To me this is cut and dry. The financial advantage is the use of/access to the $250,000, which one is not entitled to. You need to understand that interest being paid on the funds makes no difference. The bank is clearly disadvantaged by being unknowingly placed at risk of potentially losing their capital. This is due to the fact the funds are unsecured. As you mentioned the LVR is 188%! How can you say that the intention is to pay back the loan! when these are funds that the borrower has no right to have and they have not notified the bank of its error. Merely servicing a loan (ie paying interest) in no way shows an intention to pay back the loan.
See response to point 1. Clearly 188% LVR is a financial advantage the borrower is not entitled to.
Under all circumstances (where the error has come to your attention) where not doing so would amount to some type of criminal offence by ommision.
E.g. You are expecting ATO refund for $3000 and ATO fool accidently types an extra zero and deposits $30,000 into your account. At the time the funds are deposited into your account you have not committed an criminal act at all, but once you realise the error and decide not to bring it to the ATO's attention (ie. decide to keep the funds, whether or not you withdraw them) you have comitted theft. Simple.
The law is not generally as complex as some would like us to think. Generally, if some action/behaviour seems wrong there will often be a law to cover it.
I'm not a lawyer but as a Police Officer with 12 years experience in the AFP (last 2 and 1/2 in ACT Prosecutions section, and fraud investigation experince) I have a good practical understanding of both ACT and Commonwealth Legislation.
Cheers
Jase
HI Jase, nice reply and I am now more aware.
However, you wrote
The financial advantage is the use of/access to the $250,000, which one is not entitled to.
This is an assumption and not fact. The author of this thread said it was a mistake , but that is just a guess.We don't know for a fact , why the bank has given this amount, just as we don't know why banks sometimes reject our applications.What if a disgruntled employee approved this. That is not a mistake. My point is we We don't really know
Maybe its a mistake ,probably its a mistake , but we don't know it is a mistake for a fact.
Thus if your premise is wrong then your logic is wrong.
The bank is not disadvantaged as the amount has been approved and all collateral documentation is in their hands.
if you can prove its a mistake then consequeces follow according to your work based experience.
It is not up to an individual to validate company decisions.
one might say with all the resources and checks a Bank has it would be inconceivable that such a large amount of money could be lent by mistake.
I have never heard of this so even if I think its a mistake , I must be wrong. !!
I seriously doubt anyone would go to jail.
How do you know the borrower has no right to have these funds.Do you know the thinking of the approving officer?
Are you aware of famous legal case where a boat advertised for sale, which could do approximately 15knots could in fact only do 5knots.
The court ruled that 5 knots was an acceptable figure and the contract could not be rescinded based on the advertised speed of the boat.
I think the outcome is ridiculous , but what I think is irrelevant.
So I repeat that an LVR of 188% to me is not excessive although unusual. I wonder what a court would think. not even double.
I pretty much believe what you have written , however you are applying
your general knowledge to this specific case using several incorrect assumptions IMHO.
