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  1. #11
    Join Date
    Dec 2005
    Location
    Auckland
    Posts
    21

    Default

    It would not be the loan amount but the priority amount, i.e. the amount used by the lender of the first mortgage to prevent other lenders securing a loan against the property.

  2. #12
    Join Date
    May 2007
    Location
    Chch
    Posts
    773

    Default

    Really? In that case the article is highly misleading.... Also, how is it any easier to find that figure?

  3. #13
    Join Date
    Dec 2005
    Location
    Auckland
    Posts
    21

    Default

    it's not usually on the title document, but it may have been in the auction documents. Otherwise they could have access to the LINZ system.

  4. #14
    Join Date
    May 2007
    Location
    Chch
    Posts
    773

    Default

    OK, thanks. I did wonder how they were allowed to sell at less than the mortgage amount, so it makes a lot more sense now. Very misleading journalism though.

  5. #15
    Join Date
    Dec 2005
    Location
    Auckland
    Posts
    21

    Default

    If it did sell for less than the loan amount then the lender has recourse to the lenders insurance to top it up (which is paid by the borrower) and/or they will seek the balance from the mortgagor. This may mean that the mortgagor would have to sell another property, which could be the family home. Not a great situation to be in.

  6. #16
    Join Date
    May 2007
    Location
    Chch
    Posts
    773

    Default

    But the buyer still gets clear title?

  7. #17
    Join Date
    Dec 2005
    Location
    Auckland
    Posts
    21

    Default

    Yes, the sale is clean. The issue is between the lender and the previous owner.

    You need to protect yourself against this so that not all of the dominos fall over at the same time.

  8. #18
    Join Date
    Feb 2008
    Posts
    203

    Default

    Hi Beagle, is there an insurance that covers the difference between the sale price and the mortgage amount? I've never heard of that.

  9. #19
    Join Date
    Dec 2005
    Location
    Auckland
    Posts
    21

    Default

    Hi Glenis, its called LMI, LEP, and taken out by the lender and paid for by the borrower. It's charged on any loan with an LVR of above 80%. It is sometimes waived or reduced depending on the strength of the application. It's not an insurance that you can go out and buy.

  10. #20
    Join Date
    Feb 2008
    Posts
    203

    Default

    Thanks, learn something every day.


 

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