I have had a 6 month long battle to get finance for a property i have been building. There have been a number of issues along the way, nearly all off which have been the banks fault. The delay has cost me financialy and I have had no offer of any sort of compensation or waiving of fees from the bank. The finance finally came through when the house was 4 weeks away from completion, with a tenant ready to move in.
As this is the first property I own that I intend to occupy i am entitled to the first home owners grant, the delay in finance may have pushed me past the time frame allowed to apply for the grant. This could cost me thousands.
The entire loan has been drawn down and I am making my regular repayments, everything is as it should be….
But…
A few weeks ago a letter arrives from the bank. It states that they have lost my "mortgage document" and could i have the enclosed copy signed, witnessed and returned via the express post envelope they have enclosed.
The letter contains the "MORTGAGE OF LAND section 74 transfer of land act 1958" document that goes to the land registry office (well thats my understanding of what its for..)
Without this form does the bank have no hold over the property?, or is this just a minor piece of paper shuffling???
I am happy to sign it and send it back, but I am wondering what I can do with this situation to get some of what the bank has cost me back.
I'm thinking something like: " Hey bank, refund all my establishment, inspection fees etc…. or I will forget to sign this document"
They have no registered mortgage without this document lodged. But they would still have an equitable mortgage. Nevertheless you could use this as a bargaining point.
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 Terry,
I did a quick google of the two types of mortgage you mentioned. There didnt seem to be much difference betweeen the two as far as I could tell.
Could you please outline the fundamental difference between the two.
Thanks.
Registered mortgage – bank is a secured creditor, holding & listed on your title.
Equitable mortgage – secured by caveat on your title.
A registered mortgage is one that is legally documented with registration at the land titles office.
An equitable mortgage would be one that is unregistered.
Generally registered takes priority over non registered, but first in time also takes priority over later and the rules are very complex so even if you give someone else a registered mortgage now the bank may still take priority. If you didn't give them the paper work they could also call in the loan too so there is not much you could do – (unless you had no other assets and remortgaged the property with another bank and took out a LOC and run off with the money! You would then let the banks fight it out over priority. You would be committing offences though)
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
You've lost me a bit there I'm afraid.
Are you saying you started building a house and then tried to arrange finance afterwards, before you gave your lender any of the plans, etc or did your application? WHile there is not much detail there, that is a situation that can be an absolute nightmare…..especially if an 'owner builder.'
And then you say you are concerned the bank has cost you the FHOG when you have a tenant ready to move in? Not sure how that will work – unless you are 'being creative' (?) for a few months.
The FHOG would not normally be payable until the slab goes down – stage one. SO had you applied for finance before then? IF not, why did you not do the claim yourself as you would have been eligible (and responsible really) to do so yourself.
I guess if the bank has genuinely lost the signed copy of your mortgage you could refuse to sign it……..but then again how would you repay the loan you have signed for when it is 'called in?' That's right…..you could sell your house!v8ghia wrote:You've lost me a bit there I'm afraid.
Are you saying you started building a house and then tried to arrange finance afterwards, before you gave your lender any of the plans, etc or did your application? WHile there is not much detail there, that is a situation that can be an absolute nightmare…..especially if an 'owner builder.'
And then you say you are concerned the bank has cost you the FHOG when you have a tenant ready to move in? Not sure how that will work – unless you are 'being creative' (?) for a few months.
The FHOG would not normally be payable until the slab goes down – stage one. SO had you applied for finance before then? IF not, why did you not do the claim yourself as you would have been eligible (and responsible really) to do so yourself.
I guess if the bank has genuinely lost the signed copy of your mortgage you could refuse to sign it……..but then again how would you repay the loan you have signed for when it is 'called in?' That's right…..you could sell your house!I had wanted to keep this thread on the topic of the missing document, so I was a little brief in describing the delayed finance part of the story as it has many twists and turns which would sidetrack this thread.
I honestly dont know where to start in terms of where the stuff ups began. I agree starting an owner build job before finance is confirmed is not the best way to go about things. To cut a long storyshort the fact that building had commenced before funds were secured had very little influence on the problems at the bank. The budgeted figures were well documented and a valuation was done by the bank when the loan was finally approved. (even the valuer stuffed up his paperwork and caused another 3 week delay).
With regard to your FHOG question. The tennant is a friend needing a 6 month lease, then I move in. All legal.
The FHOG is not payable when the slab goes down. It is payable when a certificate of occupancy is issued at the end. So I could not apply until the house was finished. The SRO states the build must take no more than 18 months. Total build time was 20 months, bank delay was 6 months.
The bank is currently preparing a letter to admit the role they played in the delay of the construction.
No worries – that makes a bit more sense now!
If it helps, essentially once the bank has issued you a loan contract – that is their letter of offer. If they messed you around after this ……that's pretty bad and definitely something I would be expecting some sort of action over.
Unfortunately anything that happens before then (ie – yep, it's all good – contracts will be done shortly – go for it) while not a good 'customer service experience', is no committment on behalf of the lender.
If there has been a genuine cost incurred as a result of an error after you have signed the contracts, rather than using the mortgage doc being lost to raise an issue, (by all means refer to your goodwill in assisting them) put it in writing, request x about of costs are reimbursed, and keep moving it further up the chain until someone does something about it for you.
And re the FHOG, I have lost track of how many claims I lodged at slab down stage that were paid when I was involved with home loans in NSW – so unless your state is different not sure about that bit.Hope it all works out well regardless.
Cheers
V8ghia,
You are correct the FHOG is often payed at slab stage, but as my job is an owner builder, the grant is only payed out at the end.
I received my letter from the bank today, they have admited some fault in the delay. I will submit the FHOG application on Monday and see how I go.
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