Banking & Finance

Bransgroves has led the field in acting for lenders on advances, enforcement and priority disputes for over ten years. More recently the firm has become well known for taking the side of mortgage originators and aggregators in their disputes with wholesale funders.

Bransgroves has led the field in acting for lenders on advances, enforcement and priority disputes for over ten years. More recently the firm has become well known for taking the side of mortgage originators and aggregators in their disputes with wholesale funders.

In order to ensure that all our work is proficient, we keep up with the case law. Many lawyers make that claim but very few are in a position to prove it. We prove it by publishing case notes on every single mortgage related decision, including valuation cases, handed down by the High Court, the Federal Court (NSW Registry), the NSW Court of Appeal, and the NSW Supreme Court. Many of our case notes are picked up by the NSW Law Society Journal. These articles, in turn, have been cited with approval by the Courts. All these case notes are written by our partners, Matthew Bransgrove and Kate Cooper. In addition to both having multiple articles published in the NSW Law Society Journal, Matthew has also been published in the Australian Law Journal and has co-authored the text book The Essential Guide to Mortgage Law in NSW. Matthew and Kate have also presented numerous seminars for the benefit of other lawyers through the NSW College of Law.

Mortgage Documentation 

Bransgroves accepts instructions to act on complex and high-value (>$1 million) mortgage advances. Loans involving multiple securities, in multiple states, with multiple guarantors, multiple borrowers, multiple trusts, with multiple beneficiaries, and multiple charges over encumbered companies are par for our course. We are particularly skilled in documenting construction loans. In fact, many of our clients are mortgage funds run by solicitors or ex-solicitors. Despite having the qualifications to act for themselves, they know that when a matter is complex, or high value, it is quicker and safer to use our services.

Bransgroves will happily act as consultants in designing in-house procedures, including precedents and checklists for lenders who issue their own mortgage documents. Bransgroves own and continually develop multiple suites of mortgage documentation, for which we sell perpetual licences and customise to suit our clients’ needs. These documents are based on battle-hardened (court tested) deeds which have been developed and refined over many years.

Mortgage Enforcement 

The test of underwriting skill is in the recovery process. Anyone can lend money out, but the test of diligence is in recovering it undiminished. Mortgage enforcement is one of the primary focuses of our practice. Our daily exposure to this area of law constantly hones our skills and provides us with a knowledge-base for mortgage documentation and advising clients on mortgage due diligence procedures.

Lenders using our services for the first time will find that no fact situation or legal dilemma gives us pause because we have seen it all before and are geared to act quickly and cost effectively. The sheer volume of mortgage enforcement work means that even our junior solicitors have more experience than senior solicitors at other firms. The advantages of this specialisation are not limited to expertise. Typically, we have multiple matters in the possession list; this means that there are significant cost savings as attendance costs can be spread over multiple matters. Our clients also find that interlocutory applications, such as applications for summary judgment, are for the most part dealt with in-house, reducing the need to retain barristers. The familiarity our solicitors have with the quirks and peculiarities of the individual registrars and associate judges ensure that all the documents they require are available and, so, applications are not refused as often happens when advocates and members of the bench are unfamiliar with each others procedures, requirements, and temperament.

Priority Disputes 

Mortgage priorities can be quite treacherous for subsequent and prior lenders. Bransgroves not only have the skills to protect lenders at the documentation stage but can also help structure workable arrangements in otherwise dubious circumstances. Our consultancy work can help lenders develop procedures to recognise priority traps and pitfalls. This extends not only to mortgage priorities but also to fixed and floating charges. Most priority disputes occur when lenders stumble blindly into a situation without recognising that there are priority implications.

Origination Disputes 

The global credit collapse has revealed weaknesses in the underlying business model adopted in securitized lending. The separation of the ownership of the money, from the underwriting decision, by several layers of intermediaries, has proven to be unwise.

Many origination arrangements that were entered into during the halcyon days of the credit boom were poorly drafted and did not reflect the underlying commercial realities of the arrangement. Underwriting guidelines, and agreed procedures, were tacitly ignored by both funders and originators, creating an ambiguous legal situation not easily defined. For the most part, the documents were drafted by funders and so were one-sided in the funders’ favour. Funders are now seeking to enforce the full severity of the origination agreement, including onerous indemnity clauses. However, fortunately originators are not defenceless against this onslaught. In addition to defences arising from Estoppel (not allowing departures tacitly agreed by both sides to be denied by the funder) there is also the new proportionate liability regimes that increasingly come into play.

Our partner Kate Cooper is running several large cases for originators who have had their trail seized by wholesale funders. Our extensive experience in the mortgage industry means that we are familiar with all the issues surrounding these claims. This includes the structure of the relationships between brokers, aggregators, lenders’ mortgage insurers, originator-funders, and lenders. Our extensive experience suing valuers gives us unique insight into the potential proportionate liability of valuers, solicitors, brokers, and borrowers. Our extensive experience running Contracts Review Act defences for lenders gives us unique insight and probity in conducting autopsies on mortgage shortfalls. Our professional indemnity experience against valuers and solicitors acting on mortgage transactions has taught us what to look for in formulating defences and cross-claims.

Claims Against Valuers 

Bransgrove Lawyers have been suing valuers for 10 years. During that time we have developed unrivalled expertise in analysing valuations and correctly assessing the prospects and quantum of success. Not since the High Court’s decision in the Kenny & Good Pty Ltd v MGICA [1999] HCA 25 has there been such a significant change in the law of valuer liability as that created by the new proportionate liability legislation. This legislation, which applies in both the federal and state jurisdictions, limits recovery against valuers to that which represents the proportion attributable to their wrong doing. This involves deducting from the award amounts equal to that portion of the damage caused by concurrent wrongdoers. Where the lender has been induced to loan money on the strength of false details being provided on the loan application as to affordability or employment details, this can significantly impair the lenders ability to recover against the valuer. These issues have been extensively explored by Matthew Bransgrove and Kate Cooper in their NSW College of Law papers Proportionate Liability in claims against Valuers and Proportionate Liability 5 years on.

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