Any experience in dealing with the Commonwealth Bank as Mortgagee in Possession?

Money
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Hello Everyone. I am currently looking at possibly purchasing a home unit in Queensland, where the Commonwealth Bank is selling the property, having foreclosed on the owner who had a mortgage with the bank. That is, the bank is selling as Mortgagee in Possession.

When I look at the Contract, the first half of it is the standard Real Estate Institute of Queensland standard contract, which is very fair, balanced, and even-handed in its protections of each party to the transaction.

HOWEVER, the second part of the contract is Special Conditions.
These totally strip away ANY and EVERY right which might have accrued to the new purchaser under the standard REIQ contract; and in addition, they require a Guarantor.

I will never go as a guarantor for anyone (as my children well know), and nor would I seek for anyone to go as a guarantor for me. I find it obnoxious that they seem to be REQUIRING this for every purchaser.

Oh, by-the-way, it seems that in Queensland, they established the law around home-unit sales, with CONSUMER-protections in mind. Part of that, requires hefty “Disclosure Documents” to be available when selling. TWO important pages of that documentation are NOT completed, and despite requests to the agent to obtain them, they are not forthcoming. (And their Special Conditions in the contract strip away any comeback against them for this anyway.)

After having been very patient for a few weeks now, seemingly stupidly believing that such missing documentation was merely an unintended oversight; my cynical side is emerging, and I am viewing the bank and its agents in a far more sinister light.

Accordingly, I would find it very helpful to read of the experiences of other people who have encountered this sort of thing before; and to hear from those whose mortgages have been foreclosed upon by the bank might also help to cast some light on the situation.

Thank you all in advance for any assistance with this.

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Haven’t had any experience, but seems a bit odd asking for a guarantor for the purchase if the property.

Are they expending the purchaser to also take over the previous owners loan whereby a guarantor may be required…but very odd way of selling a mortgage in possession property as the buyer should be able to arrange their own independent finance?

It may be best to get some legal advice from an experienced conveyancing lawyer on the banks contract conditions, to establish their purpose and reasonableness.

Unfortunately this forum is not the place to obtain such advice.

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If I was you take all the documentation too a solicitor and get him too look it over, if the bank wants a guarantor it sounds too me like they want you too take over the previous owners mortgage on purchase not buy it with a new mortgage.l Your right too be wary I’ve got 2 loans with Commonwealth Bank and they stuffed up on one off them twice.

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@phbriggs2000Consumer Defender.

Thank you for your thoughts phbriggs.
It is pleasing to read that you share my thoughts about their requiring a guarantor.

But, no, I was not seeking legal advice from people in here.
Rather, I was seeking their personal experiences in a similar situation with this bank, either as mortgagor having been foreclosed upon, or as a prospective purchaser of a foreclosed property from them; so that I can better understand the entire context of this situation.

Thank you for your input.

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Thank you fphicks for sharing your experience and your thoughts.

Yes, I wanted to obtain legal advice, but it is a waste of money to attempt to do so until I am in possession of the FULL documentation which the Disclosure Documents are supposed to provide; so I am stymied until either the Real Estate Agent or its principal – the bank — provides those to me. After having waited about 3 weeks for them, I am not expecting any joy in that department.

It is very disheartening to read that you have had TWO bad experiences with the same bank. Thank you for sharing that anecdote too.

Again I thank you.

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That’s a pretty weird one. Although it’s not unusual for there to be a series of grossly unfair terms in the ‘special conditions’ section of a contract for sale of land. There were some doozys in the contracts I was looking at when I bought last year.

Call me a cynic but I’d say 90% of them were in there so the lawyer/conveyancer could justify their fee. They’re not usually at the request of the vendor and are more of a bargaining chip that the vendor will remove if it means they can make the sale.

I wouldn’t be surprised if this was a standard inclusion in CBA contracts.

Your lawyer/conveyancer should be able to straighten it out.

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Hello Xavier. Thanks for your thoughts on this.

Yes, as the vendor is a huge and powerful bank, I am assuming that they have placed these restrictions in the contract on purpose. If so, it does not speak highly of them as a fair-minded institution at all.

One of the many reasons which I had in posting this question here, was to ascertain if anyone else had experience of purchasing from the Commonwealth Bank in this sort of situation, in order to ascertain whether or not this is normal for them. Sadly, so far it seems that no-one has such experience, to be able to shed light on the matter.

Yes, like some of the others, you correctly state that a solicitor or conveyancer should be able to assist, but it is no use going to them until I have received all of the correct documentation, and so far that is still not forthcoming from the real estate agent.

Thank you again for your input.

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@grahroll

Hello. I have seen in my own listing when I log on, where you seem to have now made 3 postings on this topic; and yet I cannot find any of them within this thread itself.

As I have read many of your postings on other topics / threads with great interest and respect, so I should really like to read here your thoughts. But I do not understand why they are not published to the thread itself.

I am assuming that there is no way here to facilitate direct email contact between us, the way that Choice staff can make contact; so I am posting this here, in the hope of somehow reading your thoughts. Thanks for trying nevertheless.

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I’ve always been of the belief (note I am not in any way a lawyer) that contract terms can be stipulated and signed off on, however if they contradict law then they are by default invalid, but for some strange reason it is not illegal to include them.

This happened to me in an employment contract. Some of the terms were completely against established law and/or precedent. I got legal advice, and was told that while it was completely legal to include them and ask me to sign off on them, they would be completely unenforceable. I recall saying that it felt like I was being bullied in the contract, and the answer was yes you are but that too is not illegal and now you have legal advice you know better. Wow - remember Fox Mulder? Trust No1.

I wonder if the same applies here. Lots of “BS” conditions in a contract put there by lawyers who have nothing better to do and no morals or ethics (hey, they work for a bank after all) to bully the little guy …

For what its worth … get legal advice. Not cheap, but maybe cheaper than not getting it :slight_smile:

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@draughtrider: Thank you for sharing your thoughts.
Yes, I agree. In theory our law provides for FREEDOM of/to contract between the parties. And it is the power differentials between the parties which usually dictate that the weaker party almost never gets any benefit from this policy or principle – exactly as you saw with your employment contracts.

The problem with accepting contracts which may have illegal or unenforceable clauses in them, is that the weaker party will have to pay for ongoing legal advice and representation in order to try to benefit from such unenforceability or illegality – which that weaker party will almost always not be able to afford. Therefore, far better IF one has the option, to avoid such unfair contracts in the first place.

As I have replied to others here, I intend to pay for legal advice, but only once I have been provided with the FULL documentation as required by the relevant legislation. I had a small win today with the real estate agent, after I decided to get nasty after a month of patient waiting.

Now to see if the final legislatively-required documents are supplied soon! If that ever eventuates, then I can take them to a lawyer for informed advice.

I am in the fortunate position of having quite a few other options, so that I do not have to accept what is trying to be imposed upon me.

It would still be very helpful to hear from anyone who has first-hand experience of this mortgagee-in-possession situation, as mortgagor, or as prospective purchaser, with the Commonwealth Bank.

Thank you again for your input. I value it all.

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I purchased a property in Melbourne approx. four years ago under similar circumstances. The sale was handled by Trustees & Executors; no guarantee was required. The sale and settlement proceeded in the normal fashion.
Hopefully, by now all of you issues have been resolved.

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@tentacle. Thank you so much for your response – the first one from anyone with experience with this sort of matter. I am unclear though, whether you purchased from the CBA, or from Trustees & Executors. Good to hear though that there was no guarantor needed, and that all proceeded okay.

This place is advertised by a local real estate agent.
The agent deals with the CBA’s solicitor in Brisbane - Gadens Lawyers.
I submitted an offer to purchase the property using only the standard contract with no special conditions. The response from their lawyers (if I recall correctly that it was the lawyers who responded)) was a refusal of my offer.

I have several other options, including two units in the same complex, but at higher prices – although in much better condition; as well as other options. Therefore I do not have to bow down to their unreasonable demands (well, they are to my mind anyway).

Thanks again for your informed response.

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Hi Ray 15
I have checked my records; the vendor was actually Perpetual Trustee Company Ltd.and not the Commonwealth Bank. The original owner was heavily in debt, but at no time was it ever suggested that I needed to guarantee that all debts against against the property be satisfied before clear title was issued. It sounds to me that the CBA were trying to secure the certainty of loan payment from you. Your vendor for instance could have had substantial debt with the Land Tax Authority, and they would have first call on the sale proceeds. You are very right to be so wary. Hopefully your documents will arrive soon, if not your solicitor will put pressure on them. I used a conveyancing firm with strong ties to a firm of solicitors who deal only in property.

Regards.

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Thank you to all who provided input to the issue here.
The opportunity has now passed. They refused my offer to sign a standard REIQ contract; but have now sold to someone else.

I quizzed a local real estate agent about this the other day, and he said that many or all of the major banks demand similar special conditions when re-selling properties on which they have foreclosed. I still think that it is disgusting.

Thanks again to all, and to Choice for providing us with this wonderful facility.

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Thanks for sharing the experience @ray15. Hopefully it will also be useful for others facing similar situations

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Thanks Brendan.

As an addendum, I learned this week that they sold the property for $10,000 less than their final advertised price for it; yet I had offered to pay their asking price as long as it was for only a standard REIQ contract — which they refused.
So the largest company and largest bank in Australia, could afford to throw away $10,000 just to stick with their way-over-the-top Special Conditions.

I wonder how many other businesses can afford to be so cavalier.
Makes one shake one’s head in trying to understand their mentality.

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My new bank (and possibly my old ones) refuses to sign anyone else’s forms regardless of what.

I needed a US government form signed by a bank staffer; the form did nothing but require their address, phone, my account numbers, and a staffer to sign it. The purpose was establishing a direct deposit. That signature could not be done but they were happy to arrange a letter on their letterhead with an official looking stamp verifying my account details.

The intransigent policy refusing to sign anyone else’s paperwork, even when it clearly binds them to nothing, was breath taking, especially considering their operational IT systems, processes, and customer facing staff seem to be among the tops.

The messages are that many companies have legal counsels and perhaps even our laws that remain in by-gone days where the operational mode of the day were people in half height wooden walled cubicles, glass tops, with each wearing a green visor, and only generational legal counsel change will allow any evolution.

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