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QUESTION3 John Ho applied for and was granted a housing loan of $350,000 from his bank, CitizenBank Ltd, on security of the residential investment property
QUESTION3
John Ho applied for and was granted a housing loan of $350,000 from his bank, CitizenBank Ltd, on security of the residential investment property that he purchased with thesefunds.
Required:
- Prior to finalisation of the loan, the bank had informed John that it wouldbe necessary to undertake a credit check on him. Identify the type ofinformationthattherelevantreportmightcontain.(3marks)
- Explain whether the bank was required to make any type of financialdisclosure toJohnpriorto issuing theloan.(3marks)
- Explain the nature and effect of the security the bank has taken fromJohn,and what remedies it could pursue against him in the event hedefaulted ontheloan. (4marks)
- Assumeforthispart onlythat John'ssisterhadguaranteedhisloanwiththe bank, having entered into a 'guarantee and indemnity' with it. Explainthe nature and effect of this contract, and in the event of John's default,herlegalright againstthebankifshesatisfiesJohn'sdebt.(5marks)
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