Sydney man forced to sell his mum’s home to pay out ex-wife
A Sydney father is being forced to sell his mother’s home to pay out his ex-wife, after taking out a complicated mortgage with Aussie Home Loans.
Mark, who asked not to use his real name, said he was talked into using his mum’s home as equity to buy his first house with his wife six years ago, news.com.au reports.
But now he is in the middle of a divorce and needs to sell his mother’s apartment to give half the proceeds to his ex-wife.
The man says he feels “conned” by Aussie Home Loans broker into a highly complicated process.
“I use the word ‘conned’ intentionally, because Aussie got two mortgages out of me, not just one,” he said. “So now my number one problem, and priority, is what do I do with my mum?”
An Aussie Home Loans spokeswoman told the publication the company had launched a review and was “working with the broker to understand the details”.
Mark’s ordeal began in 2011 when he and his partner decided to buy their first home. On their combined income, they believed they could afford repayments on a loan of $650,000 but the problem was the deposit.
After ANZ knocked them back, they visited broker from Aussie Home Loans — which at the time was 33 per cent owned by CommBank. Mary says the broker “fairly quickly” began ask about their parents’ homes and whether one could possibly go guarantor.
“I was initially sceptical because I didn’t really want to drag either of our parents into this,” Mark said.
The broker advised Mark they could use a gift of $50,000 from his partner’s parents for a deposit to buy Mark’s mum’s apartment for $300,000. His mum could then gift the profit from the sale back to the couple, which they would then use for a deposit on a $650,000 home in Kogarah.
Mark said his mother was OK with the arrangement as she feared her violent ex-partner would try and claim defacto status and lay claim to her house.
“[The broker] knew about this too,” he said. “So my mum was actually happy with this arrangement. This was another point that pushed us towards saying okay, let’s buy mum’s place.”
But it ended up leaving the couple with two mortgages totalling $880,000.
“Ever since then I have been shaking my head thinking, ‘Why did we allow this to happen?’ We should be in debt for a family home [for] $650,000, not in debt $880,000.”
Mark said he wanted “one house for me and my wife to build a family in”, but now he owned “two homes, owe a lot of money, and now I have to try and figure out what to do”.
Mark’s story comes as the Banking Royal Commission prepares for its first round of public hearings focusing on consumer lending practices
His story also serves as a reminder of how things can go wrong when parents put their own assets on the line to help their children enter the property market.