(Ed: All we can do is smile… Finally
From: wayne styles <email@example.com>
Date: Sun, 10 May 2015 15:13:04 +1000
To: Max Anderson <firstname.lastname@example.org>
“VERY IMPORTANT PRECEDENT SET : BANKS CODE OF CONDUCT IS LEGALLY BINDING.
“It’s a significant decision because it means banks will be held to account if they say they are going to give certain information or make certain disclosures and then don’t.” The Bank tried to make out that it’s ‘errors’ in their documents were not important, the Judge said that the errors WERE significant, and the Judge raised serious doubts about the evidence from the Bank manager. The Judge said that “the borrower could not have met his expenses from his income.” The Bank knew that he didn’t earn enough to pay for the loan, yet they approved the loans – because they thought that they could take his home & his properties if it all went pear shaped! This is pure asset lending by the Bank.
In my humble opinion, based on this ruling, it seems that anyone who dealt with a bank who was not given a copy of the MEMORANDUM OF MORTGAGE / STANDARD TERMS DOCUMENT prior to signing their mortgage would have excellent grounds to sue and have the mortgage annulled by the court on grounds that the bank was contractually bound to provide full disclosure and failed to do so.
The argument might be, that as an unsophisticated borrower, they were required to sign away their legal rights to the property, without proper disclosure from the bank that signing the mortgage was in fact giving a power of attorney to the bank whereby the borrower / mortgagor surrenders all its legal property rights to the lender / mortgagee.
Secondly, it could be argued too that, it is an impossibility for a borrower to give away rights by POA when the borrower has no knowledge that, by signing the mortgage, that is what he is being deceived to do.
A person can’t give away rights without having the intention and will to do so. He/she must know what they are doing and then intend to do so for it to occur.
So many mortgages do not fit this simple requirement because the power of attorney contained in the mortgage memorandum was not disclosed to the borrower before signing the mortgage, so the borrower would have no idea of its existence.
I believe, cases like this could easily be overturned on these grounds, if argued correctly.”
See Karen Hudes of the World Bank – Latest Interviews