Broker required 3th development in Melb

Hi All,

I’ve been screwed over by my companies credit fund in the 11th hour.

I want to see if any broker could match or help me out with the loan.

I won’t go into my personal details but.

They were offering 4.11% for a 1.9m loan for a 3town house development, 5yr IO, Herron Todd whites valuation came back at 2.53m. Two weeks ago or so.


Due to the loan needing to be reviewed by APRA the ceo decided to change up the loan and make it commercial. There are many headaches involved with that (interest rate, not being IO for 5 years as preferred (but I was going to change it after 12 months anyhow) but I think the one I overlooked but may be the biggest pain is they have to be individually titled. I was planning on holding onto them and titling them at a later date.

The bank really hurt me on this one as it has completely mentally drained me.

I have emails and all saying it was all approved and the conditions I was happy with. So I’ve started the demolition and paid the 5% building deposit.

This all changed whiles the loan contracts had been drawn up.

So if you’re a broker and have a bank which doesn’t plan on screwing me over feel free to contact me.

Thanks for all y’all help.
Ps the credit union is / was Nexus Mutual.

 

Without knowing your details you might be in a bit of pain here.
If you have emails stating it was approved, open up dialogue with the ombudsman.
Look at getting your 5% back at a minimum.
I know someone in a very similar situation recently who couldn't get finance after they were told they were approved by email and were successful in getting the deposit back.
They sold the property after that

And like Rolf said. The Apra comment is rubbish,
My guess is the loan expired and policy changed in the meantime and you no longer qualified

 

APRA is a government body that regulates the banks. They don't review individual loans. They sort of make 'suggestions' to the market in general and the lenders then adjust their policies. They're not directly reponsible for your problem, more like the lender made some policy changes after the Royal Commission and you no longer qualify.

I've encountered a few situations that were similar. An approval in principal is issued, the client gets the things done they need to, they try to finalise the finance and the bank has shifted gears and doesn't want it any more.

You can certainly fight it and possibly win, but exploring other options is probably quicker and easier. Odds are there is a decent alternative available.

 

I'm not sure - as the valuation was only completed recently and everything was submitted recently. Which from what I was told was all approved (by the credit manager ect) we did need to make some changes but insignificant.

It's the CEO that made the call to change the terms of the loan, to protect there position or what ever it was.

P.s. Peter I tried calling your listed numbers, though they say they aren't connected?

 

Wow that's an interesting one. Until you've got an actual loan contract in hand, its probably difficult to claim any legal action (although I have very little idea on this, perhaps a solicitor has more of an idea here).

In terms of options moving forward - this will land in one of three baskets. We've been doing quite a few in the latter two for local developers as funding for this type of deal has become a bit trickier over time (borrowing power restrictions mainly):

• Mainstream type lender, similar rates to what you've mentioned, probably a little bit higher. NAB, St G, Bankwest, RAMS, Heritage (I think) etc to name a few generally are ok with 3 on one constructions. Some of these will have different restrictions associated with titling the property. Given what you've said, this is probably the starting point and seeing what options exist here.
• Non-bank type resi/commercial funding. Higher rates, more flexibility to get the approval though.
• Private lenders. Much much higher rates, usually there's always a solution here. Ranges from do-able to shark loan rates (2% p.m is not uncommon).

First step is to:
- Run borrowing power with mainstreams & ensure equity position is there to get it done.
- A lot of lenders will rule themselves out by not allowing three on one title constructions. So then it's about lender choice. If you're borrowing power fails with mainstream lenders, its probably going to be the same across the board with competitor calcs given the similarities between them (if its close, there should be a solution there).
- You're probably on the right track for this one, looking to talk to a development savvy broker.

 

Person I know got his deposit back without loan contract in hand. He won the battle with just email trail. This was big 4

 

Interesting - thanks! I assumed all the fine print/subject to clauses on conditional approval letters were designed to protect the banks for cases like these.

 

Some interesting stories are starting to emerge with the banks being overly generous. I was recently told first hand that an investment loan debt was entirely forgiven on some really badly performing properties. The bank hadn't actually done anything wrong, just bad luck and timing.

It makes me think that the Royal Commission had some sectors of banking rather worried about further customer complaints.

 

I find that ridiculous and banks should fight those sorts of claims tooth and nail.

I guess it's any further bad publicity they're wanting to avoid.

 

Why? The bank made a business decision to do it. What's the issue?

 

I understand they made a business decison. The ridiculousness is not with the bank, but some of the claims.

 

Yeah I'm sure the bank weighed up the pros and cons and did what it felt was best for them. Assuming the bank did no wrong doing, I just can't stand how some ppl have the audacity to happily borrow the money then when it doesn't work out they cry foul play . But like you said, Its impossible to know for sure without all the details.

 

I wonder if the bank applied the GRV value instead of the discounted/adopted amount. I have yet to find a lender who will use GRV for a in one line development under resi. Perhaps this is why they are trying to push this towards the commercial channel?