Challenger low doc mortgage tossed out 03 July 2015 4:18PM Ian Rogers The cavalier approach of providers of low doc loans has been laid bare in a judgment of the Supreme Court of Western Australia that damns the conduct of Challenger Mortgage Management (formerly Interstar), Equity Plus Home Loans, Perpetual Funding Group, The Mortgage Alternative and Mortgages For Money. Each of these intermediaries and funders fostered loans to a married couple with severe limitations. "Who would lend more than $840,000 to a couple, each of whom was on a disability pension with no prospects of any form of employment, with the husband partially blind and the wife with a long-term disability, when each had nothing to offer but the desire to speculate in real estate?" Justice Eric Heenan asked at the opening of his judgment. "The answer is that the plaintiff did lend that money in a series of six loans to the defendants through intermediaries in what are termed 'low doc loans' when any semblance of precaution or independent advice for the vulnerable borrowers was absent and where the intermediaries were entities for which the plaintiff disavows any responsibility or relationship of agency. "Now that the defendants' investments have proved disastrous, four of the loans have resulted in distressed sales and a balance, insuperable for the defendants, remains outstanding." The case centred on a claim by Perpetual Trustees Victoria for possession of the last property acquired by the defendants offered as security. The court ruled a loan agreement between the plaintiff and the defendants dated on or about 17 October 2007 by which the plaintiff agreed to provide a credit facility "be declared invalid and unenforceable and set aside."