised him you were going away. He at least should have asked if you had signed the mortgage docs...

Power of attorney could have been done, but many lenders will not accept mortgage documents and loan agreements signed by an attorney. The document also has to be drawn up and signed in front of an authorised wtiness so they are not easy to do while overseas.
 
Two things strike me -

11% interest for three weeks is only maybe 5% more than you would have been paying had you settled on time, and only for 21 days. No biggie.

Even if you or your solicitor had realised the mortgage documents were not signed, in my experience, mortgage documents are ALWAYS late, wrong or missing altogether and every purchase we have made there is a panic and scratching about trying to organise the bank to get them issued, then get them changed when they are invariably wrong.

So, it probably wouldn't have mattered anyway.
 
UPDATE:

I arrived back in Sydney on yesterday morning, found a parcel delivery card in my letter box dated 15th Feb (Friday), 4pm (Note the settlement date is due on 18th Feb, Monday).
I have then picked up the documents from Post Office straight away. Study it over-night, complete it and post it back this morning. Thats including to get JP to witness some of the documents. The land is registered on 30th Jan and informed the lender on the same day, however the lender document is dated on 14th Feb, which means the lender leave it to the last day.

Is it common for a lender to issue out mortgage doc. at a day prior to settlement due and expect borrow to sign everything, post it back, book settlement etc. in a day?

The interest charge will not be expensive in this case, but I still like to learn through the process and avoid the same mistake in the future.

Thanks
 
smy7484 said:
Is it common for a lender to issue out mortgage doc. at a day prior to settlement due and expect borrow to sign everything, post it back, book settlement etc. in a day?

The interest charge will not be expensive in this case, but I still like to learn through the process and avoid the same mistake in the future.

Thanks
Click to expand...

It is common for lenders to take a while to prepare mortgage documents. They generally don't take your settlement date into account unless the broker has put in the deal to be escalated. The lender will also want 10 days to process the documents after you sent them back too. You should get this followed up too.
 
smy7484 said:
UPDATE:

I arrived back in Sydney on yesterday morning, found a parcel delivery card in my letter box dated 15th Feb (Friday), 4pm (Note the settlement date is due on 18th Feb, Monday).
I have then picked up the documents from Post Office straight away. Study it over-night, complete it and post it back this morning. Thats including to get JP to witness some of the documents. The land is registered on 30th Jan and informed the lender on the same day, however the lender document is dated on 14th Feb, which means the lender leave it to the last day.

Is it common for a lender to issue out mortgage doc. at a day prior to settlement due and expect borrow to sign everything, post it back, book settlement etc. in a day?

The interest charge will not be expensive in this case, but I still like to learn through the process and avoid the same mistake in the future.

Thanks
Click to expand...

That is why I was surprised with the 14 days nominated - who did nominate that?
Generally 21 days at least would be better because it does take time for them to be drafted (insert customer name, find and replace evidently not learnt by banks)
Once they receive them they also have to verify them which can take a few days then they'll be ready for settlement.
To avoid in future put 21 or 28 days in the contract.
 
Latest Update - Closed Case

Well, what a 180 degree turn-around.

Last week, the vendor has agreed to extend the settlement for 4 weeks with interest charges as per the contract. After several explanation on what happened, the vendor solicitor has faxed through a letter confirmed the extension AND waive the interest charges penalty. So i guess you never know the result if you never ask.

From this experience, I am going to prepare a settlement checklist for my future purchase.
Every purchase gives me a lesson.

Thanks everyone.:)

>>>Case Closed<<<
 
Nice work. Though remember this is the vendor being very generous. They were totally within their rights to charge you the interest.
 
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