The private mortgage industry is primarily regulated under the Managed Investments provisions of the Corporations Act 2001.
On 1 July 1998 amendments to the Corporations Law were proclaimed by way of the Managed Investments Legislation. The Financial Services Reform Act 2001 further amended the Corporations Law, now known as the Corporations Act 2001, and was effective from 11 March 2002.
The Corporations Act 2001 is supervised and enforced by the Australian Securities and Investments Commission (ASIC).
Lending for personal purposes or investment property purchase or refinance is also regulated under the National Credit Code.
On 1 July 2010 new Legislation known as the National Consumer Credit Protection Act 2009/ National Credit Code became Law. The principal areas are the regulation of owner occupied lending, residential investment property finance, broker licensing and Responsible Lending practices.
Breaches of the lending requirements may result in the Courts potentially re-opening and examining the terms of the Mortgage advance. It is within the Courts power to vary the terms of the advance if it finds a breach and these remedies can include loss of interest and Principal.
Federal Government Legislation Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is aimed at preventing and detecting money laundering and terrorism financing in line with international standards.
This Legislation imposes a number of obligations on Reporting Entities in the provision designated services such as funds management/ Managed Investment Scheme. These obligations include, among others customer identification & verification of identity (by way of a “100 point” type check using original documents such as current Passports and Drivers Licences) and ongoing customer due diligence and reporting suspicious matters:
Landgate Western Australia has introduced Verification of Identity requirements prior to the registration of certain instruments; predominately Transfers of Land and Mortgages.
All parties signing a Mortgage or other instrument are required to be identified and verified using original documents such as current Passports and Drivers Licences.
Australian Financial Services Licence holders are also required to be members (in addition to their Internal Dispute Resolution procedures) of an External Dispute Resolution Service such as the Financial Ombudsman Service.
The Manager recommends Investors seek appropriate independent financial or legal advice from their accountant, financial adviser or solicitor.