NCCP Act 2009: Lenders not permitted to 'call in' loans unless borrower is in default

[Shadow]

What about this?

This is what you said in the very first post of this thread:

Exactly - thank you. I said that the CBA information booklet contains various T&Cs that may apply across a broad range of loans, and I asked to see an actual contract that included those T&Cs. I also asked TF to advise whether every single T&C in the booklet was present in every single loan contract, and that no other clauses (aside from those in the booklet) existed in every loan contract.

I did not, as TF falsely claims... 'argue the ING and CBA TsandCs are not contractual terms'

TF failed to provide a copy of an actual contract, and also failed to respond to the question about whether every single T&C in the booklet was present in every single loan contract (obviously because the answer is 'no'). I have personally viewed actual CBA and Westpac regulated loan contracts, and those clauses did not exist.

 

[Terryw]

Just a bit more on the CBA information booklet posted by TF.

I have attached a few sections below...

First of all, it's an information booklet, not a contract...

Here is another quote from the Shadow

 

[Shadow]

Here is another quote from the Shadow

Yes thanks, we've already covered the fact that the CBA booklet is not a contract.

 

[Terryw]

Yes thanks, we've already covered the fact that the CBA booklet is not a contract.

But is it part of a contract? ie terms and conditions of a contract?

 

[Shadow]

it both forms part of the contractual documents and is legally binding.

No. Even TF now concedes that it would probably be illegal to use such a clause in the manner being discussed in this thread.

 

[Shadow]

But is it part of a contract? ie terms and conditions of a contract?

Some clauses in the booklet might be included in the T&C of an actual loan contract (although nobody has posted such a contract yet, and it hasn't been part of any loan contract that I've ever seen). A clause like that might be used if the property value is reduced through some action by the borrower (for example if they knock down the house).

 

[Terryw]

Parts of the booklet might. Some lenders may choose to put something like that into a loan contract (although nobody has posted such a contract yet, and it hasn't been part of any loan contract that I've ever seen). A clause like that might be used if the property value is reduced through some action by the borrower (for example if they knock down the house).

Please answer this question:

Do you consider terms and conditions of a contract to be part of that contract?

 

[hobo-jo]

A clause like that might be used if the property value is reduced through some action by the borrower (for example if they knock down the house).

Can you cite an example where the clause was used in that way against a borrower or are you just posting your assumptions as fact?

 

[Shadow]

Please answer this question:

Do you consider terms and conditions of a contract to be part of that contract?

The legally binding contract is the document signed by the borrower.

Show me the contract and I'll tell you.

 

[Terryw]

The legally binding contract is the document signed by the borrower.

Show me the contract and I'll tell you.

Skirting around the questions again?

Its a yes or no answer.

 

[Shadow]

Skirting around the questions again?

Its a yes or no answer.

Sorry, when you said 'that' contract, I thought you were referring to the specific scenario and contracts being discussed here, in which case, no, the CBA and Westpac contracts I've seen do not have clauses that could be used in the 'margin call' manner being discussed.

If you're just asking a general question, then yes, terms and conditions of a contract are part of a contract.

 

[Terryw]

Sorry, when you said 'that' contract, I thought you were referring to the specific scenario being discussed.

If you're just asking a general question, then yes, terms and conditions of a contract are part of a contract.

So why do you think that a booklet labelled 'terms and conditions' could not form part of the credit contract for a loan?

 

[Shadow]

So why do you think that a booklet labelled 'terms and conditions' could not form part of the credit contract for a loan?

I don't think that. They could be. Some (maybe all, though I doubt it) clauses in the booklet might (or might not) be included in the T&C of an actual loan contract. However, nobody has posted such a contract yet, and it hasn't been part of any loan contract that I've ever seen.

You can see from this...

...that the T&Cs in the booklet are a 'usual' set of T&Cs, but they may not be a complete set of T&Cs, especially in the case of regulated loans.

 

[Terryw]

I don't think that. They could be. Some (maybe all, though I doubt it) clauses in the booklet might (or might not) be included in the T&C of an actual loan contract. However, nobody has posted such a contract yet, and it hasn't been part of any loan contract that I've ever seen.

You can see from this...

That the T&Cs in the booklet may not be a complete set of T&Cs in the case of regulated loans.

So why is that you consider the CBA booklet referred to above - and the ING - not to be part of the terms and conditions of an actual loan contract?

 

[Shadow]

So why is that you consider the CBA booklet referred to above - and the ING - not to be part of the terms and conditions of an actual loan contract?

I don't consider that. Some clauses in the booklet might be included in the T&C of an actual loan contract. The booklet appears to cover both regulated and unregulated loans, refer to highlighted text in the image above (some clauses might only be applicable to regulated loans). The booklet notes that the T&Cs in the booklet are not a complete set of conditions, and that other T&Cs (not included in the booklet) may apply by law.

 

[Shadow]

You appear to be annoyed because I have rightly pointed out that your CBA information booklet probably covers both regulated and unregulated loans, and therefore not all the clauses in there would be applicable to regulated loans, and that other T&Cs apply by law that are not mentioned in the booklet.

You've also failed to answer all the questions I asked you in this thread, and you failed to provide a link to an actual CBA loan contract.

Back in post 18 (a full week ago) you said...

I will follow up with CBA tomorrow in regards to the T&C I've been using.

What happened? Did their response not suit your argument here? Perhaps CBA gave you the same response they gave Peter Fraser on APF - i.e. that they would not take action against a borrower who kept up with their repayments.

I also note that some people seem to want to turn this discussion into a pedantic argument about the precise wording I used to point out that the T&Cs in the CBA information booklet are not necessarily fully representative of an actual contract, which is a trivial non-issue and a distraction from what this discussion is actually about.

This discussion is about whether lenders can 'margin' call on a borrower simply because the housing market drops. The consensus now appears to be that lenders generally can't just 'default' someone because of a fall in house prices, and that any attempt to use a clause in that manner (creating a default out of general movement in property values) may well be illegal.