Expert Question - NCCP Act

Hi Terry,

You may recall a debate from way back in 2009 on another forum ( NCCP Act 2009: Lenders not permitted to 'call in' loans unless borrower is in default )

The debate revolved around how tied a lender's hands were should the LVR of a property fell to a level that was unsatisfactory for the lender.



You seemed to conclude back then that ( NCCP Act 2009: Lenders not permitted to 'call in' loans unless borrower is in default )
"
Which basically means you if breach a condition of your mortgage agreement the mortgagee can exercise the power of sale.

cl 88 of Schedule 1 of the NCCP lists some requirements which must be met before a credit contract can be enforced. These requirements include period of default, service of notices, etc."

The debate continues to this day on another forum (happy to provide the hyperlink if you wish).

Shadow claimed to have got an email from Treasury which (he claimed) supported his position that the lender's hands were tied... he has refused to share the original pdf version (name redacted) but rather, insists his text transcript is all anyone needs to know about.

I have also contacted Treasury, and got a far less supportive response to his claim. Indeed, Treasury did not want to be put in a position of saying it was allowed, or not allowed in the NCCP Act.
Their response (from a Division Head) is below, with my name redacted.

 

Could not edit so will add.


I am wondering if you have formed an alternate opinion over the years, or if another expert has an opinion on the matter.

I don't believe the trigger has been used, but I do suspect lenders who put clauses in their contracts that talk about LVR being kept at a satisfactory level through the loan put them in for a very good reason... should they even need to enforce them.