What and Who to look out for!
This is so the mortgagee (bank/lender) can obtain the best possible price for your home at public auction.
Unfortunately it also advertises to people who do not have your interests at heart. If you have people knocking on your door and saying they can save your home from mortgagee sale here's a check list to make sure they are not breaking the Law under the Financial Advisers Act or Credit Contracts and Consumer Finance Act (CCCFA)
Anyone giving financial advice or arranging finance or recommending a financial product MUST be registered with the Financial Service Providers Register - if they are not on the register and a member of a disputes resolution scheme then he/she is breaking the law. To check to see if the person who has offered to help you is registered click here to go the the governments Financial Service Providers Register.
Anyone giving financial advice or arranging finance or recommending a financial product MUST give you their Disclosure Statement stating what type of adviser they are.
Anyone giving financial advice or arranging finance or recommending a financial product MUST be a member of a disputes resolution scheme.
If you are offered finance to save your home from a mortgagee sale the lender offering the finance MUST be registered with the Financial Service Providers Register - if they are not on the register and a member of a disputes resolution scheme then the lender is breaking the law.
Why is this important...you just want the money right?
The Financial Advisers Act was introduced to protect consumers from unscrupulous "advisers" and "lenders." The dispute resolution schemes are there to be a voice for you if something goes wrong and you wish to make a complaint - if you decide to work with a person who is not registered or a member of a disputes resolution scheme then you may have little protection under the law.
The reason "advisers" are not registered is because the government does criminal background checks, credit checks, insolvency checks and you can not be a registered financial adviser if you have had dishonesty charges against you in the last 5 years.
We highly recommend you seek independent legal advice when you have been issued a Property Law Act notice and especially before you sign any legally binding documents; for example Letter of Offer for Finance, Agreement for Sale and Purchase of Real Estate. By independent we mean you find a lawyer not a lawyer recommended by the person offering to help.
Here's some shocking stories of what scam artists do to folks in a mortgagee sale.
An unregistered adviser knocked on the door and offered to help with the pending mortgagee sale. After some discussions he advised the family they needed a Family Trust - he drew up five Family Trust Deeds, he was unable to secure finance to stop the mortgagee sale however he charged them $11,500 for setting up the Trusts. The Trust Deeds were never sighted or presented to the client. For his fees of $11,500 he put a caveat on their house and this stopped them from refinancing back to a bank. They had to pay 11.95%pa for 3 years before winning their case at disputes tribunal. We stopped this mortgagee sale and once caveat was lifted refinanced them to a bank. The scam artist was ordered to pay for costs but says he's broke and on the benefit.
An unregistered adviser knocked on the door and offered to help with the pending mortgagee sale. Finance was arranged with an unregistered lender and lawyer the unregistered adviser recommended. When the clients asked for his registration he said he was a "private banker" and did not need to be registered. He threaten the clients with emails and phone calls for not paying his fees when they got proper legal advice and did not settle on his loan offer. All these delays meant there was not enough time to save their house and it was sold at mortgagee sale. Previously the scam artist pleaded guilty and was convicted for fraud and served 4 years jail for 81 dishonesty crimes.
An unregistered adviser knocked on the door and offered to help with the pending mortgagee sale. The client needed $20,000 to complete renovations on her home. The scammer convinced her to sign a 'sell and buy-back" agreements where she would sell her home to his company and agree to re-purchase the property 12 months later for a higher price. She also had to sign occupation licences. This scammer then raised a mortgage of $250,000 using her home as security, forging signatures and an application to the bank. He then left overseas with the money - the client had no idea until the bank starting selling her house at mortgagee sale. We were able to save this house from mortgagee sale. The SFO (Serious Fraud Office) had charged this scam artist who pleaded guilty and was convicted for mortgage fraud and sentenced to 2½ years imprisonment.
An unregistered adviser knocked on the door and offered to help with the pending mortgagee sale. The family desperate to stop the mortgagee sale allowed the scammer to arrange a loan with his de facto partner as guarantor - this was to hide the fact the scammer was involved in the transaction. We were able to stop this loan proceeding and advised the clients to obtain independent legal advice - we also were able to stop this mortgagee sale. The SFO (Serious Fraud Office) had recently charged this scam artist (who's a current bankrupt) and he pleaded guilty for 5 dishonesty crimes, was convicted and sentenced to 1½ years imprisonment in 2013.
The reason these scam artists are not registered is because the government does criminal background checks, credit checks, insolvency checks and you can not be a registered financial adviser if you have had dishonesty charges against you in the last 5 years.
It's very unfortunate that these scam artists prey on folk in a vulnerable position - and let me assure you they are out there and are very good at what they do. You do not want to be one of their victims.
Always check the person offering to help is a registered financial adviser and please seek independent legal advice. Go to FSPR to check they are registered.
Why am I qualified to help you?
Steve McGowan can declare that;
I have been a Mortgage Broker/Adviser since 2001 specialising in non bank loans and mortgagee sales.
I have stopped 141 homes from being sold at mortgagee sale.
I am a registered financial adviser in accordance with the Financial Advisers Act 2008. FSP#79541
I am a member of Financial Services Complaints Limited a dispute resolution scheme in accordance with the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
I have current professional indemnity insurance of $2,000,000
I never have had a claim under my professional indemnity insurance.
I never have had a complaint against me from a client.
I never have been accused or convicted of dishonesty or had fraud charges against me.
I never have been a bankrupt or discharged bankrupt or had bankruptcy proceedings against me.
I never have been prohibited from being a director of a company.
I never have had a default, collection or judgment against my Credit Report.
For more information on mortgagee sales call Steve McGowan - Mortgage Broker/Adviser on 0800 ADVOCO (0800 238 626) for a free consultation.
Call us on 0800 ADVOCO (0800 238 626) or email us.
Some of the 141 homes Steve has saved from the auctioneers hammer!
King George Avenue, Epsom.
Williamson Avenue, Grey Lynn.
Khyber Pass, Grafton.
Ivy Place, Birkdale.
Evandale Street, Glen Innes.
Whangaparaoa Road, Whangaparaoa.
Layton Road, Manly.
Kenwick Place, Pakuranga.
Scenic Drive, Swanson.
Port Waikato Road, Tuakau.
Layton Road, Manly.
Eyre Street, Henderson.
Edinburgh Street, Pukekohe.
Ivon Road, East Tamaki.
Hillsborough Road, Mt Roskill.
Israel Avenue, Clover Park.
Dawson Road, East Tamaki.
Howell Street, Mt Roskill.
Lake Road, Devonport.
Rangatira Road, Birkdale.
Levesque Street, Birkdale.
Alidade Place, Massey.
Otaua Road, Waiuku.
Ambler Avenue, Glen Eden.
Trojan Crescent, New Lynn.