Hi Guys,
Thought I best respond to this thread to set the record straight on a number of points.
#1 The property referred to in the SMH article is registered in my name and it was my first deal.
Michael is not the wrapper for this deal. You may notice the article mentions that Michael controls a company called Dark Thoughts, but it does not link this to the property, they let you, the reader infer such. Michael's only involvement in this matter started a couple of months ago to act as "special administrator" to help my client's realise the seriousness of the matter.
The idea of a special administrator is the same concept many companies use to highlight the seriousness of a situation by boosting the client's awareness by changing the routine. We had hope this would change the situation without the need to take any further steps.
#2 The meeting with my clients was arranged by appointment, at a time and date of their choosing. And it was I who ask if it would be best if the children were not present, a request my clients believe made sense. And there was no threatening involved while the kids were away, we just presented them the facts and figures, which I recommended they take it to their legal advisor.
#3 You may notice that the quote "The xxx wrap agreement says they must give up their small property at xxx, near xxx, if they miss just one repayment - which they did this year after xxx was retrenched from his factory management job and xxx suffered serious illness.", does not specify how many payments were missed, nor the time difference from the first default to the subsequent actions that have occurred thereafter.
Under the Uniform consumer credit code I am required to issue a default notice each time a borrower falls into arrears, which I have complied with - each time (each notice allows for a 30 day period to rectify the default or arrange alternative arrangements). Please refer to CONSUMER CREDIT CODE - SECT 80 (2) (a) and (b) for more info. A link to the section is provided here for reference.
http://www.austlii.edu.au/au/legis/qld/consol_reg/ccc176/s80.html
#4 If you examine the quote "The family is one of tens of thousands who resorted to the risky finance because they were desperate to enter the property market but unable to secure a bank loan." and then check various consumer advocate websites and compare the number of defaults, you may find that the success ratio of wrapping could be considered to be quite high.
#5 I would have to disagree with the quote "Only when they fell behind on repayments did they understand what wrap finance really meant." as their independent legal advisor would have explained this prior to signing the contract.
#6 To Likewow, your quote "I also disagree with Michaels comparison of finance for a car and a house. A family with children don’t live in a car." is an emotional reaction.
If you compare the contracts on a hire purchase agreement and an instalment contract you will find that they are in fact very similar. It does you no credit to argue facts from an emotional viewpoint.
Rather, I would have accepted the comment; "while technically similar, I feel uncomfortable with the fact that a family would lose their home, whereas people do not place as large an emotional attachment to a car" This comment is less sensational, in my view and more sensible.
#7 There are two points I would like to make regarding the quote "Three years ago the xxx found the xxx house and answered an ad by Mr Gruber to arrange the finance deal."
(i) Michael did not create this deal.
(ii) Throughout the term of this contract (length of contract mentioned above) I have been acting under section 66 (2)(a)(b)(c) (Changes on grounds of hardship) to accommodate certain exceptional circumstances using payment schedules issued to me by my clients.
http://www.austlii.edu.au/au/legis/qld/consol_reg/ccc176/s66.html
#8 The quote "According to xxx, Mr Gruber charged them $93,000 but did not disclose that he had paid just $76,000 for the property only weeks before." is not correct.
Michael (a) did not sell the property and (b) the system I use is that the clients select their own property, in this case they found their property at a real estate agency and negotiated the price I purchased the property and (c) not only they knew my purchase, my margins were also clearly stated in the information kit I provided to them upon answering my ad.
#9 Under the privacy act I cannot disclose specific details which limits the amount of information I can disclose.
What I would like to mention is that before I was involve with wrapping there was nothing on the market like LoanAlert that provided all the necessary documents required under the Credit Code. Prior to LoanAlert, statements and notices were done via excel. With LoanAlert, compliance with the code is more automated and stress free.
Well if other people can plug books they write in articles, why not my own promotion?
#10 Finally, I think it is important that we all understand that (a) under the consumer credit code the formal process of default takes a considerable amount of time to process. Especially when you factor provisions for alternative payment arrangements, this time period can be stretched. It was my expectation that a plan that would have fixed up the arrears would have been drafted, agreed to and implemented before Christmas.
(b) Something else we must consider is that as a society were are bound by the law, the agreements we make and the words we give. If all these are adhered to then incidents such as the one we are discussing here would not occur. While I am bound by the Code to issue notices and statements, provide allowances for hardship and accept alternative payment arrangements, those who seek my services are equally bound to code of conduct as it relates to business and financial matters.
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