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St George bank no longer lending to hard working Aussie expats

Discussion in 'General Property Chat' started by Dean Collins, 2nd Jun, 2016.

  1. Dean Collins

    Dean Collins Well-Known Member

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    Nice one St George Bank ….. :( just found out that they’ve changed the rules on your portfolio loans and that they are no longer offering ANY loans to Australian expats working overseas so even though we’ve paid down our mortgage over $A110,000 over the last 12 months they will not allow us to purchase an additional investment property.

    Oh and because we’ve locked in some of our loans until 2020….cant release the equity in order to refinance anywhere else either.

    I’ve always heard about Australian banks being @sholes when the going is tough……we’re doing great and paying down our mortgages every month like clockwork an additional 10k off the principal over and above regular payments only to find this ******** about how ‘you’ve changed your mind but we’re locked in so cant go to the competition’.

    I’ll be making sure everyone is aware of what a raw deal St George is giving to Aussies expats working hard overseas so they dont get caught in the same situation as us.

    Bring on 2020 asap and we’ll be taking our business elsewhere.

    Ref #4233486
     
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  2. sanj

    sanj Well-Known Member

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    tough break but if you chose to pay down your mortgages instead of putting the money in an offset the mistake is yours not the banks.

    also, hard working has nothing to do with it, it's a broad policy change
     
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  3. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Hey Dean,

    Im in no shape defending the dragon but this decision is at a Westpac group level and its in response to massive fraud detected with a lot of Chinese (mainland china) based applications and brokers.

    A lot of the other lenders have followed suit - many have exited the market altogether. I think they will come back once the dust settles.

    Westpac and St George had policies which were way too lenient - they were accepting minimum docs and not even doing employment checks. Unfortunately this has resulted in a blanket policy update affecting expats.

    There are other lenders like CBA that have excellent expat policies however as you say you are locked in.

    Have you enquired about the break costs?

    I truely think these lenders will change their policies but I think it will be a few months before that happens.
     
  4. Dean Collins

    Dean Collins Well-Known Member

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    Hi Sanj, We can still draw down on the variable loans, that's the whole reason we signed up for portfolio package in the first place.

    The problem here is that St George are now no longer allowing us to setup any further portfolio sub accounts (and you are right in that its all Westpac and all their affiliates) so that means we cant access the equity that's been built up in the existing properties over the last year (or at all moving forward until the last fixed loan is free and able to be paid off in August 2020).
     
    Last edited: 2nd Jun, 2016
  5. Dean Collins

    Dean Collins Well-Known Member

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    Hi Shahin,

    Income is fully documented, national USA based firm, fully documented 'c-suite' salary + 20% bonus, 7 years in the same firm etc, the issue here is a blanket policy on all non Australian income.

    The irony is that I've been a major cheerleader for them in the expat community here in New York and told more than a few people who signed up for the St George Portfolio Loan product based on how happy we've been over the last 4 years with the process each time we purchased a new investment property.
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    A lot of policies are negotiable but this one isn't - can I ask why you didn't do the equity release before fixing?

    Do you think you can hold out for another few months? There are no guarantees but my feeling is that they will ease their policy in a few months.

    I think there is scope in a few months to ask them for a policy exception based on your history and assumably exemplary loan conduct.
     
  7. Dean Collins

    Dean Collins Well-Known Member

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    Because the whole nature of the St George Portfolio Loan is meant to be that each time we purchase a new investment property the equity across all properties is considered eg capital growth on all existing IP's + the $A110,000 we paid down this year.

    We were really happy with it.....until now :(
     
  8. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Sounds like you are talking about cross securitisation and thats a really bad structure (for you) but great for the bank - I think this is partially the root of your problems.

    Did you set these loans up yourself or did you do it via a banker/broker?
     
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    the normal risk management wake up call :(

    ta

    rolf
     
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  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This is a terrible set up.
     
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  11. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I wonder if they would let you do a substitution of security so you can uncross everything. That may be worth doing even if you are locked in with fixed rates as you could then move lenders if you need to and move in stages.
     
  12. sanj

    sanj Well-Known Member

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    exactly, user error not bank error.



    @Dean Collins st George might have done you are huge favour if it means you realise what a crap deal you had, maybe send them a thank you card instead of angry letters. you might get a few angry letters from the people you recommended the deal to though
     
  13. dabbler

    dabbler Well-Known Member

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    Save your breath Dean, they are all a bunch of inbred nongs down here, they have been giving away money to people who should not get it, all while a bunch of people, even on this forum, been saying locals should be dobbed in if there is anything exaggerated even if they can easily afford what they want.

    The problem is, they are all running scared at the moment with possible investigations, they have not been fair dinkum or looked at each case on it's own merits for donkeys ages.....

    Just look at the recent cuts and the race to announce the full cut, well, some of us been round for a bit and can smell BS before we walk in it, they would not have passed on a cent if it had of been a new govt 3 months ago, they are reacting at the moment, and as many are so big, they are like a confused Goliath, give all some time to see reason and post election, see what the go is then.
     
  14. alexm

    alexm Well-Known Member

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    Why can't the original poster borrow money in the US from a local bank? There are are good products over there in the states. Obviously FX risk comes into the picture.
     
  15. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    They probably can, but the security in this case is in Australia
     
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  16. Bayview

    Bayview Well-Known Member

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    Might have been nice for the Bank to suggest this structure before hand; in the best interests of the Customers future wealth creation plans...

    Oh; wait....it's a Bank.
     
  17. Dean Collins

    Dean Collins Well-Known Member

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    We actually did have this for our first IP, we moved to the Portfolio Loan as the way it was described to us would be less hassle each time we purchased a new IP AND you can use the equity across all IP's......lol or not as it turns out :)
     
  18. Bayview

    Bayview Well-Known Member

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    This immediately reminded me of the scene in "The BIg Short" where they found out that the Bank loan assessors were rubber-stamping these Liar Loans, which had in turn been fabricated by the MB's (those two guys down in Florida were the example)...without checking any of them.
     
  19. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Sales talk.

    They tie you up so you cannot easily leave!
     
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  20. dabbler

    dabbler Well-Known Member

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    Have not sen the movie, but you can tell they are acting to prevent scutiny....i.e....look what good guys we are to customers.....and look how tough we are to loan money out......... (for all of 5 minutes), we are excellent self regulators.