That's a pretty crazy situation. It's like facing the threat of a margin call, but instead of reducing exposure, trying to find a broker that requires a lower margin..
She mentioned in one post that's they have paid down quite a sum in the last few years. Then she shows the figures, and they've not paid down that much, $9-$10k on two (or each?) property, over a two year period. I guess impressive to pay down this much on five properties, but at that rate, we're talking 50+ years to pay down the capital at their current rate. Hardly qualifies for paying down 'quite a sum'.
We've also had a number of people on this forum denying banks will be playing hardball requiring capital top ups. I don't know what else you'd call this, new valuation over 90% LVR, and suddenly they're required to pay LMI. How much would LMI be on a $370k loan?
Anyway real tough position to be in, not to mention if all the properties were put on the market today, it's anyones guess as to whether they'd sell to near the valuation levels (especially if they take a long time to sell). Strange that not one reply suggests selling a property or two to reduce exposure, if this attitude is dominant with the majority of investors, should things hit breaking point it's going to be a disaster. Nothing crashes markets quite like forced selling.
