Lost MILLIONS of dollars in property ... and still smiling

True, but you only have to read this forum for a little while to hear from people refused finance by one bank asking for revaluations, reassigning income etc to qualify for more lending, as in their opinion they are well able to service the greater debt.

The banks do have some responsibility, but the greater onus is on the borrower to ensure they do not over-commit. And also to be entirely truthful on any application!
Marg

 

So what's the problem with that?

I didn't know you had to have a job, I haven't got one.

What is that responsibility?

It's the borrowers responsibility to make the repayments surely?

 

I'd suggest that loaning someone who has no employment close to $700k is a little irresponsible no matter which way you twist it. Definitely the buyers are at fault too, but 'responsible lending' has to come into it at some point and the 'no employment' part of the equation would have to be a red flag.

 

How did that particular case turn out?

Banks do have policies and their "factor of safety" calcs before it gets the green light for loan obviously. They follow procedure from their end but aren't responsible for predicting the longer term change in that person's investment.... which they would be aware of with mining boom /busts, but like the borrower they just see $$profits!

And what income and what downturn factor would be required for mining towns? Doesn't that open a can of worms plus discriminating by only allowing "the rich" investors to buy in mining towns? Mining towns need housing quickly and investors help provide housing, which puts the risk on "lots of investors" rather the gov or mining companies - win/win for the gov and Australia's economy. Unfortunately some people will get burnt

 

@bob shovel I don't have all the answers but for eg CBA now has a policy in place that yields are capped at 6% for servicing. I don't agree with this across the board, but for certain postcodes something similar would possibly save everyone a lot of pain.

That particular case is stressful for everyone involved - can't sell, neg equity...lucky they have tenants, not everyone can say the same. Even with tenants it's difficult.

 

.....

 

Jess, it's been roundly acknowledged both here and in the US that banks were far too 'giving'. In fact, a lot of the time they were lending amounts to people who they knew didn't have the capacity to repay.

 

..... never mind. I have no idea what I am saying

 

Yes i have Kate 2 times a few days ago,and by the way the movie ended and the link right near the end on the new style of "CDO" then nothing changed,so then you break the movie down into who wins,once you break the movie down again it's the people that saw something that no one else thought possible then wacko,also Kate we are also the into 8 year Equities worldwide cycle and going into a bear cycle market and the people that get hammered from investing in banking equities are always the unit holders,the people that lend the money within banks ,when they stuff up the get the "DCM",and end up working in a fast food chain,never to be seen again..

 

Spoiler alert

 

The best bet for all parties involved is to work together for a long term solution.

 

I noticed some media promos for the book in the last few days so I guess it must be out now?

It also mentioned that you did declare bankruptcy... did that just happen in the last 3 weeks? Can I ask what made you decide to move on from negotiating?

 

read your Twitter, 5.8million debt disaster, how did you manage to borrow that much?

 

I guess it would be easier to keep smiling after losing millions, if it wasn't your money.

 

$5.8m debt is not bad at ~50% LVR secured against $10m assets. It doesn't feel to good when those assets are only worth a few mil.

 

I thought it was 3 million?
Marg

 

Hang on, you took a silly risk and jumped on the middle-class welfare bandwagon (property investment negative gearing, etc.) that is driving up house prices all over the country and making it nearly impossible for average Australians to buy a house the natural, honest way (by working hard at a REAL job and saving up money). Are you saying that if such risk pays off you get to keep all, but if you lose, you can just walk away? That seems even more unfair to the ordinary Australians who would like to buy a house the honest way. You got an award in 2012 for being stupid and for being greedy. If I were you, I'd be ashamed for my lack of intellectual integrity. Now you plan to write a book about your stupidity? Sounds like a great read.

 

Does the author/publisher sponsor this forum? Maybe the profits from book sales was part of the recovery plan?

 

Also interested in how you did it.
Are you able to share the conservative value of the portfolio at the time of maximum debt, and what your equity position was?
What kind of buffer did you have in place?

 

5.8 million in loans for property in a small town...
Even discounting what we know now that's like going to the casino and betting on black.