# House mortgaged without husbands permission



## walkers orig (27 Jul 2009)

What would be the consequences if a spouse mortgaged or remortgaged a house without the other spouses permission. The person never told the lender or solictors that she was married. Would a bank still have good title? Would the husband have any rights in this situation?


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## PGMOD (27 Jul 2009)

Was the house title in both names? Did she own the house before the marriage?


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## walkers orig (27 Jul 2009)

No, one name only. 

Yes, she did. They got married in 2003. The existing mortgage was redeemed in 2006. It was then mortgaged again in 2008. At no point did she say she was married.


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## z109 (27 Jul 2009)

Was it the family home?


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## walkers orig (27 Jul 2009)

Yes.


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## bond-007 (27 Jul 2009)

The bank could be in a pickle come repo time.

http://en.wikipedia.org/wiki/Family_Home_Protection_Act_1976


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## j26 (27 Jul 2009)

If it's the family home, and the non-owner spouse never consented, tis voidable at the behest of the non-owner spouse.

This doesn't void the loan, but voids it as a charge/mortgage on the property - the bank will still probably hunt for the money through other means (e.g. judgment mortgage).


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## putsch (27 Jul 2009)

Whoever took out the top up will have had to swear an affidavit to the effect that she/he was/was not married at the time - so while non-assenting spouse may be clear the mortgaging spouse must have perjured herself.


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## bond-007 (27 Jul 2009)

> so while non-assenting spouse may be clear the mortgaging spouse must have perjured herself.


That would appear to be the case here.

Would it really void the charge/mortgage?


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## j26 (28 Jul 2009)

bond-007 said:


> Would it really void the charge/mortgage?



Under the '76 Act, it was automatically void but it was amended by S54 of the Family Law Act, 1995 to make it voidable within 6 years on application of the non-owner spouse.


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## Mr. C.J.H. (30 Jul 2009)

Hold your horses there folks- I think we're jumping the gun a little bit. We're all forgetting that section 3(3) of the 1976 Act says:
"No conveyance shall be void... if it is made to a purchaser for full value"

This exception essentially applies to a bona fide purchaser for value. The definition of purchaser includes mortgagee (bank) and the definition of conveyance includes mortgage. So unless the purchaser (in this case the bank who lent the money) had notice from their own personal knowledge of the fact that borrower was married and that it was in fact their family home, or if that fact would have come to their knowledge if such enquiries and inspections had been made or reasonably ought to have been made then the general rule that the conveyance is void does not apply. 

Therefore where, as it appears in this case, that a person deliberately concealed the fact that the property was the family home and that they were married and the bank and/or their agents having made due enquiries do not discover that fact then the non owning spouse is precluded from relying on the general rule that the transaction is void. Accordingly, the issue that this whole thing turns on is whether the bank had actual or constructive notice of these facts and as the borrower/owning spouse would have in the mortgage process had to swear a statutory declaration that the property was not a family home and probably also that they were not married, it is perhaps likely or arguable that these enquiries are about as far as the bank could go or reasonably expected to go in enquiring/ establishing the facts. Thus they probably did not have notice for the purposes of the Act and if this is so, then the mortgage will still be valid and the non-owning spouse will have no protection under the FHPA 1976. 

In any event, even if this was not the case and the non-owning spouse was protected under the Act, as another poster has correctly pointed out, the bank would have recourse to normal debt collection court procedures culminating in a well-charging order and an order of possession of the property. Albeit this would be a longer way of repossessing the property it would nonetheless be the banks strategy and ultimately have the same end result, with enormous additional legal cost implications which of course would be borne by the borrower. There are several ways to skin a cat as they say. 

So I wouldn't be cracking open the champagne just yet on account of pulling a fast one on the bank!


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## bond-007 (30 Jul 2009)

Banks rarely give full value of a house as a mortgage. 

I would say the the 76 act would still cover the non owning spouse. How would a bank find out if a person is married or not? The act was put in place to stop people from doing what is alleged to have been done here. 

If the mortgage was declared void, there would be a window in which the owner could sell the property and that would thwart any judgement mortgage attempts. I don't know if the bank could slap an injunction on the owner to stop a sale?

As for costs, if a banks' repossession attempt was unsuccessful the bank would be liable for costs not the borrower.


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## csirl (30 Jul 2009)

Are the couple separated? Do they talk to one another? Difficult to see how this could happen in a normal relationship.


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## Mr. C.J.H. (31 Jul 2009)

..


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## rmelly (1 Aug 2009)

Mr. C.J.H. said:


> I think we're jumping the gun a little bit. We're all forgetting


 
Speak for yourself there Charlie, some of us didn't forget it.


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## bond-007 (1 Aug 2009)

What had CJH written before he removed it?


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