Big Bank Mobile Lender gone AWOL - need help

Discussion in 'Loans & Mortgage Brokers' started by productivelywrong, 1st Mar, 2021.

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  1. productivelywrong

    productivelywrong Member

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    Hi good folks, my Mobile Lender has gone AWOL and I need your help.

    Here's the story:

    - In mid-2016 my wife and I worked with a "Mobile Lender" from one of the big banks to buy a house in Melbourne. The purchase price was $1.8 million, and we borrowed $1.44 million. The loan was an owner-occupier, variable-rate loan, with an offset, 30 years with a 10-year interest-only period. For a variety of reasons, rightly or wrongly, we bought in my wife's name with the bank requiring me to be included on the contract as a guarantor.

    - Not long after, the Mobile Lender misunderstood an email from us and switched the entire loan to principle and interest, without reconfirming with us prior or having us sign anything. As this was not what we wanted, we asked her to switch it back and she said it was too late and there was nothing we could do. As a result, we've been paying roughly double each month than we would if it was still interest-only. At that point, we should have found a new broker, but we didn't. We regret that.

    - Last August we approached the Mobile Lender to request a refinance, taking advantage of the combination of low-interest rates and my wife having a much higher salary than in the past. This would remove me as a guarantor and switch us to two-year fixed with a small variable offset. To our great frustration and confusion, it took the Mobile Lender all the way until early December to submit the refinance application to the bank. At that point, the Mobile Lender told us that it would likely take three weeks to receive a response from the bank. Prior to doing so, the Mobile Lender had the property valued, and indicated that the valuation had come back at $1.8 million - exactly what we'd paid for it at auction more than four years earlier, despite it being a house in a highly-sought after blue-chip area.

    - Five weeks later we still hadn't received a response from the Mobile Lender. After repeated emails to the Mobile Lender, we received a response that processing times had "blown out" and that we should receive a response "soon".

    - The weeks continued to go by without an update or a response, despite our emails asking for updates. Finally, on February 8th the Mobile Lender responded indicating that we should an outcome by February 26th. At this point we became curious, looked online and found that no credit check had been made by the bank against my wife previously, and wonder whether the Mobile Lender hadn't actually submitted the application before then, but we just don't know.

    - Last Friday was the 26th. It came and went without any sort of update from the Mobile Lender, despite our inquiries. At this point we simply don't know what to do, and we need your advice.

    To help your consideration, here's a bit more detail:

    - Purchase date: Q2 2016
    - Property time: semi-detached single-fronted Victorian
    - Purchase location: Blue-chip inner-north suburb, VIC
    - Purchase price: $1.8 million, borrowing $1.44 million

    - Owner: my wife, with me as guarantor
    - Amount currently owed: $1.33 million
    - Current loan type: "Home Loan" (owner-occupier), P/I, variable with offset, with an initial period of 28 years and 7 months
    - Current applicable interest rate (including discount of 1.64%): 2.75%

    - Income:
    - My wife earns USD 150,000 (AUD 193,000), earned from a US organization and paid into a US bank account. Her only debt is for the house.
    - I am an independent investor, with liquid assets (shares) held in the USA with a net value of USD 9.8 million (AUD 12.64) and a gross value of USD 17 million (AUD 21.9). I borrow on margin in the USA at 1.5%.

    - Personal circumstances:
    - My wife is an Aussie citizen. I'm a PR with US citizenship.
    - We rent out our home in Melbourne for $875 per week. Pre-COVID we'd rented it out at $1000. We rent for ourselves elsewhere for $630 per week.
    - We have one young child, currently in daycare
    - Both of us have masters-level professional degrees from #1 and #3 ranked universities in the world, and also from the #1 university in Australia
    - We live frugally, own one car - purchased in 2014, cook our own food, dress simply, have all used furniture, and don't buy any luxuries, preferring to invest income instead

    Given all of this information, and the crazy situation with our Mobile Lender, what would you recommend we do as a next step to a) free ourselves from the Mobile Lender, b) establish a relationship with a better lender, and c) get a better loan well suited to our unique circumstances?

    Also, can any of you recommend brokers/lenders who have expertise and interest in working with people with foreign income, investment income, and somewhat complex finances like ours?

    Thanks sincerely in advance.
     
  2. Trainee

    Trainee Well-Known Member

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    Tbh, none of what you wrote matters. Your education doesnt matter. Your income, employment, residency status, spending pattern and assets are all relevant to what loan you qualify for, but not what you should do.

    your goal should be to get the loan that fits your requirements, not in building a relationship with a lender, whatever that means.

    find a good mortgage broker, one on here maybe, and set up an appointment. Build a relationship with them instead. That is what you should have done from day one. Not go BACK to the mobile lender after they messed up your request.
     
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  3. productivelywrong

    productivelywrong Member

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    Yes. Thank you. I agree.

    We made a lot of bad choices going with and then sticking with this lender for so long.

    But we don't have a time machine.

    Recognizing this, the question now is what to do next.

    Right now we feel like we're being held hostage by this lender who promises, promises, promises, and never delivers. We're desperate to escape, and want to do so the right way in a way that ensures we don't end up in a similar situation ever again.

    That's why I'm sharing here - because we messed up badly so far, don't want to mess up again, and need advice from those who can help us.
     
  4. Lindsay_W

    Lindsay_W Well-Known Member

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    Ok so you need a good Mortgage Broker, don't go direct to lenders and their mobile bankers, think you know this bit already.
    Any lender looking to refinance your loan is likely to view this as an investment loan if you currently have a tenant in there.
    First thing is to check borrowing capacity in wife's name only, I don't think it will work in her name only, based on rough calculation using the info you've provided.
     
    Last edited: 1st Mar, 2021
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  5. JetstreamVic

    JetstreamVic Well-Known Member

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    Something not quite adding up here.

    If you have $AUD21mil worth of share, and your wife is on an income of $150k - How is it that you are getting the run around from a sub par mortgage broker?

    You guys haven't gotten to where you have gotten to by luck
     
  6. productivelywrong

    productivelywrong Member

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    Thanks for the thoughtful response.

    Yes - we need a good broker. No - we'll never go direct to lenders or mobile bankers again. Going through a mobile banker has been the worst choice/experience ever.

    It's helpful to understand that this will likely be treated as an investment loan. Will that be the case even if we're still fulfilling the 6-year rule and intend to move back in accordingly, or does that have no bearing?

    The reason we decided to apply for a refinance back in August was because my wife's salary had improved significantly. The downside, somehow, is that it's overseas income so the banks assess it differently.

    When we first applied for the loan the bank took into consideration my US-sourced dividend income when considering serviceability. I'm pretty sure they're no longer willing to do so, but I could be wrong.
     
  7. Lindsay_W

    Lindsay_W Well-Known Member

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    No bearing on serviceability, that's a tax ruling I believe you're referring too.
    USD income is shaded 80%
    Rental income is shaded between 70% to 80%
    Home loan repayments are calculated with a buffer of minimum 2.5% above what the actual rate is.
    HEM (mandatory minimum living expenses) for a couple with one child at that level of income would be relatively high, even if you spend less than the HEM $ figure, banks still apply the minimum in the servicing calc.

    They potentially would, but you would again need to be on the loan as guarantor or co-borrower.
     
    Last edited: 1st Mar, 2021
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  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Mobile lenders are bankers not brokers.
     
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  9. productivelywrong

    productivelywrong Member

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    Good question.

    To be honest, almost all outcomes - negative or positive - are at least in part luck, and often mostly luck. As humans, we tend to attribute our successes to skill and our failures to luck, while attributing other people's successes to luck and their failures to skill or lack thereof.

    The reason we ended up with this mobile lender in the beginning was because we had zero experience in residential property and were referred to her by a friend who was highly successful in finance and property-investment, and we trusted her referral.

    Unfortunately, this mobile lender has been a nightmare from very early on, and has continuously created situations where she promised us things, became non-communicative, left us in the dark, and failed to deliver, stringing us on and on and on as her hostages. The reality is that it's her fault for behaving in this way, but it's also our fault for not being clearer, recognizing what was going on, being more decisive, leaving her, and finding someone better. It's like an abusive relationship. Unfortunately we don't have a time machine and can't redo things the way we should have, but we can do things better moving forward.

    Coming to your question of why we're getting the run-around? Honestly, we don't know, and that's the most frustrating part of it all. We've asked and asked and asked again for clarity about the process, timelines, expectations, what's going right, what's going wrong, how we can help, etc, and mostly we just receive silence in response. It's beyond infuriating at this point. If she would just be clear with us then we could assess our options and make a choice accordingly. Without clarity from her it feels like the options are a) stay with her, keep waiting and hope for the best, or b) pull the plug, go with a different broker, and hope for the best. At this point, option B seems like a much better choice, but she keeps promising that we're days away from an outcome, so....

    Thanks for letting me vent. Yes - we messed up. Yes - we need some help moving forward. No - we don't know how best to do it.
     
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  10. productivelywrong

    productivelywrong Member

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    Both things are good to know. At this point I don't really mind being on the loan as a guarantor or co-borrower. My concern, however, is how the bank would look at my US-based investing debt, which is substantial but very productive. Any thoughts?
     
  11. Firefly99

    Firefly99 Well-Known Member

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    In the mean time it might be worthwhile calling your current bank and asking for a lower rate. Perhaps you can at least have a lower rate while this gets sorted out.
     
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  12. productivelywrong

    productivelywrong Member

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    Yes. Thank you for the recommendation. Do you have any advice on how to approach the conversation with them?
     
  13. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    A couple of things to note...

    A pricing request will possibly yield better rates that what the loan is currently on, but it won't switch it to interest only repayments. To do that, a full application will be required, possibly a refinance to a different lender.

    It's also unlikley that the loan could be set up as 10 years interest only. That was certainly possibly with some lenders in 2016, but policies on IO loans have changed significantly since then. Most likely outcome is a 5 year interest only with the option to apply for another 5 years at that time.

    If the loan is owner occupied, getting it as interest only would be tricky. Regulators have dicated that loans need to be paid off eventually. It's a moot point anyway. The property is tenanted, owner isn't living there, it will be classified as investment.

    Across the board, the lending industry is very, very busy. New purchases are getting priority, refinances and pre-approvals aren't. The Big 4 banks are generally attrocious at getting the simplest things done right now.

    It would be quite difficult to get lenders to accept US based investment income. Regular salary has some quirky bits but is fairly easy to verify. Foreign investment income wouldn't be accepted by most lenders unless it's showing up in an Australian tax return (and then it would still be very challenging).
     
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  14. productivelywrong

    productivelywrong Member

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    Thanks so much, Peter. I used to post here under a different name and you've always been one of the most helpful people here. I'm glad you still are. Thank you.

    Thanks also for sharing the info about timelines. We understand and are sympathetic to this being the case. That recognized, is it reasonable for a refinance to have been submitted on December 10th and still be in process?
     
  15. productivelywrong

    productivelywrong Member

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    Also, any thoughts about the reval situation? Acknowledging having bought at the top in 2016, the COVID dip, etc, it still seems strange for the house to have been valued at exactly what we bought it for at auction almost 5 years ago.
     
  16. Foxdan

    Foxdan Well-Known Member

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    This makes zero sense.

    high net wealth couple using a mobile lender but seem to have no idea how to organize their loans.

    Just pick a new broker and move on. You have nothing to tie you to the lender.
     
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  17. Redom

    Redom Mortgage Broker Business Plus Member

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    Just need to go to the right door for this type of loan scenario.

    while your situation is very strong, some banks don’t understand premium type lending very well or your going at it through the wrong channel (this isn’t your fault, ideally the banker could move you to the right place to cater to HNW complexities).

    Macq love these type of loans usually - we funded a refi + OO purchase recently and they moved heaven and earth to get it done given the balance sheet of the client (they were a techie and had a multi mill share balance in USD that they applied a dividend yield to even though the stock didn’t payout).

    The private arm of banks will do the same - I suspect CBA private will like this, WPC/NAB too.

    in saying all of the above, not sure what the actual aim of refinancing is. If purely cost, there’s likely a simpler way just by staying with existing bank and speaking to retentions.

    Who is the current lender (anz/wpc?)
     
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  18. productivelywrong

    productivelywrong Member

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    Hi Foxdan. It's just as easy to be kind, polite, and helpful as it is to be otherwise.

    Yes, we're high net-worth, and have been successful and knowledgeable investing elsewhere but that doesn't mean we're experts on residential property, just like someone with strong property investing knowledge might not have similar knowledge and success elsewhere.

    We went with this specific lender because we recognized that we were novices, wanted help, asked around, and she was highly recommended to us by a close friend who provided financial advisory services to UHNW clients at Macquarry. In doing so, we hoped and trusted that the lender, like so many of the brokers here, would use her knowledge and experience to help us both identify and implement a good property-investment strategy, including loan structure. Unfortunately, she didn't do so, and we've struggled as a result. Yes, you're right, we should have picked a new broker and moved on long ago. But we didn't realize that at the time and, unfortunately, we don't have a time machine. Recognizing that, we're asking for help here and now and hoping that all of you will be more helpful to us than she has been.
     
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  19. Property Baron

    Property Baron Well-Known Member

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    Switching your loan to PI without your consent? Would a solicitor be worth seeing over that?
     
  20. jaybean

    jaybean Well-Known Member

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    And when the time comes, does that option require a reassessment or are those days totally over?
     
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