Solicitors Certificates of Independent Legal Advice
The mortgage lending industry has changed greatly over the last few years.
Essentially, there is an increased reluctance within the big end of town to take on any lending that does not fit the model of a salary earning borrower financing residential property. The credit code imposes a responsibility on lenders to enquire about the capacity of the borrowers to service the loans. Businesses wanting to borrow to purchase real estate sometimes have difficulties demonstrating their servicing capacity.
If the borrowing is for business purposes and uses property owned by other family members to secure the loan, then getting approvals from the big banks can be very difficult.
This has led to an increase in the non-conforming or low doc loan area. These types of loans include all different types of security arrangements other than those that follow the cookie-cutter model preferred by the big banks. Nonconforming and low doc loans concentrate on the securities available if there is a default on the loan. A number of smaller lenders service this area.
With low doc and non-conforming loans, the lenders usually want a solicitor’s certificate signed regarding advice provided to the borrower.
E C Legal will sign Solicitors Certificates of Independent Legal Advice provided we have seen the parties involved and have given advice about the nature and effect of the loan documents.
A recommended form and procedure for use by solicitors and lenders is approved by the Law Institute of Victoria and the Australian Bankers Association (ABA). All ABA members operating in retail banking in Victoria have agreed to accept the form. Some banks and financial institutions currently produce their own form of certificate, but if pressed, will usually accept the LIV ABA form of certificate. E C Legal will use only the LIV ABA form of certificate.
If you have any enquiries regarding a solicitors certificate of independent legal advice, or wish to know more about independent solicitors certificates, please contact Kyle Ogden. We also provide loan document advice and guarantor advice.