I recall doing the training about the CBA product and there was one thing that was good about it. And, I think, that is if party A were to default on their loan then it won't immediately show up as a default on party B's credit file. This would give party B the opportunity to buy out the share of party A by changing banks (if need be).
Individual borrowing Capacity AFTER buying using Tenants in Common
- Thread starter Gennady
- Start date
90 % of lenders that I work with take it as Joint and Several, im guessing incl CBA for further lending
I think we have had this chat before, the product is a nice marketing piece, but it doesnt really deliver what its supposed to, ie a discrete treatment of the liability.
Our Credit risk audit team has always advised us that under ASIC interp, any security guarantee must be SHOWN to be serviceable by the guarantor if the borrower defaults - CBA is a good eg - family guarantee needs external income to be approved..........
ta
rolf
Assuming it goes that far..............
who would the summons be issued to for the judgement hearing ?
if the court found in favour of the lender,who would have the judgement recorded in their CRAA ?
im asking, coz I dont know ?
ta
rolf
I don't think this would be different to any other jointly owned property in the longer term. In the very short term it may help party B to stay clean a bit longer though.
The bank would take a mortgage over the property itself as security (not just the shares of the property), so it would seek a possession order over the whole property. Any judgment would be against both owners.
The bank would first call on the borrower of the relevant part loan, party A, to remedy a default. If party A didn't/couldn't then they could call on party B to pay the loan of A or to lose the property.
The bank would take a mortgage over the property itself as security (not just the shares of the property), so it would seek a possession order over the whole property. Any judgment would be against both owners.
The bank would first call on the borrower of the relevant part loan, party A, to remedy a default. If party A didn't/couldn't then they could call on party B to pay the loan of A or to lose the property.
So you're saying that each time a family guarantee is completed when they go to borrow they have to include that liability, which then impacts their serviceability. Do you have documents of this, would be interested to read.
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This doesn't surprise me at all. Good to know though.
I'm going to go out on a limb and say I don't believe this is correct. Would like to see document stating that 'security guarantees' will effect your servicing... could be wrong it's Friday
I'm going to go out on a limb and say I don't believe this is correct. Would like to see document stating that 'security guarantees' will effect your servicing... could be wrong it's Friday
I don't know the answer, but would suspect it is correct.
If the borrower doesn't pay the loan the security guarantor would have to step in and pay or potentially lose their property. But then again many lenders do not require a serviceability assessment from a guarantor.
Its a question for the 'credit' team.
It's a question for the magistrate when it goes tits up and their interpretation is not certain.
Hi Marty
I think it is more a question for the credit team of a bank on whether they want to include a potential liability from a security guarantee. Those with the money make the rules about lending (to a large degree).
I was referring to an example where the mortgagee tried to take possession of a property and the non defaulting guarantor objected. Regardless best a place to avoid.
I am pretty sure in this case the would be little a non defaulting party could do because they are jointly mortgaging the whole property, not just their individual shares. So this would be no different to any other bank or loan product.
