I joined “ESC” in NZ recently and there was this post by the Forum manager. What do you think?I replied that I thought it was a pity that this option was no longer available for some needy people, and was told off severely!
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“Following a Press Release in October 2003 by Sue Griffiths of the NZMBA (New Zealand Mortgage Brokers Association) where she said and I quote:Home loan lenders are, we believe, uniformly against financing properties involving Buy-Back schemes. Many have also banned Wraps and Rent to Buy associated scheme. Whilst the documentation of such schemes may be legally acceptable, most lenders are opposed to such schemes. All brokers are advised to disassociate themselves from arranging funding for such schemes” as Wraps, Rent to buy arrangements and Buy Back schemes, and are to be careful to investigate any application to make sure it is not involved in one of these schemes.
Since the NZMBA releasing this statement most of the major NZ banks have endorsed it.
ESC is therefore no longer recommending wraps within NZ and this month has decided to withdraw all products and services pertaining to wraps. In Australia the market conditions, legislation and the finance industry’s position on wraps varies from NZ and therefore a varied approach is recommended.”
I have never done a wrap, but after reading Steve’s book It looked a good option for some peopls who can’t get a loan through the banks. Sorry this is so long.Suze
<<edited – opinions in opinionated please>>
Well it depends on how much you tell the banks….
As for being illegal – No. But it is illegal not to honestly answer any questions on the mortgage documents, but if they don’t ask – why tell them????
If wraps actually becomme illegal through GOV legislation (rather than what others think is illegal) – lease options are a great way to go. Theres always more than one way to skin a cat![
]Rgds.
Lucifer_au<<edited>>
<<edited – no personal tauts or jibes>>
Knowingly withholding information that you know will materially affect the lenders assessment of your application is dishonest in my book.
It is commonly accepted the most lenders in Aust will not finance a WRAP transaction and similar warnings have been sent to mortgage brokers (by some lenders).
How would you feel if you rented a house to a person that owned many cats & dogs. You didn’t ask them if they have pets but it is clearly written in the lease that pets are not allowed. That person could turn around and give you the same lame excuse… “well you did ask!”.
Have some respect for the people you do business with. Lenders do not like WRAPS. Most loan documents have clauses not permitting WRAP’s!!!
Cheers
Stu
Thanks for you thoughts.I personally don’t like the wrap thing, BUT I can see where it could be useful.
I didn’t know that ESC had had bad publicity.Have’nt been in this game very long. Good to know though,I don’t feel so bad about the scalding!!Suze
A recommendation from an organisation or person is not a ban.
You need to tell your lender what you are doing as required. That said there is always a lender out there. They borrow thier funds and resell it on the market at a 3-7% mark up. They are not going to say no to wrappers for long
Thank you Stuart. Basically, if a bank says no wraps, or no loans to third parties or whatever… the loan will be void if ever the wrappee wants to get out of it.
kay henry
Hi guys …..
SO does this mean that IF a MAJOR BANK allows wrap loans then the system is now ok ??????
Wes[biggrin]
<<edited – no taunts or personal jibes>>
There are some lenders that actually lend with full knowledge about wraps, both here and NZ. Other lenders take the attitude that the borrower can do anything he likes as long as he/she pays the mortgage. So due to the fact some lenders allowing the wrap with full disclosure, it is NOT illegal in Aust (in SA you don’t do wraps, but rather LO) or NZ.
Rgds.
Lucifer_auModerator,
Now why did you go and ruin a perfectly legitimate posting ?
If a person is going to provide their opinion on wraps in a wrap forum, surely.
1. This is the wrong area for it
2. The person should tell everyone what their experience is, seeing as they are writing as if from a position of knowledge ???And, we still wait for the questions to be answered…. no jibes, just the facts will do nicely thanks…….
ahhh.. yes…. the facts…… still waiting……
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