Westpac plans to 'dump' risky property investors as rates rise and returns fall

Banks give them a month to find new lender
They now want to pass the bucks on risky borrowers
Westpac plans to 'dump' risky property investors as rates rise and returns fall

 

Its probably not that widespread. The borrower who cant meet repayments may trigger the review.

This is how banks have always dealt with over commitment. They will look at the overall assets and capacity to service and sure they can demand repayment. Commercial loans have been like this for decades.We just havent seen a lot of it for investors but the IO commitment cliff some seem to face could be a trigger.

30 days seems short. Commercial loans are often 3-6 months

 

Wonder if this could be some of the thousands of fraudulent loans they have on their books.

 

Wow - didn't realise this was possible.. Having to find new financing in less than a month!

Friend of mine got one of these letters.

Mortgage brokers - how are you helping your clients in this situation?

Good luck everyone.

Westpac plans to 'dump' risky property investors as rates rise and returns fall

 

Jeez. Just read the AFR article Id love to see this letter.

 

Westpac Group, the nation’s second largest lender, is giving risky property investors less than one month to find another lender amid growing concerns about the impact of rising rates, falling values and oversupply.

The bank is sending single page letter to investors warning it can “no longer support our commercial relationship with you”, adding it will work with the borrower to help them find a new lender.

Victor Kumar, a director of Right Property Group, a buyers’ agency, who has seen the letter sent to property investors, said: “This is of concern because they have used the banking system to get these loans.”

The brief letter informs the borrows Westpac is a responsible lender, claims it can no longer support the relationship and volunteers to help them find another lender, he said.

 

Where did you get this information?

 

Agree - I'd also like to see this letter.

 

AFR - Westpac plans to 'dump' risky property investors as rates rise and returns fall

 

What actually happens? Are you forced to repay your loan early? I would have thought they could only onsell your loan and force you to be with another lender.

 

Ouch if true but this is an odd statement from the article.

Sending multiple letters out but not able to immediately find them? Hmm, something seems wrong there.

 

Multiple threads

Westpac plans to 'dump' risky property investors as rates rise and returns fall

 

And since they have all increase the interest rates how you mentioned to qualify with then

 

I have a hard time believing this is true.

 

Quite possible its all a beat up
On the other hand how do you deal with clients that have been possibly quite dishonest in their dealings with you, and have borrowed way to much money .
In some ways it amounts to Fraud.

 

I'll have to check the mail box, I have a Westpac loan. I also haven't had any panicking calls from the many clients who have Westpac loans.

I can't imagine why they'd do this for a residential investor or how they'd enforce it. If you're making your repayments they'd have little reason to demand you refinance and it's virtually unenforceable. The best they could do is increase interest rates.

I note that the article uses the term, "Risky property investors". Perhaps they're referring to all the fraudulent loans they knowingly assisted in funding, mostly for foreign investors.

 

Date check - not 1st of April.