Just scraped in for a refinancing (NAB)...you wouldn't believe why I was nearly rejected...

Apparently I was $300 a month short. My mortgage broker asked why...they said one of my rental properties received such little rent. My broker said oh that's because I only purchased it 3 months before the end of the financial year, which explains why there's only 3 months worth of rental income. The assessor apparently said "who's to say that won't happen again this year?". Ridiculous. This is in Sunnybank Hills, Brisbane mind you, not some mining town. It's not going to be vacant for 9 months. So he asked for it to be escalated and eventually they agreed.

Amazing I nearly got rejected on this basis...

 

You must have given them the end of year summary for the rental income instead of the monthly statement? The monthly statement is perfectly acceptable to the NAB (and every other lender).

You gave them bad information that makes the picture look very different from what it really is. They make their decisions based on the info they're given.

 

I just double checked the documents I sent to my broker, it was the tenancy agreement and a bank statement of all the rental deposits.

 

Monthly statements are usually whats requested rather than EOY statements. Where a rental is new, some will also work off a lease or an appraisal which I'm happy to provide as well.

 

Also the fact that they said "who's to say it won't happen again?" even after my broker explained it makes me think it had nothing to do with the info I provided.

 

Thanks for sharing!

Couple things would've happened most likely here:

1. Credit scoring would've deemed you a higher risk and required a higher delegation sign off. This means that there's more checks, higher authorities and a more risk sensitive approach is applied. Still that reason doesn't make much sense in any case. Common sense won out at the end of the day, but it should've started there anyway.

2. I suspect this may be a tightening of risk based lending from NAB. I suspect that they'll do more and more of this - they're likely getting smashed with business with their servicing calculator and are now looking for reasons to reject deals.I hope its not the case - i've got a handful in the pipeline!

 

Or, it could just be a weirdo assessor after a heavy night. You do get some odd responses sometimes.

 

bingo

I'm thankful to have the same assessors look at all my deals. Removes this sort of frustration when you've got competent assessors at the other end.

 

Is that an option brokers have with all banks or just a particular bank where you've managed to form a relationship?

 

Generally assessors are somewhat randomly assigned, but there are exceptions. It's also occasionally possible to have a good relationship with a particular assessor and get them to pick up certain deals. It can very much be dependant on the bank and how they structure their back office.

Providing a lease agreement with the NAB should never have had this outcome, I've certainly never experienced this particular problem under those circumstances with any lender. Sadly these sorts of problems occur all the time. There is a human element in loan assessment and humans do make mistakes. Fortunately the banks do have escalation procedures to which can usually correct these mistakes.

What's interesting with the NAB is that if the computer makes a negative decision, it's very hard to get it overturned. If a human makes a negative decision we can usually get it overturned (assuming they were wrong). I've generally found the NAB fairly good to work with on these things; I generally find myself agreeing with their decisions when they explain the reasoning.

I once had a deal with St George where an assessor had 13 outstanding items and she wouldn't budge on any of them. She went on leave and I asked an individual I knew there to look at it. That individual saw the deal for what it was and approved it while I was still on the phone.

 

Some banks make it possible to build a relationship with the assessors as they are assigned to specific teams based on state or segmentation. The assessors know what kind of deals you give them and what kind of operator you are and can help fight for you if you have a curly file.

Both STG and NAB assessors call you when your deal has been approved or they require clarification, so it is easy to build a relationship with them whereas ANZ and CBA when the deal is approved or they require more items they just send out a email confirming what is required and you barely have any interaction with the assessors.

NAB I know the assessors do not have the files indexed for them prior to picking up the file so I always make a good effort to package the deals nicely for them to work on. Contrary to belief, assessors are human too and if you give them a sloppy file, chances are that they are not going to put much effort in helping you approve the file.

 

Brokers can/do form different relationships with banks. If you do enough business with them - some will offer certain wanky statuses that get you special little privileges.

Cheers

Jamie

 

Agree same NAB Assessor for last 8 years which in itself is a record in this industry.

Cheers


Richard

 

1. Who chooses whether you're assigned a human assessor or a computer assessor?
2. Do some banks only do human assessors and do some banks only use computers?
3. What do most of the mortgage brokers here prefer when it comes to assessing - computers or humans?

 

1. Most lenders vet, or triage the deal with a credit score, computer, before its picked up by a human.

2. Some only use humans, the rest use both.

3. Each has their advantages, but generally speaking id say most mb would prefer humans. This is how the landscape was pre gfc mostly.

 

Most lenders have an automated system that vets every application as soon as it's submitted. Once this is passed, a human vets the application. There's no choice in the process unless it's one of the few lenders that don't credit score.

 

1. Its the lenders process - brokers will be aware of lender process. If we see a deal with 10 credit hits in 3 months, we're unlikely to want to submit it to a computer to assess.

2. As tobe said. Its Computers and Humans, or just Humans. Note that for NAB, the human process is often dictated by what the computer says. For a low risk deal, the credit assessor can approve the deal once they confirm the application with supporting docs. For deals that are higher risk but are not auto declines, they go to a credit manager for approval. So essentially theres greater level of oversight because the computer says 'look more carefully'. With NAB, as Peter mentioned, if the computer says no, its generally means no. You can rework and try and resubmitting, but it may not do the trick.

3. Prefer humans. Credit scoring can be a little unpredictable, even when all the factors are known and disclosed. Theres obvious ones that'll fly through (most cases), but then there's borderline ones that may go through that may not (e.g. 4 apps in 4 months). That may create a degree of uncertainty, as its like trying to ready the output of a computer. As brokers, we like to control risk and certainty is part of that.

 

Ive had a few similar experiences with banks. Really really dumb reasons for rejecting applications.

Ive had westpac reject applications for stupid reasons before. Things like, I earn more money from rent than my day job so they wouldnt lend even though it was only an 80% lend and their rent reliance policy only applies with lmi. Or the house needed a reno so wasnt good enough to live in or lend on (again 80% lend). Or the last one which was a combination of because I had a hecs debt and because I am rent relient (again 80% lend).

I just successfully refinanced to BOQ on the deal westpac rejected. Got a 3.99% rate with BOQ too! Which is awesome.

I had the local westpac bank manager ring to ask me to stay with westpac. Told me all the reasons my application with them was rejected, were wrong and that theyd gotten their policies wrong. Begged me to stay, offered to match the 3.99% rate, even offered a $3000 rebate and said he would get me the full refinanced amount... I told him a bird in the hand was better than two in the bush. It was so satisfying being the one doing the rejection for once

 

This reminds me of a few years ago when I got rejected by CBA (who I have been told have now cleaned up their assessing system).

I had just sold my PPOR and had pocketed a nice little sum of cash which meant my next purchase would be at around 75% LVR. I was borrowing wayyyy under what I could, had a stable job, good savings etc, buying in a decent area, decent apartment etc.

You can imagine my shock when I got rejected. When I asked why I was told it was because my Dollarmite account (which was still open but not being used) had been overdrawn twice over a couple of years.....by $5- the amount of the monthly fee- as I wasn't using the account, there was a couple of times where it fell below $0 (into the $5-$10 range...for the monthly fee)