Aussie Legal Non-Profit Helps Vulnerable Senior Beat Bank In Foreclosure; Son's Manipulation Resulted In Improper Mortgaging Of Family Home For $200K

In Sydney, New South Wales, The Sydney Morning Herald reports:

• AN INTELLECTUALLY disabled pensioner has won a court battle to stave off foreclosure in a case said to have broad implications for consumers who offer their home as security for a business loan. The lawsuit concerns Wollongong man Patrick Ford, whose son - identified as "Scott" - manipulated him to put a $200,000 mortgage on the family home to buy a cleaning business. When the business collapsed and the son absconded, the lender pursued Mr Ford, who cannot read or write. The NSW Court of Appeal agreed this month that Mr Ford did not have to repay the loan, other than about $25,000.

• "[The decision] reinforces that lenders can't get around consumer protection laws by the use of business-purpose declarations and that lenders have obligations to inquire into the circumstances of people to whom they're lending," said Alan Kirkland, the chief executive of Legal Aid NSW, which represented Mr Ford.

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• Katherine Lane, the principal solicitor at the Consumer Credit Legal Centre, said the various institutions were "recklessly indifferent" to Mr Ford's ability to repay the loan. "They're all interested in their own commission."

• Mr Ford's sister, Ann Watkinson, said the ordeal had been exhausting. "We had sheriffs coming all the time," she said, recounting one visit at 4am. "We'd get a couple of hours sleep, then be awake, crying." [...] Despite the victory, she said the family would have to sell Mr Ford's home to pay expenses. The family hopes there will be enough money to move Mr Ford, 64, to a retirement village.

For the story, see Pensioner fends off lenders in court win.

For the appellate court ruling, which reversed an unfavorable lower court decision, see Patrick John Ford by his Tutor Beatrice Ann Watkinson v. Perpetual Trustees Victoria Limited [2009] NSWCA 186 (8 July 2009).

For more on real estate conveyances that are void if the grantor's signature is forged or if the grantor is unaware of the nature of what he or she is signing, see Unwinding An Abusive Or Fraudulent Real Estate Transaction? Determining If The Deed Is Void, Or Merely Voidable.

(1) According to the story, an unusual aspect of the case is the number of financial institutions - a mortgage broker, a loan wholesaler, a mortgage aggregator, an insurer and a trustee - that did not investigate whether the illiterate pensioner understood what he was signing or if he was capable of running a business. FinancialAbuseOfElderlyAlpha DeedContraTheft