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It was supposed to be their nest egg, a half share in an investment unit in a Bondi block they were buying into with several others. But a series of blunders by their mortgage broker has saddled Helen Sturgess and Allan Giddy with two extra loans they didn't want and cannot seem to get out of.
After fighting for more than a year to correct the error, they face the possibility of losing not only their share of the unit but also their own apartment, at a time Ms Sturgess is receiving treatment for cancer.
The trouble started after the pair bought the older-style block of four apartments in Warners Avenue with two other couples last year. Each party paid for their own apartment, while the remaining one was bought equally between Ms Sturgess and Mr Giddy, and another couple.
Both couples used the same Mortgage Choice broker to arrange loans. But while arranging a loan for $318,750 for the purchase of their half share of the unit and a top-up $33,000 loan for renovations, the broker named Ms Sturgess and Mr Giddy on two extra loans for the other couple - one for that couple's share of the unit, and another loan on that couple's own unit, totalling $440,000. Ms Sturgess and Mr Giddy said they did not agree to either of these joint loans and only became aware of them several weeks after signing the paperwork, without reading it thoroughly.
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They said the broker also changed the security for these three loans without their knowledge. Their loan for the investment unit was changed to be secured against their own apartment, which they had bought outright.
Mortgage Choice admitted in an email to the couple on May 17 that the broker ''did not act appropriately'' on several occasions. He had changed ''certain aspects of the applications and loan amounts''.
''As I recall, [the broker] said it was because he couldn't get a good enough interest rate for the [other couple],'' Ms Sturgess said.
The couple concede they did not read all the loan documents on the day they signed them in August last year. They said they were allotted a very short meeting with the broker. Nevertheless, they thought they knew what they were signing.
''We trusted that Mortgage Choice, being a reputable company, would do the right thing by us,'' Mr Giddy said. ''We trusted that the broker was following our instructions and not going off on some maverick course … we did what most people do when they sign these documents.''
The couple said they wrote to Mortgage Choice asking to be removed from the two joint loans but were told that was not possible.
They have since filed complaints with the Financial Ombudsman Service and the Credit Ombudsman Service, and are awaiting an outcome.
Ms Sturgess and Mr Giddy have not made any repayments on the two loans they did not ask for. And according to joint bank statements, the other couple has fallen behind on their repayments for those two loans.
The couple fear the investment unit will be repossessed. And because the loan on the investment unit was secured against their own mortgage, Ms Sturgess said they stood to lose their own apartment.
A spokeswoman for Mortgage Choice said it stood by the broker who had been with them for 10 years, and would not comment on the case until the outcome of the Credit Ombudsman's report.
Source: http://smh.domain.com.au/real-estate...013-27jnc.html
After fighting for more than a year to correct the error, they face the possibility of losing not only their share of the unit but also their own apartment, at a time Ms Sturgess is receiving treatment for cancer.
The trouble started after the pair bought the older-style block of four apartments in Warners Avenue with two other couples last year. Each party paid for their own apartment, while the remaining one was bought equally between Ms Sturgess and Mr Giddy, and another couple.
Both couples used the same Mortgage Choice broker to arrange loans. But while arranging a loan for $318,750 for the purchase of their half share of the unit and a top-up $33,000 loan for renovations, the broker named Ms Sturgess and Mr Giddy on two extra loans for the other couple - one for that couple's share of the unit, and another loan on that couple's own unit, totalling $440,000. Ms Sturgess and Mr Giddy said they did not agree to either of these joint loans and only became aware of them several weeks after signing the paperwork, without reading it thoroughly.
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They said the broker also changed the security for these three loans without their knowledge. Their loan for the investment unit was changed to be secured against their own apartment, which they had bought outright.
Mortgage Choice admitted in an email to the couple on May 17 that the broker ''did not act appropriately'' on several occasions. He had changed ''certain aspects of the applications and loan amounts''.
''As I recall, [the broker] said it was because he couldn't get a good enough interest rate for the [other couple],'' Ms Sturgess said.
The couple concede they did not read all the loan documents on the day they signed them in August last year. They said they were allotted a very short meeting with the broker. Nevertheless, they thought they knew what they were signing.
''We trusted that Mortgage Choice, being a reputable company, would do the right thing by us,'' Mr Giddy said. ''We trusted that the broker was following our instructions and not going off on some maverick course … we did what most people do when they sign these documents.''
The couple said they wrote to Mortgage Choice asking to be removed from the two joint loans but were told that was not possible.
They have since filed complaints with the Financial Ombudsman Service and the Credit Ombudsman Service, and are awaiting an outcome.
Ms Sturgess and Mr Giddy have not made any repayments on the two loans they did not ask for. And according to joint bank statements, the other couple has fallen behind on their repayments for those two loans.
The couple fear the investment unit will be repossessed. And because the loan on the investment unit was secured against their own mortgage, Ms Sturgess said they stood to lose their own apartment.
A spokeswoman for Mortgage Choice said it stood by the broker who had been with them for 10 years, and would not comment on the case until the outcome of the Credit Ombudsman's report.
Source: http://smh.domain.com.au/real-estate...013-27jnc.html
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