Man Loses 67k Deposit due to Lending Changes

Something to mull over.....you will see lots of these in the coming months....

Aussie expat loses $67k deposit amid crackdown on ‘foreign’ buyers.

 

I think the biggest nugget here is OTP, not the banking changes per se. It again highlights the dangers of signing up for a world that may look very different in 2-3 years time.

 

Nothing to do with OTP...the guys is an OZ citizen....but policy changes makes him ineligbile for the loan

 

Well, I think they may have been able to find a way, even if it meant getting a job here.

What I find odd, is I know locals who were OS working, and they just come back and expect to get a loan to buy, I mean do adults with young children, or just adults for that matter, have no concept of planning such things ?

 

And the issue was that the loan was in his British partner's name.

 

Also I have seen many people buy at auction, clueless as to how auction differs too normal sale, then they panic and run around for months trying whatever they can to get the money, which they do in a rising market normally, but you can get caught out in flat or falling market (that Mel units prob are part of)

 

Agree, Pre approvals are not a guarantee tou will get the loan, always need plan B.

 

And a further issue of there would have been no sort of offer even on the table at settlement time, but they just assumed all would be rosey.

To be fair, I think they could have been given a wave through on getting the loan as they were coming back and one a resident.

 

As soon as I saw the title of this thread I thought OTP.

2-3 years is a long time...

 

Misleading title. Should be

Aussie expats' British partner loses.....

It even had to pass the Foreign Investment Review Board so obviously not a purchase by an Auss citizen. Duhhh

New.com.au has too much click bait

 

LOL

The property expert, scanning the internet on daily basis to post these kinds of articles. Bonus points if the article also mentioned Sydney in it but unfortunately for him it didnt. He also adds his own expert opinion at the end "you will see lots of these in the coming months dot dot dot".


This article is nothing new. A similar scenario happened to me about 2 years ago. I sued the bank and we just settled outside the court.

This is nothing new. Its because our banking system is extremely regulated on lending criteria but extremely loose on how banks can offer their products, what they can say to the customer and basically how reliable their word might be. The last change that happened in this area was the waiver of exit fees which goes back a few years.

These people have a very strong legal ground to take action. Clearly at the time they left deposit the policy didnt exist, they didnt have access to a psychic to read the future and therefore they shouldnt have been impacted.

“While we can’t go into the details of any customers’ circumstances, ANZ only provides full loan approval for off-the-plan dwellings once the building is completed. Prior to that, we can offer approval in principle, which is subject to change,” the statement said.

Clearly this shouldnt be allowed. You cant offer approval on the basis that you can take it back if you decide to do so because people are going to act upon it.

 

What area of law would they have an action? The vibe?

 

Yes they can, because the security may not be suitable, or may become unsuitable, and things change, so they tell you the indication has an expiry, it is not an invite to sue if things change.

Your outlook would probably change if it was your money and you were lending it out.

And it was not the banks who decided to stop lending in this type of situation, but I do think there should be allowances for certain cases.

PS will keep an eye out for when it starts happening in Sydney

 

I hope you are kidding right?

Lets see what happens in another 2 years....your case might been simple...but things like you can't afford to pay due to interest rate rises or changes in policies..the banks are covered from a legal view.

Ole sayin'.....you can put an old head on a youngun'

 

Said policy is more likely to change in 2/3 years timescsle vs. 6 weeks though. So OTP is big factor here.

 

Very serious, I dont like to kid.

My case was anything but simple and it took nearly 2 years to achieve an outcome.

When a bank enters into a scenario such as this one where it is clear that the property is being purchased off the plan which means the settlement date is at some point in the future they need to either not approve, or commit to their word. They cant approve and then play dumb later.

I can PM you articles about Sydney and you can tell tall tales on here about how things are changing and what not.

 

Ok, let me ask you then.

If right now you were in the market trying to buy an off the plan property, you would be smart enough to know that an off the plan property will have a settlement date at some point in future right? You would hope your bank would also be smart enough to know the same.....

Now if the banks said, yes Mr Dabbler, go ahead and leave your hard earned deposit BUT we may or may not give you the rest at the time of settlement (meaning you could lose your deposit) will you be insane enough to leave the deposit? Will anyone ever buy anything with a longer settlement (be it off the plan or not) under those conditions?


I hope it is starting to make sense to you.

 

Those who bought OTP a fews ago face a very different environment

NSW / Vic Duties and Land Tax
Lenders who dont lend offshore
Lenders who have policies to lend at a lesser LVR
Lenders who may not recognise foreign income
Non-resident issues
Reduced availability for IO loans
Tax system that applies no CGT discount
Oversupply in some areas

OTP can be a punt for a resident or a non-resident. The banks seem to be removing themselves from the risk of taking a punt too.

 

Did you go through the Financial Ombudsman first?