QLD BFA to release names from mortgage without refinancing

[sewing1979]

Greetings. I have found similar topics but no conclusive recommendations on my matter so I seeking advice. My situation is...

My Ex Defacto and i separated over 3 years ago. There are two properties still held in joint names. 1 block of land and 1 house which is now rented but it does not cover the mortage. I pay 100% of the loans as she has zero earning capacity through due to a combination of mental and physical constraints. Both properties have negative equity as I was caught on the wrong side of declining market post an oil & gas construction boom.

Given there is no equity and I have no capital to facilitate any refinancing of the properties, I am stuck with servicing the loans myself. I was of the belief that this was the only was to release her from the mortgage.

I then received some legal advice, suggesting that a BFA might help. The original intent was to simply use the BFA to protect my future stake in the assets and stop her from claiming a % 20 years down the track. My lawyer then went on to say some banks (westpac and anz) have on occasion, released parties from a mortgage using the BFA without the need for refinancing. That would be the best outcome for our situation and something she would agree too.

I suppose my question is, does anyone have experience with a similar matter. I bank with CBA and have not yet been able to clarify their ability to do same.

Many thanks

 

[sammy01]

I'd have thought the problem isn't with the banks.... You have a loan contract with them.... The ex's name is on the deed / the title of the property. So hypothetically, you spend the next 20 yrs paying off the debt. Debt paid - SWEET. So CBA have no interest in what you do next...

You then try and sell the house / or the block - You'll need the ex's approval to sell as she is on the title and let's assume when they sell they make a profit. She can refuse to have the funds released to you... So they sit in the conveyors account until you come to an agreement.

Easy solution - sell them. Suffer a loss now as it will likely be a smaller loss than paying the bills for years, plus interest plus plus plus only to sell them and have legal arguments about who should get what

 

[sammy01]

oops sorry. I'm gonna change my advice after re-reading your first post. If she signs a BFA that states any equity in the properties is yours then I'd reckon that is sweet.

 

[sewing1979]

I just spoke with CBA and they suggest a refinance has to be undertaken regardless of BFA or even a court order - stating that it is governed by regulation. Can anyone speak to that?

I appreciate that many people who are looking to remove a party from a mortgage may have equity or other capital to assist in facilitating in any refinance process. I do not, as the the properties hold negative equity.

Am I stuck between a rock and a hard place? I could spend significant $ on proceeding with a court order but if the bank still needs to refinance, it could be futile

Perhaps the only option is to keep mortgages and attempt to a BFA to protect my % equity

Thoughts anyone?

 

[Atticus]

I just spoke with CBA and they suggest a refinance has to be undertaken regardless of BFA or even a court order - stating that it is governed by regulation. Can anyone speak to that?

Yep... Fairly strict lending criteria these days.. They must be satisfied that you can service a loan... That may have just become even more difficult now if your income is affected by Bio security controls.

Given there is no equity and I have no capital to facilitate any refinancing of the properties, I am stuck with servicing the loans myself

Can only suggest that you talk to the bank about having the loan repayments suspended... I seem to recall that is possible ATM (6 months) due to Bio measures & impact on peoples ability to service their mortgages... In the longer term. Inpossible to predict how the real estate market may look in 12 mths...

 

[AnahiGood]

The thread is from three years ago, but the issue you're facing with joint properties and mortgages can still be relevant today. It's essential to seek up-to-date legal and financial advice to address your specific situation.Given the complexity of your case, consulting with a legal expert or a Mortgage Advisor Nottingham in your area would still be a wise move. They can provide you with current guidance and assist you in finding the best solution for releasing your ex-defacto from the mortgage while safeguarding your interests.Time may have passed, but resolving such matters often requires professional assistance, so it's never too late to seek the right advice.