New South Wales Consolidated Regulations

LEGAL PROFESSION REGULATION 2005 - REG 169

169 Default procedures

(1) A mortgagee solicitor must maintain systems to enable the early detection of defaults in the payment of principal or interest secured by a regulated mortgage or under the terms of a regulated mortgage.

(2) A mortgagee solicitor is to ensure that the following steps are taken if a default in the repayment of a loan secured by a regulated mortgage occurs:

(a) the borrower must be contacted within 7 days after the solicitor becomes aware of the default and the reason for the default ascertained,

(b) the borrower must be requested to pay the penalty rate of interest and any such interest is to be paid to the lender or contributor,

(c) the lender or contributor must be advised of the default and the action being taken with respect to the default,

(d) unless the lender or contributor instructs otherwise, action is to be commenced to recover outstanding principal, interest and costs if there is a default in payment of more than 2 months (in the case of interest) or 2 weeks (in the case of principal),

(e) if a default continues for more than 2 months, the solicitor must notify the Law Society Council in writing of the default and the action taken to rectify the default.