All Topics / General Property / Foreclosures

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  • Profile photo of moodamooda
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    @mooda
    Join Date: 2003
    Post Count: 12

    Do these occur in Australia? I have just read a little about how to make money on Foreclosures in the US on a Robert Allen website.

    Profile photo of Fast LaneFast Lane
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    @fast-lane
    Join Date: 2004
    Post Count: 527

    These do happen in Australia, but unfortunately I dont think there is nowhere near the amount of money to be made on them than in the US. G7

    Profile photo of TerrywTerryw
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    @terryw
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    They do occur in Australia. I have one client who is currently being foreclosen upon in about 3 weeks. (She is beyond help loanwise).

    I think you will find that these mainly go to Auction, and they generally do not advertise that they are foreclosures. So they should be selling for market price, which makes it hard to find a bargin.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of melbearmelbear
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    @melbear
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    Terry, is your client not able to sell herself? Rather than have the bank take it back and sell?

    Cheers
    Mel

    Profile photo of kay henrykay henry
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    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Mel,

    The property has to sell for market price anyhoo, so even if she has to sell (bank demand), she’ll get the same price anyhoo, one might imagine (hope for her sake).

    kay henry

    Profile photo of TerrywTerryw
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    @terryw
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    Hi Mel

    The client has a few coastal properties and was trying to hold her till summer when she could get more money. She basically has everything on the market now, but won’t make it in time.

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of kay henrykay henry
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    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Terry,

    As a matter of interest, what happened that this woman can’t hold her properties anymore?

    I ask this, not because I see $$$$ in my eyes due to someone else’s misfortune [hmm] but because I think it might be interesting for the forum to understand how sometimes, it can all go wrong.

    We’re all happy to discuss our great CG’s, and how super-rich we are due to the RE boom… but obviously, the boom and having coastal properties, has not been enough to save this woman’s financial situation.

    Did she lose her job and was unable to get another? Have significant health problems and be unable to finance? Was she over-committed? Did someone rip her off?

    I know you’re gonna protect her privacy and not play into the “blood on the streets” stuff that sometimes we see on here, but I am wondering why she has to give up what she’s probably strived so hard to get?

    kay henry

    Profile photo of aussierogueaussierogue
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    @aussierogue
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    melbear – i like your suggestion that she ‘sell herself’ in order to meet her debts…

    i guess thats one strategy open to most of us as a last resort. i am ugly so i dont see it working for me….

    (hehe)

    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    I have just written an article about this. Due for release in the Sept issue of API. It’s about debt mgt, what to do before you borrow and what happens if things go wrong.

    From my research people have plenty of opportunity to manage their finances once they get into trouble to avoid the situation where the bank forces them to sell. The whole process normally take 4 – 6 months before the bank says “sell now!”.

    Just to be a bit of a loan nerd… foreclosing is where the bank transfers the ownership of the property into their name and the holds onto it. This rarely happens. Normally they just take possession and appoint a local real estate agent to sell the property.

    Cheers

    Stu

    Profile photo of melbearmelbear
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    @melbear
    Join Date: 2003
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    Ha ha Aussie [biggrin]. Not quite what I meant…

    Kay, I was more thinking of the lady saving her credit rating if she can sell her house herself and pay back the debt the bank is demanding.

    Stu, if the bank only demands it is sold, and takes the proceeds, does that still cause a default? Or is the default caused by getting into the trouble in the first place?

    Cheers
    Mel

    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    Mel

    The law stipulates that there are three prerequisites that must be fulfilled before the lender is allowed to take possession and sell your property.

    1. There must be a default (either through non-repayment of principal or interest or not fulfilling another provision contained in the mortgage contract);

    2. A notice must be served to the mortgagor requesting the default to be remedied (e.g. repayment of overdue amounts). The mortgage documents will set out how the notice is to be served; and

    3. The default must continue (without remedy) for a period of 30 days or one calendar month from the service of the notice.

    However, in reality, lenders will work with a borrower for many months before they decide to sell your property.

    Cheers

    Stu

    Profile photo of AceyduceyAceyducey
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    @aceyducey
    Join Date: 2003
    Post Count: 651

    Also if a bank forecloses on a property and then sells for below market value (as determined through the use of an approproiate sales campaign) the owner can sue the bank, as has happened several times already in Australia.

    Cheers,

    Aceyducey

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I don’t want to say too much, but this person had just overcommitted by buying too many properties too quickly (even not having deposits did not stop her). The market just turned a bit too quick. She has not got a job and has not even made one payment on some of her loans, ever!

    On the positve side, she has fairly large amount of equity across her portfolio, and is not overly worried. (btw, she came to me after getting into this mess).

    Incidently, I know a second mortgage lender that is suing a major bank and a valuer over a recent forclosure sale (ie the bank allegedly sold too low, and the valuer valued too high).

    Terryw
    Discover Home Loans
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    Terry- thanks for that. And stu, you must have read my mind- I have a thought, and you write an article about it- hehe.

    Terry- what you’ve described is a cautionary tale. With the flatter market, I think we might see a bit more of this kind of situation- seeking quick riches, 105% loans, high-risk strategies… whilst people might boast about doing this stuff when the market is good… if the market falls, the same strategies can just cause pain.

    I hope she gets out of it well, Terry :)

    kay henry

    Profile photo of Stuart WemyssStuart Wemyss
    Member
    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    Actually Aceyducey it is very unclear if a bank has a duty of care to the borrower. There is a lot of evidence that they don’t. Hence, they can sell less than fair market value. Let’s not forget – they are a motivated seller!

    Kay – I have tapped your house and wired your brain. I know everything you do and think about. Luck for you that I don’t article articles about all your thoughts! :)

    Cheers

    Stu

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