Table of Contents
What is a mortgage loan?
A mortgage is a kind of loan sanctioned from a bank or a financial institution which enables the borrower to buy a property. The mortgage is secured by the property itself. In case the borrower fails to repay the loan, the bank would sell the property and recover its losses. It is a standard method which allows individuals as well as businesses to purchase real estate properties without having to pay the full amount at a time.
What is mortgage recovery?
In the event of default by the borrower, the bank takes over the mortgage property or it is sold. Mortgage lawyers help banks and financial institutions with the recovery process and this is known as mortgage recovery. The bank recovers the amount of loan from the sale proceeds of the property and if anything is left, it is paid to the borrower. If the full value of the property is not recovered from the sale proceeds, the borrower may be declared bankrupt.
Due to changing laws and regulations, the lenders are increasingly finding it difficult to recover and repossess their assets. Banks and financial organizations seek help from mortgage lawyers regarding mortgage recovery services. In Australia, the mortgage default rates are increasing because home buyers are finding the balance on their loan exceeding the value of their secured property. According to a report by ANZ which was last updated on 2 May, 2019, around 500 to 600 families faced difficulties in terms of making payments.
The role of mortgage lawyers
Mortgage lawyers put a lot of emphasis on timeliness, level of service and attention to detail helping their clients to add value to their organization. They have the required expertise in mortgage recovery and documentation. Following are some of the important roles they play regarding mortgage recovery.
- Maintain strict time limits: Mortgage lawyers develop a mortgage recovery system built on a comprehensive technology platform. This recovery system helps to carry out the recovery process within strict time limits. They make sure that their clients get the funds which are due to them within the shortest possible time when the mortgagor defaults.
- Handling tricks by defaulters: The skilled and experienced property lawyers can efficiently handle the various tricks used by defaulters to holdup mortgage recovery actions. The mortgage defaulters often deny receiving documents, disagree with the amount of arrears, and claim defects in the documents provided by the mortgagee. The lawyers defeat such claims either by negotiation or litigation. They help lenders to recover penalty interest entitlements and legal costs from the sale proceeds of the mortgage property.
- Sensitive approach: Property lawyers play an important role in home loan recuperation, as they have mastered the art of managing issues like surrendered assets that include mortgage recovery. The mortgage lawyer Perth is aware of the sensitive and emotional nature of mortgage recovery actions and they deal the matter with tender loving care. This is very important because the mortgagor may be in a vulnerable position. They treat borrowers with compassion throughout the recovery process, so that the value of client’s organization is enhanced.
- Communication: They build a rapport with the borrower and identify the reasons that are responsible for the borrower’s current financial state. Such interactions and the data available help the lawyers to get a true picture of the borrower’s situation. They work together with the customer to find a suitable resolution which takes care of the customer’s lifestyle as well as affordability.
- Complex recovery issues: The property lawyers work on a number of complex recovery issues where the borrowers or the mortgagors have been restricted from successfully opposing the mortgagee’s recovery procedures in the Supreme Court. As a result, the mortgaged property has been sold through auction and the clients have recovered their loan and related expenditures.
- Brand protection: Property lawyers provide a wide range of mortgage recovery services that include mortgagee repossession and post repossession support services. They are experts in handling residential, industrial, commercial and rural properties including vacant land. They aim to provide full field service support in order to reduce recovery time and keep clients away from directly getting involved in the recovery process. They carry out all mortgage related field services, initial occupancy field calls, document serving, eviction, and premises security.
- Cost-effective outcomes: Financial service providers benefit from the specialized knowledge and skills that property lawyers in Perth have regarding brand awareness, low cost, and fixed fees. To achieve cost-effective outputs their recovery team uses alternative dispute resolution methods where it is applicable. Particularly, in case of defended matters they generally suggest informal settlement discussions in early stage.
- On lender’s behalf: On behalf of the lenders, mortgage lawyers regularly issues statutory notices and demands for mortgage defaults. They begin the proceedings related to possession and debt recovery, take possession of the properties after processing, works on the discharge of mortgages and sales of security properties. They also fight defended mortgage recovery actions, issue bankruptcy notices, and initiate bankruptcy proceedings.
- Respond to applications, oppositions, claims: They respond to applications which are set aside, applications opposing to wind up and applications regarding creditor’s petitions. Mortgage lawyers also respond to claims that fall under Australian Consumer law, Contracts Review Act, Farm Debt Mediation Act, and National Consumer Credit Code.
- Advise on: The property lawyers offer their advice on mortgage recovery actions which also includes deceased mortgagors. They advise on AFCA complaints, sales by mortgagors, on alternative way of getting possession of security properties and recovering loans. Financial service providers can also obtain advice from the best property lawyers Perth regarding all kinds of insolvency issues that arise in relation to mortgagors. The property solicitors also offer their valuable advice regarding appointment of controllers and receivers.
Mortgage lawyers provide a compliant and ethical mortgage debt recovery service by ensuring that the borrowers are treated fairly at the time of encountering mortgage arrears. They resolve the liabilities of the borrowers with a sensitive approach. Therefore, property lawyers play a major role in mortgage recovery, as they effectively negotiate with mortgagors who wish to delay the recovery process, make sure that there is scope for open communication or negotiation, and simultaneously continuing with the recovery action in the Supreme Court.