Hollywood Star Will Ferrell’s Movie Gives Queensland Couple Hope In Mortgage Crisis
In late 2011 Peter Braithwaite and Clare Andrews were watching funny man Will Ferrell’s movie- Everything Must Go. The movie documents a man’s financial struggles and he ‘surrenders his property in lieu of mortgage’, effectively handing back his property to the bank. Like many, Peter and Clare were in serious trouble, having overstretched themselves with a negatively geared home and investment property and car debts. The movie showed possibility of a light at the end of the tunnel and they researched surrendering their investment property in lieu of their $300,000 mortgage. The Commonwealth Bank accepted their proposal but neglected to mention one fact… Peter and Clare would apparently be responsible for any financial shortfall. Peter and Clare no longer have their investment property but have been left with a debt equal to almost half the original cost of the property in 2006. $154.866. They are aiming to get 154866 ‘likes’ at facebook.com/154866likes to help the Commonwealth Bank realise their error and dissolve the debt.
According to the Australian Bureau of Statistics one in seven Australian households is spending more than it earns with monster mortgages and surging power bills. On January 6th 2012 Peter Braithwaite and Clare Andrews walked into their local branch of the Commonwealth Bank (CBA), handed over the keys and voluntarily surrendered their investment property in lieu of the mortgage secured on it.
It was back in May 2011 that Peter and Clare first contacted the CBA advising they were having problems paying the mortgage on their investment property citing the recession as the main reason. The CBA were very accommodating and offered hardship assistance in the form of reduced repayments. They kept in touch with the CBA and in December 2011 spoke to them again about the possibility of surrendering their property in lieu of the mortgage, as they were unable to meet even the reduced payments. After numerous communications the CBA accepted Peter and Clare’s investment property in lieu of the mortgage but at no point did they inform them they would be liable for any financial shortfall. The CBA had advised that they would sell the property within three months, after getting two valuations, and if there was a shortfall they would seek to claim it through their insurance.
In August 2012, a full eight months after accepting the property, the CBA sold the property at a massive loss. In October 2012, ten months after surrendering their property, Peter and Clare were informed they now owed a third-party, Genworth Financial Mortgage Insurance Pty Limited (GFMI), $154.866. Between October 2012 and March 2013 Peter and Clare repeatedly disputed the debt with the CBA and GFMI and in March 2013 logged their dispute with Financial Ombudsman Service (FOS). In April 2013 the FOS advised that the CBA had passed the debt onto GFMI and that they could not deal with the case. The case had been automatically logged with Credit Ombudsman Service (COSL) who would investigate the dispute with GFMI.
On April 27th 2013 Peter and Clare emailed Ian Narev, Chief Executive Office of the CBA, making him aware of the situation and asking that the debt be waived. Five days later they received a reply from the CBA stating they apologised if it wasn’t made clear at the time but Peter and Clare were liable for any balance of debt owing and also advising that the debt was now owned by GMFI so any future dispute ought to be raised with GMFI directly.
On the 5th May 2013 Peter and Clare replied to the CBA stating a number of facts. Firstly that at no point before they surrendered the property did the CBA make them aware they would be responsible for any financial shortfall. Secondly the fact that the CBA had passed the debt onto GMFI was irrelevant, as the debt shouldn’t exist in the first place. Thirdly Peter and Clare were in the process of making their situation know to the national media by attempting to gain 154866 ‘likes’ on a Facebook page detailing their dispute with the CBA. Finally they would be seeking legal advice.
Peter and Clare have set up their Facebook page at facebook.com/154866likes and are seeking ‘likes’ and stories of other people’s struggles with their banks.