Yes.
In the event that the borrower defaults on their loan (for example, by not making the required loan repayments or not complying with their other loan obligations, such as keeping the property insured), IMB may be forced to exercise its rights under the loan, including procuring a sale of the borrower’s property. In this case, if there is a shortfall after the borrower’s property is sold, IMB may call upon the guarantor to remedy the shortfall up to the limit of the guarantee. If the guarantor does not pay this amount, IMB may call upon the security provided by the guarantor to remedy the shortfall and take action to recover amounts owing by selling the guarantor’s property or taking the guarantor’s Term Deposit.
IMB wants to ensure that the guarantors understand the risks of providing assistance to a borrower under the Family Guarantee. Therefore, it is mandatory that guarantors obtain independent legal advice prior to settlement of the loan.
