Julia
In Memoriam
- Joined
- 10 May 2005
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Well, obviously I am naive in imagining no borrower would engage in a loan when they had not seen the valuation attributed to the property by the lender or the income attributed to the borrower.I'm sure I posted about the valuation process at some time several months ago on this thread - can't really be bothered reading back through it to find it. As to income figures - who would know what was used. The only income figures I ever provided the CBA were for our original loan taken out a couple of years before the last "step". I can only assume the bank used them, plus whatever info they accepted from storm itself??? As I wanted my loan approved at the time (naturally I now wish it had been declined) I didn't really care. My gripe is not over whether I could afford a loan or not, I readily accept it was my decision to take on more debt, but it is over the valuation of my property used to secure extra debt - which I had no reason to suspect was not the CBA's usual conservative approach to valuations. I was left with debt that almost equaled the value of my property - which would normally not be the case if an inspection had been carried out and a valuer used, rather than a figure plucked from a desktop system based on heaven-knows-what. If I had been left with no option but to sell my home to repay debts (regardless of whose fault it was that I found myself in such a predicament) I would have been left with no equity in my home either - and this would have been due to my acceptance of the CBA's valuation of my home, which the CBA were happy to lend against. I guess the question is whether clients had a right to expect valuations to be accurate, and whether the CBA had a duty of care to ensure that they weren't lending against inflated valuations carried out imprudently. It would appear that an agreement has been reached that implies the valuation process used at the time was less than it should have been. I'm sure some will say it was up to the borrower to ensure that their home was worth what the bank said it was worth
Clearly, you yourself would never do anything similar again. My comment was not directed personally toward you, DocK. I have, however, read many comments from Stormers who still believe there was nothing wrong with the double gearing strategy, and that their demise is entirely the fault of the banks. That is what I was referring to and I stand by my comment.
And let's remember that plenty of people have been done over by shonky advice or operators and have never received any compensation at all.
Some many years ago I had an investment with a solicitor's private mortgage scheme into which I put my then available capital. ( I would never borrow against my home to invest into anything but this was money in the bank at a low interest rate.)
The mortgage investment interest rate was 2.5% higher than term deposit rates at the time, so not excessively higher and into the 'too good to be true' category.
The solicitor checked out. He had been running this scheme for several years with no complaints or problems.
Full valuations were submitted to investors from a registered valuer, and the LVR did not exceed 60%.
I had friends who had been happily investing here for three years and had received the monthly interest on time, and the capital refunded at the completion of each project.
On the basis of all the above, I sent off my money for investment into a specific project, the details of which I'd examined carefully.
All went well for some months, and then the interest payments stopped.
It pains me too much to describe the excuses offered etc from that point.
ASIC became involved and they appointed Worrells to investigate.
Worrells spun their investigation out over many months, selling the various properties at market value in the process.
It turned out that the registered valuations were inflated by more than 50% and much of the detail provided by the solicitor regarding the work being done on the properties was pure fantasy.
Who paid Worrells for their work? Well, the investors, of course.
At the end, all the investors lost all their capital, and received none of the due interest payments, such were the charges from Worrells.
The solicitor and the valuer were duly prosecuted but that didn't bring any compensation to any investors, none of whom had been irresponsible, or reckless in any way.
So forgive my view that Stormers are being quite fortunate in receiving compensation from anyone.
