Hi Rebecca,
I always read your posts with interest and everytime you raise an issue it is an opporunity for me to review my system to see where it can be improved and for that I would like to thank you.
And personally I always try to see the upside in everything, and I think there is a great potential lying dormant with your views that no one has seen yet and I would like your co-operation to bring that potential to the fore.
That is, you don’t see wrapping from a business aspect, you see purely from a personal-emotional aspect. I think that’s great.
After my talk with the Government on better disclosure and easier to understand terms, I think we can make tremendous improvements in this area, and I think with your help we can acheive this.
What I would like to do is ask you to write here all your questions and concerns regarding wraps. And I’ll take this list away to our panel of advisors (legal, tax and other) and have them write up their answers to satisfy these questions.
Then we’ll compile these questions together and create a template FAQ (Frequenty Asked Questions) list that wrappers can attach to every contract.
We’ll that’s the idea, what do you think?
Regards
Michael Gruber
President
Vendor Finance AssociationOk – from a non business perspective.
How about the wrapper buying the property outright (no banks involved) and the wrappee has their mame on the title and the wrapper has his name on the title as a mortgagee.
Hi Yack,
I believe the reason such options are only available by mainstream lenders and not wrappers is because such structures do not maximise the captial a wrapper has available.
I understand your viewpoint and I know it is one which creates a lot of debate. However that structure you propose is freely available other leaders.
As that niche is already filled by many businesses, wrapping fills a different niche.
I guess the question for the FAQ file is;
Can I have my name on the title?
and the answer would be…
Yes, we can provide a list of registered mortgage brokers who can discuss with you a range of lending products that will give you the option of having your name on the title.
I think that should be fairly easy to execute as the Association already has brokers who provide first mortgage loans to our members.
Thanks for the idea… keep them coming.
Regards
Michael Gruber
President
Vendor Finance AssociationAnother one.
How am I (wrappee) protected in the event the wrapper is sued by another party independent of me and has to liquidate all his assets or declare himself bankrupt?
???????
Good question.
This is about proper structuring of assets. When the property is purchased in a trust and the trustee is a company. Then the property is actually not owned by the wrapper and shielded from liquidation.
However, as I said, all these questions will be reviewed by our advisors to create a standard “best practice” for the FAQ. So the answer above needs to be fleshed out and written in such a way to make it easy to understand for the wrappee to grasp (without too much legalese).
Regards
Michael Gruber
President
Vendor Finance AssociationHi Michael
I appreciate your polite message. I have a heap on at work right now, so will not be able to give you a reply for a few days. Plus we are going to Paris for Easter, mon ami (just practising).
And, besides, as Steve indicates, if the posts do not further the cause of wrapping they will be edited or deleted. Such Orwellian doctrines are hardly conducive to my writing spirit.
Maybe you might like to send me a private message, so that my comments do not hinder the sales of Steve’s wrap products.
Happy Easter to you
Bec
Michael
I was pleased to see that you offered Bec an olive branch.
I think that this is the best way of dealing with disenter of wraps. If you can find out what problems others have you can try a find a solution.
It was a pity Bec was barred before she could make some useful ideas.
Michael my opinon of you has risen since this post.
I urge other wrappers on this forum to follow Michael’s lead and try to see things from other peoples point of veiw.
I think that the VFA is lucky to have Michael as its president
The problem that I see is that by putting the property in a wrappee’s name whilst that wrappee may barely have just put down a token amount as deposit, if he were to default then the wrapper would have to pay another lot of stampduty to get the property back in his name.
The facts are that to protect both the wrappee and the wrapper the following should happen :
1. the wrapper should obtain a statement, signed by the wrappee’s solicitor, stating that the wrappee has been properly advised regarding both his rights and obligations
2. the wrappee’s right should be protected via a
Caveat on the title.3. the occupation fee paid by the wrappee should go into a trust account to start off, with an amount, equal to the loan repayment payable by the wrapper, paid from the trust account to either the wrapper if he has already made the payment OR otherwise direct into the lender’s loan account.
3. The wrapper should be able to switch lenders
4. the outstanding loan amount owing by the wrapper should never be more than the amount owed by the wrappee.
I cannot quite see how the above can be faulted.
The nonsense about ‘the poor wrappee’ being kicked out of the property is just that, rubbish.
If a wrappee has been properly advised before he entered into the contract he should not call out ‘Foul’ as there are other, innocent, people’s interest affected.
If the wrappee defaults it is only common sense that the wrapper can exercise his rights to protect not only the wrapper’s interests but also the interests of his other wrappees whose interests may be in danger of being detrimentally affected.
There is no room for complacency in this regards nor can the wrapper be expected to carry a defaulting wrappee.
There is of course nothing to stop so called do-gooders to start a benevolent fund to support wrappees who find themselves in financial difficulties.
Just don’t offload the responsibility for the problem onto the wrapper.
Whilst the do gooders are at it, they may perhaps also like to cover the problems of bank borrowers who get themselves in similar strife.
Amazingly perhaps to people like Bec, I would be happy to contribute to such a fund to help people who, because of problems beyond their control, find themselves unexpectedly in strife.
Pisces
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