18 News
Conveyancing: more work, but also more headaches Key points • more work for law firms following extension of boosted FHOG • lawyers also expecting an upsurge of mortgage fraud • community legal centres expected to receive more requests for help
The Federal Government’s decision to extend the First Home Owner Grant is set to keep brokers busy until at least the end of the year, but it is also expected to increase the workload for law firms involved in the preparation of mortgage documents and contracts. Gadens lawyer and chief operating officer Jon Denovan said currently residential lending valued at less than $1m was more popular than other form of borrowing, including commercial property ($1m to $100m) and corporate (above $100m) loans. “We have observed a 70% increase in front-end mortgage work since the grant was introduced last October. Residential mortgage work for banks and non-bank lenders has brought big business. It’s exciting to see work volumes improve again,” he told Australian Legal Business.
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But the negative spin-off has been an upsurge in mortgage fraud work, according to Julie Barkla, a partner at Melbourne property and mortgage law firm Wisewoulds Lawyers. “The difficult market has made people desperate enough to take advantage of a spouse or their property to raise funds. That was marginal before the downturn, but is happening a lot more. Mortgage enforcement is also a growing area, as more borrowers are defaulting on their mortgages,” she said. Once passed, the National Consumer Protection bill is also likely too bring in a “huge influx” of mortgage work to community legal centres, namely advice to borrowers who entered into financial agreements that they could ill afford. However, few lawyers are willing to work for centres for various reasons. “Some of my community legal centre contacts are dreadfully understaffed and have difficulty in staffing. They work very long hours and get pitiful pay,” said Denovan. In the May Budget, the government extended the boosted First Home Owner Grant allowing first-home owners entering mortgage contracts between 1 July and 30 September to receive $7,000 for existing homes and $14,000 for new dwellings. The boost will be halved for contracts signed between 1 October and 31 December.
Jon Denovan