An Agent rang me to tell me that a property I was intrested in may be up for sale again soon. I was sold at auction for X amount. He told me it has not settled yet, he thinks the bank will say "no bingo"
. Because the sale price was too low. How does this work. If the place belongs to the bank I thourgt the vendor must let them know that they are selling. What if they say the selling price was too low, will it be sold again. It was not a morgagee auction. Can the bank hold the title? Whats the deal on this one…….Thanks
TonyBI would seek the advice of your solicitor and have anything the agent says in writing. A few years I allowed a contract to fall over due to the severe health prognosis of one of the buyers as advised by the agent only to find later that it wasnt actually true. Whilst the agent may also have been caught unawares, I would now say "prove it". Experiece does tend to make one cynical.
mickTony
It maybe that the sale price is insufficient to pay out the outstanding mortgage and therefore the Bank will not allow for the Title to be released.
Nothing uncommon there.
Richard Taylor | Australia's leading private lender
Qlds007
Yes thats what its all about. But if the vendor can pay out the loan with their own money + that of the sale the bank should not care about the actual sale price. Who sets the reserve in this situation, the bank? It waists the buyers time and money, inspections, when it cant be sold. Will the buyers get first preferance to make a new offer?
Thanks
Tony………….
Tony
All the lender will want is for the loan to be repaid and will not care whether it be from the sale proceeds, the borrowers back pocket or a combination of both.
If you have entered into a purchase contract and the vendor cannot settle because of this then your rights to sue for Specific Performance are the same as the Vendors in the case of you being unable to complete.
Richard Taylor | Australia's leading private lender
Richard
You said that this case is nothing uncommon. When the bank will not had over the title it puts the buyer in an bad position. You have no title the cost of sueing even if you win, the vendor has no money anyway. Does the morgagee insurance pick up the short fall on the loan. Also if the vendor is falling behind in repayments it will go to a mortgaee sale anyway and may be get less. Is this something common? Any surggestions as I like this place alot but I did not make it to the auction. I was thinking of approaching the vendor and letting them know Im still intrested. They are on the verge of bankrupcy. Can I offer them the amount that the bank want to release the title, provided it still a bargain of course. What your thourghts on this.Cheers
T…………..The owner cannot invoke the mortgage insurance, only the bank (the insured). The vendor will have to come up with the shortfall between the net sale price and the outstanding loan amount. Seek legal advice as to whether you can sue for specific performance and lodgement of a caveat on the property to prevent the bank disposing of the property under you.
The bank will only release the title if they are paid out in full on settlement. So if the person sells it for less than is owning, they just have to chip in on the day of settlement.
If there is a default and the person cannot pay, the bank will eventually sell the property and sue the owner for any outstanding money. If there is mortgage insurance, the bank may be covered, but then the mortgage insurance company will be out of pocket and they will sue the owner.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Guys it seems a bit like whos sueing who. I think it will be back on the market soon.
Tony….
. Because the sale price was too low. How does this work. If the place belongs to the bank I thourgt the vendor must let them know that they are selling. What if they say the selling price was too low, will it be sold again. It was not a morgagee auction. Can the bank hold the title? Whats the deal on this one…….
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