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After the sale of a property which there is a shortfall,

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After the sale of...

After the sale of a property which there is a shortfall, what options does FSP have in recouping the shortfall. I am concerned about the family home in which the FSP has no title, it is tenants in common with my brother

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It is very possible that the loan was a case of irresponsible lending.

Submitted: 2 years ago.Category: Australia Law
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2/28/2016
Solicitor: Leon, Solicitor replied 2 years ago
Leon
Leon, Solicitor
Category: Australia Law
Satisfied Customers: 46,901
Experience: BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Good Afternoon

My name is ***** ***** I am a NSW Solicitor. Thank you for your question, and will do my best to assist you with your question. Please understand this is not legal advise Please understand this is not legal advice but a guide to assist you.

Who is FSP? Is that the bank?

You and your brother are tenants in common in equal shares on title? If it is a loan are you both borrowers and if not the one that is not a borrower have they guaranteed it?

I cannot comment on irresponsible lending, the court will look at what you signed and what information you gave the lender.

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Customer reply replied 2 years ago
The loan I hold is with CBA,
the loan on the family home is with WESTPAC of which my brother and I are 50/50
Solicitor: Leon, Solicitor replied 2 years ago

Can you tell me which one is the one you are discharging?

Or are they both registered on title?

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Customer reply replied 2 years ago
I have 2 mortages
The first is with CBA, just me and my deceased mother as guarantor and the family home as security
CBA lent me 200% of the buy price on a hall in the middle of nowhere west of toowoomba. Sale price was $75000 - loan was $150000. When my mother died she left the family home to my brother and I, we refinanced with westpac thus removing CBA from the title and leaving them with no security on my loan.
They may have overlooked my personal affairs during this time as I had to go to the FOS concerning gross mishandling of my mothers death and the products she held with them. I accepted two payments from CBA which totaled $10000 during the FOS case.
A sale of the undesirable property has begun for $95000, this is not a default or repossession, its just the best price and the only offer in two years. I have notified the bank and get the impression we will negotiate payment of the shortfall.
Bear in mind when I notified them, they told me that my mother would be liable if there was a default and the family home was security. This total systemic error that she is still alive and they still have a title over the home is just the sort of thing that the FOS complaint was about in 2011.
Solicitor: Leon, Solicitor replied 2 years ago

Good Afternoon

If they do not have security over your mothers property they cannot do anything at the moment on that.

Has the FOS found that the CBA was negligent?

You say they paid you $10,000.00 what was that for an admission of guilt for doing the wrong thing?

If it is found that you owe the money you will be liable to pay even if the property is sold for less.

The bank can enforce the mortgage against you personally. Because your mum has passed away the guarantee is at an end.

They are not registered on her hose and they cannot at present do anything.

But if they get judgement against you then they can force the sale of your mothers house as you are an owner of a half share.

Your brothers share is unaffected and the only thing they can take is the equity because the mortgage to westpac has to be paid out as it is secured.

But the equity is only form your share.

Because your mum has passes away the guarantee is no longer in place and her estate cannot be held liable. Also if you are not the owners the estate is finalised.

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Customer reply replied 2 years ago
My brother and I are the owners of the family home, does that mean that the estate is not finalised?
CBA accepted no fault and the offer of money to end the dispute, I will be taking the complaint back to the FOS as issue of the mishandling of sensitive information, telling me my mother is still alive and that they with chase her, is still a problem.
In regards ***** ***** lending, all I gave them was a letter from my employer when I was fruit picking. Seems like they relied 100% on the guarantor and gave little to no thought as to whether or not I could service this loan.
Solicitor: Leon, Solicitor replied 2 years ago

Good Afternoon

I assume the house was initially in your mothers name and when she passed you then became the owners. This means the estate has been finalised.

They lent the money on the basis of 2 properties. The one you were buying and your mums.

How much money did you ask for? This is also important.

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Customer reply replied 2 years ago
Im still unsure of your answer concerning forced sale of family home
Solicitor: Leon, Solicitor replied 2 years ago

They cannot force a sale at the moment.

They have to sue you and get judgement.

Once they have judgement against you then they can seek a possession order of your assets. Then they can seek to have the house sold but they cannot touch your brother share.

Only once they have a judgement form the court can they start the process to sell the house you own with your brother. They can even declare you bankrupt if they want making your life very difficult. But they need judgement

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Customer reply replied 2 years ago
This all came about because I wanted to borrow $50000 for a commercial helicopter license. My mother approached the bank and rep suggested I find a cheap house for around $100000 and add the 50 on as renovations. Whether or not this can be proved I'm not sure.
Customer reply replied 2 years ago
There is no reason why I couldn't service a reasonable repayment schedule for the balance, but if they call in the whole debt in 90 days it could be a problem. Would I be mistaken in believing that after issuing a questionable loan, then mishandling a deceased estate and recently making another disturbing mistake, it would appear as though they haven't behaved in a manner befitting the largest and most profitable bank.
Solicitor: Leon, Solicitor replied 2 years ago

Good Afternoon

They may have suggested it but you did it and you acknowledged what was in the papers. But having said that you can argue that the bank manager suggested this knowing what you were going to do.

It is your word against his.

If he saw your financial position and knew you could not service it but prepared the application in a way to show you could, again it is your word against his, you have to set this all out.

You have to show they were aware of the reason for the loan and that you could not afford it but they set it up anyway.

I cannot see how they mismanaged the estate. They did not ask for the loan to be paid and you are very lucky. They could have asked to have the loan paid out before you and your brother became owners, meaning you would have had to sell the house.

This has not occurred. You leave the error of discharging the loan on your mums house out of this. Rely on their actions to give you the loan and what they knew.

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Customer reply replied 2 years ago
The mismanagement was to continue issuing letters in her name after death dispite me raising the issue on many occasions, giving incorrect information about her products, demanding payment before probate was given and starting legal action without any correspondence.
Solicitor: Leon, Solicitor replied 2 years ago

Good Afternoon

That is normal when someone passes. It is only once the estate is finalised they stop dealing with it.

You can raise the issue of misleading conduct.

You did not make any payments though from the estate did you?

They normally ask for payment of the debts once they know a party has passed away.

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