Man Loses 67k Deposit due to Lending Changes

Mentioning Mabo wins any case. Didnt ya know?

 

Yes, FOS are really a waste of time as they are on the bank's payroll but my understanding was that they were a part of the process so you could show you have gone to them first etc but they didnt really help

 

Maybe just your case was unfortunate -, I have got FOS cases on St George, Westpac, American Express, ANZ and have all been ruled in my favour (though this is more on charges and services).

 

Whether the banks will honour their word or not is irrelevant. The law disallows them from lending the money based on their assessment a few years ago.

Lenders are required to reassess the loan (I think) 90 days after the initial application. After 90 days they have to get more payslips and other documents and reassess under their current credit criteria. These days most lenders are taking the strict interpretation that the pre-approval application is cancelled and a new application must be submitted.

In order to keep regulators (our friends at APRA) happy, most lenders are now asking for updated payslips after 6 weeks.

 

If they bought off the plan 2-3 years ago I would have thought they should have been able to sell their appartment pre-settlement?
Hasnt Melbourne seen pretty good growth in the last few years? I would have thought they could sell, and even pocket a bit of extra, on top of their initial deposit?

But overall just a nice bit of BS sensationalism 'reporting'.

Blacky

 

No it is very relevant

If someone gets a loan and both parties understand the circumstances by which that loan will settle and yet the bank decides to approve the loan one day and disapprove it another day, in the best case scenario it is unconscionable conduct.

I understand if it is a policy issue and of course whoever makes a policy and doesnt exclude people who have made a decision prior to that policy taking effect and will be impacted by it, is a clown and should be fired. But to say that whether the bank will honor their word or not is irrelevant, they are at the forefront of dealing with customers. How would anyone be able to get a loan with a longer settlement time if whether the bank can honour their word or not would be irrelevant? Would you leave a deposit if you thought you could lose it?

 

I think your confused.

It is well discussed here why many of us do not deal with OTP. I am not sure why you would skip those discussions then try and tell us we are all wrong.

So I think your being ignorant & do not get it rather than me, if I were to buy OTP, I would make sure I have plenty of cash reserves and multi lender options......not just plan A or go home, indeed, get this, not once in 3 decades have I ever, ever, even considered OTP, how about that ?

So maybe one day you will get it. If you walk into a lions cage without thinking about what could happen, then you deserve to be eaten I guess, or mauled, I mean that is what happens in the wild, not start legal action with no real basis.

In saying all the above, does not mean I am not sympathetic though.

 

@Tenex it's not a policy issue from the banks, it's a legal issue legislated in 2011 by the government and enforced by ASIC. Therefore the banks desires are irrelevant, it's a matter of law.

As a broker I'm frequently telling people that lenders are not obligated to honour pre-approvals and the risks around long settlements especially with properties that don't exist yet. Despite this people put deposits on OTP properties and proposed land sales all the time.

I haven't personally had a deal not get finance yet, but I have had a couple of very close calls, especially house and land packages with first home buyers and high LVRs. OTP developments tend to have valuation issues but we can often work around those.

 

You think wrong.

I am pretty sure anyone can comprehend that I am asking a hypothetical question. Did you not get that and decided to instead say I am confused?

I asked you a very simple question, you didnt answer it and instead decided to muster up a "many of us" vs "you" discussion.

We are talking about an off the plan here. Which means a longer settlement. In this case a policy change at national level has resulted the bank withdrawing their original approval. How your multi-lender option would have made any difference?

 

It may well be a policy (or lack thereof) matter but the banks arn't innocent. In many cases they use this as a loophole to get away with certain things.

I cant talk for your customers but I wasnt necessarily referring to pre-approvals. Pre-approvals in most cases arnt worth the paper they are written on and in my experience can be had quite quickly with very little vetting.

I am talking about unconditional or even conditional approvals that are later pulled for a variety of reasons.

Whether its a bank issue or policy issue it must be fixed. Otherwise unless if a customer knows for sure that they are able to get the loan, then effectively no one can leave deposit on anything. Therefore either the customer shouldnt be approved to get the money or there has to be a certain degree of security around that loan.


In any case, it is virtually impossible for the average person to go and read up on policy. Therefore what the bank says must carry a certain degree of confidence otherwise no one could ever buy anything, especially if it requires a time-gap.

 

Please pardon the rank beginner Q MTR but what is/how do you have a plan for if finance falls through?

 

I am going to go with your view, am going to apply for 10 loans tomorrow and sue any who do not complete the offers 2, 5 and 10 years from now ignoring the offer date and any policy at the time......

Ta

 

Otp isn't a contract with a long settlement. It's a contract with a maybe settlement. Maybe it'll get built. Maybe it won't. If and when it does you owe us the rest of the money. If it doesn't by the sunset clause date we refund your deposit and sell it to someone else.

A pre approval isn't an approval for any particular property, it's an approval subject to finding a property, and it's valid for 3 months. No pre approvals, reference an address.

 

Anyone surprised that broad sweeping anti-foreigner lending swings are hurting people who intend to be home owners here?

I suppose having one set of foreign rules for Chinese/HK/Asia and another diluted set for the rest of the world would incite claims of racism, Trumpism etc.

 

Not surprised, but it definitely affects those who want to be home owners here.
My sister is born here, but is married to a Singaporean and resides over there too.

If she wants to borrow, her lending is completely shot, the penalty on the conversion rate is massive. To borrow more she needs to put her husband on it and processes become more difficult. She's given a range she can borrow, but if its around the top end, the confidence of getting the loan approved is lower. In comparison, my brother who earns less but resides here, the loan is much easier.

Sister is just going to to hang back on the sidelines to buy until she decides to come back here permanently... trying to compete in the Sydney market is difficult with these extra conditions being applied.

 

If she's not living here and buying in Sydney I'm going to assume the purchase would be for an investment.

Post APRA banks investment appetite is limited, banks are choosing who to lend to for investment.

Unfortunately foreign income non-residence are not high on the list.

Might be a blessing in disguise for your sister having to sit on the side lines for a while in Sydney.

 

Maybe yes. Maybe no.
Sydney is expensive... maybe it will flatline for a while... question is when.

I've been waiting for it to flatline since 2015... how wrong I have been

 

I'm certainly not saying it will keep going up, but one can never forget places like Hong Kong. It reached stupid crazy nonsensical wtf levels...and then it bloody doubled again. Lol