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The buyer who paid $1,000 also assumed a $460 k mortgage on the property. Apparently the "assumed" value is quite high for that area although the home looks substantial. Anyone know?
http://m.dailytelegraph.com.au/news/banks-dastardly-act/story-e6freuy9-1226268653429COMMONWEALTH Bank-owned Bankwest has been branded "heartless" by angry customers facing financial ruin after the bank slashed their property prices and began calling in loans.
In a wide-sweeping audit called Project Magellan, the bank has drastically revalued the loans of more than a 1000 commercial clients -- some by as much as 75 per cent.
The Sunday Telegraph has seen documents showing some properties have been sold for a fraction of their value.
Bankwest sold a 2ha Mount Ku-ring-gai property for $635,000 in October despite a valuation by Alcorn Lupton & Associates valuing it at $3.5 million. It also devalued Ken Winton's nine-unit development in Nambucca Heads by 43 per cent and called in the loan even though he had never missed a payment.
Other peoples opinion about me is irrelevant. I think you should know by now that I couldn't care less what other people say about me. You should also know that I like to get to the bottom of things. My questions here seem to be bothering you, as you keep evading the hard questions, and failing to provide any hard evidence to back up your claims, instead resorting to personal abuse, deliberate misspelling of my name, vain attempts at belittlement, calling me 'silly' etc. Your usual childishness. A bit like your efforts on APF, where more than 50% of your posts as 'Yossarian' have been unprovoked personal attacks on me.
Are you saying that every single clause in the CBA booklet is in every single CBA contract, and that no other clauses (apart from those in the booklet) exist in any CBA contract?
So show me an actual contract with those T&Cs in it. I have looked at various mortgage contracts and not seen those T&Cs included. Even if the T&C was included, I believe it would be there to cover events such as the borrower damaging the house or triggering a revaluation in some other way.
I don't believe the bank could use such a clause to revalue the house and declare a borrower had defaulted just because (through no fault of the borrower) house prices happened to fall.
I'm not a legal expert of course, but this just seems logical to me. I know that legally, a default is a failure to fulfill an obligation or duty.
Let me ask you the question that everyone keeps avoiding...
Do you believe it would be 'unreasonably difficult' for a borrower to fulfill an obligation to prevent house prices from falling?
Have you (or anyone else) ever dealt with a case where a bank took action against a borrower simply because house prices fell? If the answer is 'no', then you have just as much legislative experience in this area as me. Also, if the answer is 'no', it shows that even if that clause is in a contract, it has no teeth, as the lender has clearly never been able to enforce it in the manner being discussed here.
Any chance you could post an actual mortgage contract with a clause that allows the lender to take action simply because house prices fell?
If you don't have one, just say so...
That has already been established - we've covered it in great detail across 18 pages on APF. But that's not what we're discussing here. We know it's not going to happen. The question is whether lenders by law have the right to use a clause in that manner - i.e. are they legally permitted to take action against a borrower simply because through no fault of the borrower, house prices happened to fall. What they put in their T&Cs is one thing, but the question is whether they can legally enforce a clause in that manner. The fact that it has never been done (under a regulated mortgage) would suggest no, they can't enforce a clause in that manner, even it it exists.
Stop making things up!
The actual wording is
This is from cl 76 of Schedule 1 NCCP.
So show me an actual contract with those T&Cs in it.
Did either of them refer to secondary information which also governs the loan?Because of this thread I spent a lot of time reading and re-reading my existing contracts and a new one I am about to sign but couldn't find anything.
Did either of them refer to secondary information which also governs the loan?
e.g. My old mortgage contract (5 years ago) doesn't have a clause like the ING or CBA T&C booklets, but does have a section I had to sign which said I have read and agreed with the terms and conditions booklet which accompanied the contract (no longer have the booklet to check for details)...
This and the APF thread really are definitive of your issues Shad
You've gone from vehementy stating a fall in value would not constitute a default on the loan to now, it would appear, accepting it does exist but that it can't be enforced.
So, before I move on, do you agree that lenders can and do impose contractual obligations on regulated residential borrowers that would require them to take remedial action in the event the security value drops to a level unaccaptabe to that lender?
From the local papers in Qld, there is going to be over 5 auctions like the 1k one over the next few weeks,i have been along before and watchedThe buyer who paid $1,000 also assumed a $460 k mortgage on the property. Apparently the "assumed" value is quite high for that area although the home looks substantial. Anyone know?
Shadow
Did you see the ING terms and conditions above?
Shadow
Did you see the ING terms and conditions above?
Seems a matter of semantics, the way I understand it, the banks can't sell you home, just because of the negative equity, but can if you don't do something about it, ie stump up!, so basically they can act if you fall into negative equity.
As it infact can apply to loans such as a line of credit or interest only.Just clearing up a bear myth here for once and for all. Banks can't 'margin call', or repossess, or force the sale of a residential property unless the borrower has defaulted on repayments and subsequently failed to comply with a request to remedy that default.
I saw the ING document. It wasn't actually a contract - so I didn't pay much attention to it past the first page where it describes itself as T&C 'booklet', and where it notes that... 'These Terms and Conditions do not contain all of the information that we are required to give you before you enter into the contract.'
Anyway, regardless of what clauses ING decide to put in their actual contract, the question is whether those clauses are enforceable in the manner being discussed here. The response from Treasury proves they would generally not enforceable in the manner being discussed...
We are not aware of any normal ‘principal and interest’ home loans where the lender has the right to sell a property simply because property values fall. However, a provision of this type, if included, could infringe the unfair contracts terms legislation in the Australian Consumer Law.
So your original statement on APF was not correct on all accounts
I would suggest the vast majority of investment property loans are infact interest only or lines of credit.1. It is not legally possible on normal P&I residential home loans, including investment property loans (i.e. the vast majority of mortgages)