Clawback Clause and Yellow Brick Road?

Discussion in 'Loans & Mortgage Brokers' started by 2020 Property Investor, 28th Jun, 2020.

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  1. 2020 Property Investor

    2020 Property Investor Active Member

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    Hi There

    Not sure if too specific, does Yellow Brick Road have a clawback clause for variable loans refinanced through a new lender (and broker) within 2 years (4 months until 2-year mark)?

    Looking to refinance and trying to figure out if would be penalised or not.
    I checked their credit guide from 2018 but I cannot see anything explicit there. Would this be the right place to look?
     
    2020 Property Investor, 28th Jun, 2020
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  2. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Did you sign a claw back quote?

    What's preventing you to reach out to the broker who helped you originally?

    Which lender? Some lenders only claw back if within 18 months.
     
    Property Twins, 28th Jun, 2020
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  3. 2020 Property Investor

    2020 Property Investor Active Member

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    I do not recall/cannot find an email related to the signing of a clawback quote.
    The lender is ING (Variable PPOR loan if that makes any difference).

    I guess the reason is I would feel awkward reaching out to ask them about the clawback since I am not going to use their services any longer (changing brokers)

    Would it be something to ask the bank directly?
     
    2020 Property Investor, 28th Jun, 2020
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  4. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    The document would be called a quote and proposal. It's different to the credit guide. You would have signed it before you submitted the loan.
     
    Jess Peletier, 28th Jun, 2020
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Some brokers get their clients to sign clawback agreements for much longer than the period that they get clawed back from the lender.

    But to clawback it has to be in a written contract
     
    Terry_w, 28th Jun, 2020
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  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    No



    Clawback deets for ING below

    ING Direct
    • <12 months - 100%
    • 13-18 months – 50%


    so if your loan is 18 mts and one day when it settles the broker will get to keep their comm.

    ta
    rolf
     
    Rolf Latham, 29th Jun, 2020
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  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Standardisation of business process I expect..

    A few lenders Have clawbacks to 24 mths, while others have utilisation clawbacks as well

    I would think that a quote specifically for clawback is only enforceable where an actual clawback happens.

    ta

    rolf
     
    Rolf Latham, 29th Jun, 2020
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  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    One of my clients has signed a 3 year clawback once.
     
    Terry_w, 29th Jun, 2020
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  9. 2020 Property Investor

    2020 Property Investor Active Member

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    Wow....sad for them!
     
    2020 Property Investor, 29th Jun, 2020
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  10. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Not enforceable.
     
    Marty McDonald, 29th Jun, 2020
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  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    It would be where a clawback outside of the usual 2 years takes place.

    ta
    rolf
     
    Rolf Latham, 29th Jun, 2020
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  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Even if one had a 10 year period on the quote, its not generally relevant for 98 % of resi lenders in OZ, whose clawback period falls in the 18 to 24 mths window.

    ta

    rolf
     
    Rolf Latham, 29th Jun, 2020
    #12