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Steve and Iris Karamihos's living 'nightmare'

Daniel Piotrowski    news.com.au    March 13, 2013

AN ELDERLY couple with little English and health concerns are celebrating after a judge released them from a million-dollar loan which should never have been approved in the first place.

Bank tried to evict elderly couple
'Nightmare of adversity and misfortune'
But there's good news for them...

Steve and Iris Karamihos, both nearly 80, were threatened with eviction from their Sydney home after they could no longer afford to pay back a $1.2 million, 25-year loan approved by Bendigo and Adelaide Bank in 2007.

In a scathing judgment, NSW Supreme Court Judge Michael Pembroke ruled the loan, which was to be invested into their suburban cafe business, was "unjust" under national credit laws.

"The loan was a bridge too far, at too late a stage of their fast-fading lives," Justice Pembroke said. "Its unsuitability was compounded by the bank's incompetence."

The judge ruled they only had a "feeble" ability to read and would not have been able to understand the loan's complex legal documents.

The Greek couple migrated to Australia at a young age, did not go to high school, and had worked "long and hard" conducting their cafe business for decades.

Justice Pembroke said the bank had relied on an optimistic and unverified valuation of the couple's business property, which the couple were going to use as their "exit strategy".

The judge described what the family went through after taking out the loan as a "nightmare of adversity, misfortune and travail."

The couple had taken out several loans in the past, and the judge said the Karamihos' decision to take out a new loan had been "marked by naivete and simple-mindedness".

The ruling said the couple should be restored to their previous position before the Bendigo and Adelaide Bank loan.

A spokeswoman for Bendigo and Adelaide Bank said: "The Bank will consider its options in this matter."

The couple celebrated staying in their home - and their birthdays, which are days apart - at home last night.

"We were facing ruin, now we can stay in our home," Mr Karamihos said. "Why didn't the bank do this from the start?"

The court case was brought about by Geoff Shannon, who runs the consumer rights group Unhappy Banking.

Mr Shannon said the case was another example of a shameless grab for cash by a bank at the cost of honest, everyday Australians.

"There is more and more of this type of practice coming to light, as banks test the regulators and the courts, to see how far they can push these unethical and brazen grabs for cash."

Last modified onTuesday, 28 May 2013 04:38
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