Hardship application after a Property Law Act notice

The lender must treat the email as a hardship application and process it under the CCCFA hardship provisions. It should acknowledge receipt promptly, record the date, and decide whether to agree to a variation within the statutory timeframe, generally 15 working days, extended if it properly requests further information. The lender must not enforce the mortgage while the application is pending, provided the borrower has complied with reasonable information requests. It should ask for the missing three months' bank statements and proof of the new part-time income, and explain why they are needed. It should assess the budget: $620 weekly income and $540 essential expenses leaves only $80 a week, which matches the proposal but leaves no buffer for rates, insurance or repairs. The lender should consider options such as a temporary reduction, interest-only period, term extension, arrears capitalisation, or sale by private treaty. If it declines, it must give reasons and tell the borrower about the internal complaints process and an approved dispute-resolution scheme. The application should not be ignored because a notice has expired.

Expiry of the Property Law Act notice does not automatically authorise a mortgagee sale. The lender must have given the required notices, waited the prescribed periods, and be able to show it is exercising the power in good faith and for a proper purpose. If a valid hardship application is pending, the lender should not enforce while it is being considered. A mortgagee sale is a last resort; the lender should explore a private sale, a repayment arrangement or a variation first. It must also manage the property and insurance risk: the policy lapsed two months ago, so the lender should consider force-placing insurance and adding the cost to the debt, while telling the borrower. The lender should not sell at a discount that leaves a large shortfall without a proper marketing process. If it proceeds, it must account for proceeds and pursue any shortfall only in a reasonable way. The collections officer's view that 'the notice has expired' is not enough; the lender needs a documented decision that enforcement is appropriate.

The $80 weekly arrears repayment is better than nothing, but it would take over three years to clear $14,600 and leaves no margin for the lapsed insurance, rates or unexpected costs. The lender should test whether the $620 income is sustainable and whether the $540 expense figure is realistic; the missing bank statements are essential. A temporary variation, such as capitalising the arrears over the remaining term or an interest-only period, may be more workable than a small weekly payment. The sister's $20,000 guarantee could reduce the lender's exposure, but it does not fix the borrower's ongoing servicing problem. The sister needs independent legal advice and must understand that she may have to pay. The guarantee should be limited and time-bound if possible. The lender should also consider whether the borrower can sell the property by private treaty to avoid a mortgagee sale. Any arrangement should be documented, with review dates and clear consequences for missed payments. If the lender declines, it must give reasons and refer the borrower to dispute resolution.