Three more banks could face investor concern over flawed mortgage outsourcing deals with Perpetual Ltd that give rise to confusion over who has the legal authority to complete the transactions.
An analyst says that Perpetual could lose as much as 10 per cent of its revenue if all three banks, National Australia Bank, AMP Bank Ltd and Bendigo and Adelaide Bank - in addition to ANZ Banking Group Ltd - drop their business with the fund manager over the flawed contracts.
Perpetual on Monday confirmed that National Australia Bank's (NAB) HomeSide mortgage lending unit, AMP Bank and Bendigo and Adelaide Bank outsourced the processing of mortgage applications to its mortgage services business.
Credit Suisse analyst Arjan Van Veen said in the unlikely event the banks broke their outsourcing contracts with Perpetual over the issue, Perpetual's total revenue would drop by 10 per cent.
Perpetual spokesman Michael Woods on Monday confirmed to AAP that HomeSide, AMP Bank and Bendigo and Adelaide had business relationships regarding mortgage services with each of the three lenders.
Mr Woods said Perpetual has been in talks with all four banks over claims made by the Australian Institute of Conveyancers (AIC) that Perpetual's staff are not legally qualified to act for banks for the purpose of completing mortgage settlements.
"To the limited extent, these services in terms of what we're providing to the ANZ that involve legal work of any kind, it is carried out by appropriately qualified Australian legal practitioners," he said in an interview on Monday.
Mr Woods was responding to concerns voiced by the AIC president Pauline Barrow that the outsourcing deals had caused confusion among property lawyers and conveyancers over whether banks or third-party administrators like Perpetual have legal authority to complete mortgage settlements.
"If they're acting for the ANZ then we need to know under what authority do they act," Ms Barrow told AAP.
"Is it an agency, or (do) they act under Power of Attorney? Where does the risk lie?
We don't know how that role is being performed."
"Whilst we're dealing directly with ANZ, then the risk remains with ANZ. But whilst we're dealing with a third party we have to question whether or not they have the ability to undertake the work they're doing because they're in a settlement process."
Ms Barrow said HomeSide, AMP Bank and Bendigo and Adelaide Bank had outsourced mortgage processing to Perpetual while other banks had outsourced the back office function to SAI Global's Espreon settlement services and brokerage unit.
"(They) have expanded the work they undertake to include legal work, (but) we're not sure whether or not they're working outside any acts or legislation."
Commonwealth Bank and Westpac Banking Corporation process mortgage settlements in-house, she said.
Ms Barrow said the banks involved in the dispute had not formerly consulted the AIC on the processing changes and were not following chain of title, which caused significant delays in mortgage settlements through faulty documentation.
NAB spokeswoman Gillian Griffiths declined to comment on the matter, while AMP Bank's Amanda Wallace confirmed it outsourced new mortgage preparation and settlements to Perpetual and was happy with its service.
"Like any outsourcing deal, we have service standards in place that we continually monitor and we're happy with the level of service Perpetual is delivering," she said.
"We're not seeing any issues."
Bendigo and Adelaide Bank and SAI Global did not respond to calls.
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