Why you should always have a mortgage

[sash]

Very true HA...i do this on most properties...I prefer to have a mortgage on them.

It is also a very good form of Asset protection from Ambulance chasers.....they will not know if you mostly own the property or have large debts! Most lawyers won't touch a case where they may not get anything...the other thing is the process of fighting banks to release titles would be painful...so it would be someone with very deep pockets to take you on...

Hi All

Just came across this article and at the bottom there was this

http://www.couriermail.com.au/news/...-good-to-be-true/story-fndo1uez-1226489735283

NSW Fair Trading has issued fraud prevention guidelines to agents to combat the increase in scams following an incident in which a $1 million eastern suburbs unit was almost sold at auction without the overseas owner's knowledge

tEvery so often we get people on here that boast about having paid of their mortgage and one assumes that they have also then followed through and discharged their mortgage.

Doing the latter will suddenly limit the property checks in the legal selling process as there is no mortgage to deal with and I belief that the land titles office is not that thorough.

As a result any property that has no mortgage can be a target for unscrupulous sales action like those mentioned.

Personally we have many properties that have no actual money owing but none the less all of them have a mortgage with the titles held by the bank's. Another form of asset protection.

What is your intention when you reach this stage?

Cheers

 

[cu@thetop]

The mysterious case of the ressurecting zombie mortgage

Great thread with great ideas.

Here in Qld many titles are now paperless so documents can be frauded without the need for production (ie creation of a forged document with watermarks etc) so fraud probably is a lot easier.

When debt collecting I target the real estate and do a dealing search on the mortgage to see if it will tell me how much was advanced so at least I have some idea- but it won't always give an indication of equity.

To me the offset/redraw scenario is the best feature as Lizzy pointed out- the abality to access serious money quickly without the problems of reapplying for finance.

From an asset preservation point of view if you own the property jointly with "her indoors" why not let her caveat your share and consent to the caveat so that it doesn't lapse.

Now kiddies, snuggle up tight and listen to a true tale from the lawyer's crypt:

It was the 80's when a client had paid off his Tasmanian property. He paid it out but didn't remove the mortgage (he said he had directed the big four bank to do so but he had never taken possession of the title or paid them their fee for production of a release of mortgage form).

Client decides to start a business here in Qld in late 80s/early 90s so borrows 80k from the same bank- all along insisting that the Tassie property was not to be used as security-and the banker agreed (can't remember but I think he was using a Qld banker at this stage). First 40k advanced and commercial premises occupied and fit out commenced. Time comes to advance the second 40k. Bank now requires the loan to be secured over the Tassie property. "No!" says client.
"No!" says the bank and does not advance the further funds.
"No!" say the unpaid tradies/subbies who rip the fittings out . Business destroyed before it starts.
Client now has debt to bank (and to tradies too ). Refuses to pay bank.
"Yes!" says bank Johnny who sees this property to an existing mortgage can be used to meet the debt using the "all monies owing" clause contained in every mortgage I've ever bothered to look for it in.
"No!" says client who at this stage is in denial when his property is sold at mortgagee auction.
"Yes!" says the client's former Tassie bank manager as the successful bidder (it may have been his wife- I can't remember) at the auction for the property at 60% market value (according to the client).
"No!" says the bank's credit department when asked if the debt was cleared before commencing bankruptcy proceedings.

"No!" said your humble narrator when asked if he would take the case.


A cautionary tale to all and sundry.

For the asset protection paranoid I just say that no debt arises without notice. The system can be worked if you are prepared to fight the debt so the claim may be delayed or abandoned. In some cases it's not even all that hard.