• Lender’s Mortgage Insurance: Who Does it Protect?

    What exactly is lender’s mortgage insurance (LMI) and whose interests does it protect?

    According to a report released by two of Australia’s largest mortgage insurance providers, about 70% of borrowers believe LMI protects them in the event of a default. This is not correct. LMI is an insurance designed to protect the lender.

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  • Lender Seeks to Enforce Equitable Charges and Wins

    Equitable charges came under the spotlight in a recent NSW Supreme Court ruling. In Morris Finance Ltd v Free [2017] NSWSC the Court analysed the wording of a lease agreement. Did it contain language necessary to create an equitable charge?

    The Lender looked to enforce the charge by seeking orders for judicial sale of property and ancillary orders for possession.

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  • Doctrine of Marshalling Comes Under the Spotlight

    marshalling

    An England and Wales High Court decision ruled in favour of the creditor when considering the use of the equitable doctrine of marshalling debt. However, on appeal to the Supreme Court, the decision was overturned.

    The doctrine of marshalling operates in the same way in Australia, therefore lenders should be aware of the recent rulings.

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  • Bank Wins Despite Claims of Fraud & Unconscionable Conduct

    wins recovery of possession

    Attempts by Borrowers to dodge Bank’s recovery of possession claim with an unlikely counterclaim backfires.

    In Australian and New Zealand Bank Group Ltd v Beamond & Anor [2017] QSC 208 the Supreme Court of Queensland rules in favour of Bank’s right to recovery of possession of mortgaged properties. The Court also dismisses all counterclaims submitted by Borrowers.

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  • Don’t Let Mortgage Fraud Blindside You

    mortgage fraud

    Mortgage fraud is of growing concern within the context of the Australian economy.  

    UBS, the investment bank, warns that up to a third of Australians are lying on their loan applications. Surveys conducted in 2016 and 2017 confirm this concerning trend. What can lenders do to protect their interests?

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  • Lender Gets an Enforcement Warrant Despite Delay

    enforcement warrant despite delay

    In a District Court of Queensland decision, a lender gets an enforcement warrant even though more than two years have passed since obtaining judgment for possession of the security property.

    In the recent ruling in Westpac Banking Corporation v Keppel & Anor [2017] QDC 223 the Court takes a cautionary approach. But the lender, in due course, gains the upper hand.

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  • Mortgagor Wins Right to File Cross-Claim Against Mortgagee

    to win cross-claim

    In a recent judgment of the Supreme Court of NSW a mortgagor obtains the right to file a cross-claim, but with restrictions. To pursue further claims an additional security amount is payable to the mortgagee.

    Australian Securities Ltd v Borina Pty Ltd [2017] NSWSC 1073 considers whether a mortgagor’s claims are futile and doomed to failure.

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  • Personal Property Securities Register: Perfecting Registration

    personal property securities register

    The Personal Property Securities Register (PPSR) is a national online register It protects parties purchasing personal property from either an individual or an entity. How can a lender perfect its registration so as to ensure protection?

    OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 highlights the importance of correctly registering a security interest on the Personal Property Securities Register.

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  • To Imply or Not to Imply: Examining the Duty of Good Faith

    duty of good faith

    Whether or not the elusive “duty to act in good faith” actually exists in commercial contracts is a matter of considerable debate.  The courts appear so uncertain in fact, that they explicitly accept the ambiguity and proceed “just in case” on the basis that such a duty does exist. 

    This occurred in Kosho Pty Ltd & Anor v Trilogy Funds Management Limited [2013] QSC 135. The Queensland Supreme Court acknowledged that there was little guidance around the existence and nature of a duty to act in good faith. And yet the Court proceeded on the assumption that such a duty existed regardless.

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  • Guarantees Tagged Unconscionable: What Can Lenders Do?

    unconscionable

    Claims of unconscionable conduct are a constant threat for lenders.  Lenders may feel confident that a guarantor secures the debt repayment, only to find the guarantees struck out as unconscionable. 

    Therefore, many lenders now structure their facilities to avoid guarantees by listing parties as co-borrowers.  However, a new line of cases may have extended the principles of unconscionable conduct to parties other than guarantors.

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