Jointly owned mortgages are a huge success when all is well between the joint owners who are usually partners. On paper both the owners are liable for the fortnightly payments. Yet when one owner acts and behaves irresponsibly and takes a raincheck on the expected payments for some unexplainable reason and for an indefinite period of time, the other owner is pressured to keep the payments up-to-date. I have often wondered why the bank would not contact the one who has broken the legal agreement by not contributing towards repaying the home loan and prefer to harass the second owner by repeatedly calling them or mailing letters to them reminding them of the missed payments. When I fell out with my partner he emptied out his savings from the joint account leaving me in a lurch. I had to sacrifice my savings to catch up the missed payments and to keep the ball rolling. It was becoming increasingly difficult to repay the loan on one income forcing me to borrow a huge personal loan from another bank where I had my credit card and car loan before the purchase of the property. When I appealed to the bank about the unjustness behind the whole issue they were reluctant to understand the stress and burden on one when the yoke should have been shared between the two and were more interested in the collection of the instalments.
There are hundreds of couples or partners who go through a similar crisis as far as joint accounts and mortgages are concerned. The bank always chooses the easy option rather than resolving the issues for customers. What then should be the solution to this recurring problem? If the joint owners are employed may be emphasising in the home loan agreement that each owner is liable to contribute 50% of the fortnightly payments could resolve the unfairness shrouding jointly owned mortgages and the joint account that comes with the package as in the case of ANZ Breakfree home loan package. If one is paid more than the other, then a percentage based on the income would be more feasible. If one is employed and the other is a home maker, then if repayments are not made within a specific timeframe, both the parties should agree to close the home loan by selling the property, repaying the bank and then splitting the remaining money equally between the owners/partners or as per contributions towards mortgage payments.
During my childhood days, I remember overhearing my mother tell my father about how the Patels were in deep trouble as the friends for whom they stood as guarantors vanished without a trace and the bank was forcing them to make the payments on behalf of the owners. Shortly after, when my parents were approached by long term friends to be their guarantors they flatly refused. Guarantors are necessary when there is a temporary short fall in the payments but after a specific time frame the banks should not exert pressure on guarantors to continue paying for the miscreants. Instead should have stipulated in the agreement that if the owners are being unfair to the guarantors the bank would insist on the sale of the property to close the deal.
Crucifying a good Samaritan for his act of kindness is not the way to resolve such issues. Banks need to be more customer-centered than just profit based institutions. If there is a way there is a will. To argue that such an amendment would be impossible, would be poor customer service.