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#841 | |||
Guest
Join Date: Aug 2018
Posts: 1,892
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Quote:
Provide the payments are up to date, I reckon you'd be right... The last thing a bank wants to do is Write Money Off.. However, If you get behind...... ![]() |
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#842 | ||
Regular Member
Join Date: Aug 2008
Posts: 2,858
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You’re right, hayseed. A mortgage is different to a margin loan. The bank will not demand extra cash if the value of a property falls below the loan amount. As long as the borrower is meeting their repayments there would be no issue.
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#843 | |||
Oppressive patriarch
![]() Join Date: Aug 2016
Location: Brisbane
Posts: 733
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Quote:
So if a house in negative equity is sold for less than the amount owing, the borrower will go after the former owner for the difference. Many times the only option is bankruptcy. Ie extreme example - https://australianpropertyforum.com/...-t-t17044.html But to reiterate...the average suburban dweller just needs to communicate with the lender and stay current with their payment obligations. The major banks do not want to become mass landlords. Doing so would crystallize their losses by marking the debts to market, drive up their (already rising) funding costs and expose their Inherent insolvency. But that's another story.
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. Lamenting lost Australian manufacturing. Last edited by anobserver; 05-01-2019 at 03:27 PM. Reason: Spelling |
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#844 | |||
Regular Member
Join Date: Aug 2008
Posts: 2,858
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Quote:
http://www.lawright.org.au/_dbase_upl/Repossession.pdf You may be confusing mortgages with secured margin loans on investments. The lender can ask for the borrower to stump up more money if the LVR on their securities falls below a certain threshold.
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#845 | ||
Peter Car
Join Date: Dec 2004
Location: geelong
Posts: 23,145
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Banks don’t want to be repossessing houses of paying customers. They are still making money off them.
Different story if they are falling behind in payments. But that would also apply if the house was worth much more than what is owed. |
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#846 | ||
Regular Member
Join Date: Aug 2008
Posts: 2,858
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Just to be clear, banks, or other lenders, cannot repossess and sell houses when the borrower is fulfilling their obligations by regularly repaying their loan. It is against the law set out in the Consumer Credit Protection Act (2009) and there are penalties for breaches.
Here is an extract: Division 2—Enforcement of credit contracts, mortgages and guarantees 88 Requirements to be met before credit provider can enforce credit contract or mortgage against defaulting debtor or mortgagor Enforcement of credit contract (1) A credit provider must not begin enforcement proceedings against a debtor in relation to a credit contract unless: (a) the debtor is in default under the credit contract; and (b) the credit provider has given the debtor, and any guarantor, a default notice, complying with this section, allowing the debtor a period of at least 30 days from the date of the notice to remedy the default; and (c) the default has not been remedied within that period; and (d) if the credit contract is for a reverse mortgage, the credit provider has spoken to one of the following persons by telephone or in person in that period and has thus both confirmed that the debtor received the default notice and informed the person of the consequences of failure to remedy the default, or has made reasonable efforts to do so: (i) the debtor; (ii) a practising lawyer representing the debtor; (iii) a person with a power of attorney relating to the debtor’s financial affairs. You can read the whole act here: https://www.legislation.gov.au/Details/C2018C00302
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#847 | ||
FF.Com.Au Hardcore
Join Date: Apr 2005
Location: Canberra
Posts: 13,374
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I would bet that a lot of people are paying LMI but that only comes into play when you default anyway.
I just don't understand why you would even bother (if legal anyway) when someone is meeting their contractual obligations, it makes no sense. Funny how it is, I was more worried about mortgages before I had one than when I actually got one ![]() My LVR is less than 80% which means no LMI and a better rate so there is some risk I would be up for any shortfall should the worse happen. Considering houses would have to plummet in value and I would have to default for that to be a issue, I'm not concerned about it much. |
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#848 | |||
Oppressive patriarch
![]() Join Date: Aug 2016
Location: Brisbane
Posts: 733
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Quote:
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. Lamenting lost Australian manufacturing. |
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#849 | |||
Oppressive patriarch
![]() Join Date: Aug 2016
Location: Brisbane
Posts: 733
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[/QUOTE]
Quote:
Though i think you meant LESS than what is owed....?
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. Lamenting lost Australian manufacturing. |
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#850 | ||
Ford screwed the Falcon
Join Date: Sep 2013
Posts: 7,061
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Regardless of which side of the argument you support, it is clear by the significant increase in attention this subject is receiving that something big is brewing.
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Falcon: 1960 - 2016 My cars Current ride 2016 FG X XR6 - 6 speed manual Previous rides 2009 FG XR6 - 6 speed auto 2006 BF MkII XT ESP - 6 speed auto 2003 BA XT V8 - 5 speed manual 1999 AU Forte - 5 speed manual 1997 EL Fairmont - 4 speed auto 1990 EAII Fairmont Ghia - 4 speed auto |
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#851 | |||
Fiat POWAAH!
Join Date: Nov 2005
Location: Western Australia
Posts: 2,309
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Quote:
Often those stories are click bait too, but I just wonder how much influence this constant barrage of negative stories has on people.
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Holden: If you cant beat them, buy them. |
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#852 | ||
Regular Member
Join Date: Aug 2008
Posts: 2,858
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Hopefully you weren’t signing people up after 2009.
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#853 | ||
Oppressive patriarch
![]() Join Date: Aug 2016
Location: Brisbane
Posts: 733
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. Lamenting lost Australian manufacturing. |
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#854 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Quote:
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Daniel |
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#855 | ||
Kicking back
Join Date: Dec 2013
Location: Western sydney
Posts: 8,528
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If the bank is a bit sus if your income can support the loan they will either deny it or do what they did to me and make me spend more for loan insurance. Loan insurance will scare enough people off but i had the funds available. 12g. Yeah on top of deposit and stamp duty that wasnt what i was wanting to spend, but hey, not complaining about not having a house. My old man does own a brokerage but that didnt get me any form of deal, thats illegal. Good advice was what got me over the line.
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#856 | |||
Guest
Join Date: Aug 2018
Posts: 1,892
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Quote:
It's a very common clause in nearly every Business Loan. A Queensland farmer was actually given His farm back. After a fight of course.. https://www.smh.com.au/business/bank...26-p4zns8.html |
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#857 | |||
BOSS 5.4L Enthusiast
Join Date: Aug 2005
Posts: 21,904
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Quote:
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#858 | |||
Regular Member
Join Date: Aug 2008
Posts: 2,858
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Quote:
We’re talking about mortgages on private dwellings and the statement further back in this thread that put forward a hypothetical situation where house prices may fall in the future and banks could reposses houses when the LVR falls. They cannot.
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#859 | |||
FF.Com.Au Hardcore
Join Date: Jun 2013
Location: Adelaide
Posts: 1,601
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Quote:
The pension should be the same for everyone and not means tested.
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____________________ 2019 LDV G10 2009 Mitsubishi Express-GONE 2011 Honda Jazz ____________________ |
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#860 | |||
FF.Com.Au Hardcore
Join Date: Apr 2005
Location: Canberra
Posts: 13,374
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Quote:
If you want people to downsize then offer an incentive to them by exempting them from stamp duty at the very least. I'm sure plenty want to but stamp duty is BS that is quite a blocker for some people moving around. Not to mention all the other stuff that goes into moving around. |
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#861 | ||
Fiat POWAAH!
Join Date: Nov 2005
Location: Western Australia
Posts: 2,309
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Settlement tomorrow.
Been a bit of a struggle, but I got there in the end.
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Holden: If you cant beat them, buy them. |
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#862 | ||
T3/Sprint8
![]() Join Date: Jan 2005
Location: Australia
Posts: 16,334
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onya mate congrats.
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Tickfords T3/TS50 '02 Sprint8 manual Sept 24 '16 Daily Macan GTS "Don't believe everything you read on the internet. Abraham Lincoln" |
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#863 | |||
Lyminge, Shepway, Kent
![]() ![]() Join Date: Oct 2008
Location: Geelong - Go Cats
Posts: 3,197
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Quote:
The death of the borrower is an event of default.
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Mel Brooks sums it up best; "Comedy is when you fall into an open sewer and die, tragedy is when I get a paper cut" |
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#864 | |||
Thailand Specials
Join Date: Aug 2009
Location: Centrefold Lounge
Posts: 49,028
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Quote:
You get the pensions because you've got nothing to your name and its not like people live the life of luxury on it. |
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#865 | ||
FF.Com.Au Hardcore
Join Date: Apr 2005
Location: Canberra
Posts: 13,374
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Well my rates went up by 0.15 this week, after 0.08 in October so expect a letter in the mail I reckon. You'd think the banks might be shamed by the royal comission but it's business as usual
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#866 | ||
FF.Com.Au Hardcore
Join Date: Feb 2010
Location: Geelong
Posts: 1,717
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The banks are already starting to push back on some of the measures being implemented. At the end of the day they’re not there to be model citizens, they’re there to make money for their shareholders and themselves.
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#867 | |||
FF.Com.Au Hardcore
Join Date: Apr 2005
Location: Canberra
Posts: 13,374
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Quote:
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#868 | ||
Ford screwed the Falcon
Join Date: Sep 2013
Posts: 7,061
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I wish dave289 was still on AFF to participate in this discussion.
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Falcon: 1960 - 2016 My cars Current ride 2016 FG X XR6 - 6 speed manual Previous rides 2009 FG XR6 - 6 speed auto 2006 BF MkII XT ESP - 6 speed auto 2003 BA XT V8 - 5 speed manual 1999 AU Forte - 5 speed manual 1997 EL Fairmont - 4 speed auto 1990 EAII Fairmont Ghia - 4 speed auto |
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#869 | |||
IWCMOGTVM Club Supporter
Join Date: Sep 2005
Location: Northern Suburbs Melbourne
Posts: 17,798
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Quote:
As opposed to when I was with the bank that slowly kept raising rates. Best move I made and easy enough.
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Daniel |
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#870 | ||
Peter Car
Join Date: Dec 2004
Location: geelong
Posts: 23,145
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Most economists are predicting a couple of rate cuts this year. The banks are most likely raising rates now, so that when the reserve bank cuts the rates later in the year and they follow suit, they can say what great people they are by cutting rates alongside the reserve bank. Although the actual rate will be the same that it was now.
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