The main debates seem to be about what if wrappers dont pay down there original morgage on the wrapped loan. Which of course can result in the wrappee loosing his home as the banks step in to recover there money. Maybe a way around this is to introduce into the legislation more cross colatorisation for the wrapper which would be covered by solicator documents puting the wrappers ppor as security. Might just make the wrapper keep up the payments.
After all the wrapper is covered by default as he can rewrap but the wrappee is at the mercy of the wrapper.
Dont know a great deal about this topic but wrapping seems to be getting a fair bit of flak by the media. I like the concept and would not like to see it banned or restricted. Any suggestions ?If you want the rainbow youve got to put up with the rain!
Great post.
Another idea I’d thought about as well, is some sort of clearing house. i.e. an independant body that receives payments from the wrappee, and, then, makes payment to the bank for the loan portion, followed by the difference to the wrapper….
It could work, but would need legislation to support it.
Cheers
Scott
Pelican Investments
http://www.pelican-invest.comHi Risky
In Victoria I believe the legislation means that it’s actually illegal to cross collateralise a wrap property with any other property. So that may not work here.
It also means that you have to be careful with debenture mortgages if you’re using a company/trust structure, because that effective cross collateralises all the properties in your company/trust.Keep smiling
Felicity
Ahh IC, I think the idea of a clearing house would be a great idea. Everything gets payed through the right channels and then the wrapper recieves the differnce. I guess there would be a slight fee for this service but hey as long as everyone is legally secured it should work fine.
Regards Risky
If you want the rainbow youve got to put up with the rain!
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