Don't write-off going direct

Discussion in 'Loans & Mortgage Brokers' started by Eddie, 14th Dec, 2016.

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  1. Eddie

    Eddie Active Member

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    Good Evening Folks,

    Sharing this as it may help some.

    I am currently attempting to source a loan for an IP; two separate mortgage brokers informed me to forget the majors, one noted that I'd be lucky to score $40K so was recommending Liberty, the other pretty much wasn't interested despite having set up previous IP loans for me, message was they are not going to loan to you in your current situation.

    Anyway, going direct I have been informed today that I'm good for $435K based on my current situation which at the moment has a temporary handbrake on it. This loan is more than enough for my purpose.

    Just found it interesting since I'd been kind of conditioned to think that brokers could turn tricks that I couldn't. Not sure what the go is. Maybe banks trying to cut out the middleman, maybe better commissions from Liberty. Don't know or really care but just want to preach the moral of this - if you are having problems trying one way don't let your preconceptions stop you from trying every alternate route - ask and you just may receive.
     
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  2. Jess Peletier

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

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    Liberty does not pay better commissions. The opposite actually.

    $435k is a massive difference so it makes me think there's been an error either by the brokers (unlikely considering they both came to the same conclusion) or by the branch.
     
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    I posted on exactly this topic earlier today on a closed broker forum

    there are many circumstances where we will suggest a client goes to a lender "direct".

    Mobile lenders and innovators tend to have better serviceability calcs and connections than their branch or broker family, even though all are governed by the same NCCP regs.

    ta

    rolf
     
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  4. Foxdan

    Foxdan Well-Known Member

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    @Rolf Latham - what "circumstances" are better to go to the bank directly?
     
  5. tobe

    tobe Well-Known Member

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    Sent a client direct today. Bridging no end debt.
     
  6. Eddie

    Eddie Active Member

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    Thanks Rolf.

    Good to know that. I actually work for a major bank myself - not the one I got the loan from though :)

    Anyway, they area huge multi-channel beasts with many departments each with their own KPIs etc. Definitely aware you can get different answers depending on who you talk to or channel you go through. I'm not in the home loan area but goes to show things are no different there. Unsurprising.
     
  7. DaveM

    DaveM Well-Known Member

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    Was this based on an actual credit assessed app or just the calculator the sales droids plugged numbers into?
     
  8. Eddie

    Eddie Active Member

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    Hey Jess, Want to let you know didn't mean to make that sound like mortgage brokers are only after commission etc. I've read your posts, you seem really cool, provide great insights so I'm sure you and many others are far from that.

    Maybe there has been a mistake, however re. the bank I received two verbals from two separate bank employees on different occasions (both $420-$440K range) and was thinking the same then send in the doc's and today received the formal $435K. Do have other loans there so pretty sure they have an accurate view.

    Not saying abandon brokers and go direct. Just saying don't stop when told no, kind of like people who are told they have a year to live and still around 20 years later - don't give up I guess.
     
  9. albanga

    albanga Well-Known Member

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    Something not adding up here.
    There is zero chance the broker and bank are plugging in the same thing.

    If their is a 400k difference then APRA should be made aware of this as it would be a monstrous gross misconduct.
     
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  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    at least 2scenarios

    when you have existing lending with lender X, and broker suggests lender y, and if serving is close but not quite there with x, then x can be worth a punt

    when more than a couple of experienced brokers have said no way..................one may end up with a lender that calculates things quite differently than is expected .....................

    ta

    rolf
     
  11. Jess Peletier

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

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    All good - there's no doubt many brokers who do chase the highest commissions :)

    It's still odd though, I'd love to see the two calcs being used. I know that in some circumstances going through Private Bank for eg can get a better result when servicing is tight but this is usually reserved for the rather wealthy. I've had it personally on a couple of occasions where clients didn't service with me, but got approved in the branch and this is frustrating - like @albanga suggests, if APRA is in control of our calcs the lenders 'should' be using the same ones.

    Either way - glad your deal got done! :)
     
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  12. BeefEater

    BeefEater Active Member

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    Similar thing happened to us towards the end of 2015 early 2016. 3 different brokers said due to our situation we weren't able to get any new loans so we went direct to one of the big 4... was able to buy 2 new IPs at the beginning of this year from doing this.

    Also in 2014.. one of the big 4s rejected our application for a top up due to serviceability. Broker got the bdm involved etc but this dragged on for a while and still didn't get the result we wanted. Against the advice of our broker, we wanted to go direct to another big 4... who apparently had a much harder serviceability calculator than the one we got rejected from. Within a week we were signing new loan offer docs for the refinance...

    Currently using a broker from this forum which I prefer, but as the OP mentioned, sometimes not giving up and going direct can pay off big time.
     
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  13. Simon Moore

    Simon Moore Residential & Commercial Mortgage Broker Business Member

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    Don't discount just straight out fraud by the broker/banker. I have a real estate agent that sends me heaps of clients, he sent me a client that had an offer accepted on a property, <$60,000 salary, ~$400,000 existing PPOR debt, wanted to borrow ~$500,000, rental of $420p/w. No way this would work, even with Liberty. She was also an immigrant to Australia and didn't have any friends or family that could go on the loan with her etc.

    I tell my referer he has a dud and to keep the property on the market, three weeks later and she comes through with a formal approval... Didn't I have egg on my face... So I waited for the property to settle, did a bit of digging and found out the broker had been a NAB banker, operating for 2 months before this happened AND the loan was through NAB (very convenient). He happened to be a Connective broker so I reported it to the relevant people, they won't tell me what happened for privacy reasons, but I can tell from the ASIC register that they're no longer a credit rep, and I won't be surprised if they end up in front of a magistrate.

    My guess is that they doctored the payslips, and my guess would be he learnt that skill from working at NAB. But this is just wild conjecture. Whether it was the right call to report it is disputable, I'm not sure how I feel about it even now, I think my decision was made easier by how blatant it was. It's not like she needed an extra $50,000, if that property was ever vacant, even at 4% interest rates she would have almost $0 disposable income.
     
    Last edited: 15th Dec, 2016
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  14. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    There's a possibility the brokers miscalculated - but I doubt it if the two came to the same conclusion.

    There's also a possibility that the banker conveniently left off some liabilities on the application. I've seen it happen.
     
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  15. albanga

    albanga Well-Known Member

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    There is no "possibly"...that is what has happened. Come on people let's call a spade a spade here please.

    Two possible things have happened here:
    1 - The borrower has gone to two brokers who have both said NO more, perhaps they advised the reason maybe you can't lend is because of those 2 car loans?? Perhaps the borrower has then gone direct and maybe decided to leave off that liability when discussing?

    2 - The borrower told the lender everything they told the broker and the branch lender trying to hit some KPI's decided to leave out these car loans. Hey maybe they are ending in 6 months so no harm done right??.....

    But let's not beat around the bush, their is some straight out fraud here.

    I would give this situation the benefit of the doubt with 1 broker, but 2 coming to the exact same conclusion.....
     
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  16. albanga

    albanga Well-Known Member

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    You did absolutely the right thing. If an athlete is not allowed to take steroids to enhance themselves in their profession then someone in finance is not allowed to doctor payslips to enhance themselves.

    Here is the difference though, an athlete will usually only effect themselves. This rogue banker has put someone in a loan they have zero capacity to pay. What is going to be the outcome here do you think??
     
  17. Corey Batt

    Corey Batt Well-Known Member

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    It's amazing what you can do by not disclosing some credit cards, car loans and leaving the dependent wife and kids disappear off an application!
     
    Last edited: 15th Dec, 2016
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  18. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    On a side note just because one particular lender will approve a loan it doesn't mean the broker should always recommend it. Crazy idea I know but the responsible lending rules we all operate under dictate that every step in the chain must make a call on whether a loan is OK not just the lender. So in theory the brokers may have just been more risk averse than the lender in this case.

    Back in the real world for a sec though if it fits a banks policy (even if a quirk that no other lenders have) the broker will write the deal 99% of the time so you have to wonder if 2 of 3 people who have seen the application don't think it works then it doesn't smell very good for old mate at the branch especially if the difference in capacity was $400K. The most likely scenario is a something was omitted to manufacture the servicing that wasn't there.
     
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  19. Terry_w

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

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    I had one of these recently. Serviceability was about $1.3mil and the client has just received approval from the same bank for $2.7mil by going thru a private banker.

    I will let it settle and the ruffle some feathers.
     
  20. tobe

    tobe Well-Known Member

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    I don't think anything was omitted, it was the handbrake being released, referred to in the OP. The handbrake could well have been some credit cards/consumer debt being repaid, or perhaps it was divorce from the mrs and kids. It could have been simply a belt tightening in declared living expenses.
     
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