Westpac refusing to refinance expat loans

Discussion in 'Loans & Mortgage Brokers' started by Dean Collins, 19th Oct, 2017.

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  1. Dean Collins

    Dean Collins Well-Known Member

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    Yep was very surprised at their attitude, eg we never got to serviceability levels etc.....just a blanket NO.

    And yes we are an existing Westpac customer eg one of our IP's is currently in year 2 of a 5 year fixed with them.
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    It might be possible to get St George to match the Westpac rate, but your chances or refinancing to any lender with similar fixed rates to Westpac is very slim.
     
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    The bank(s) made a product choice to cease dealing with customers in this area. Just like most banks are selling their financial planning and insurance arms. They will run down the book and that means little or no changes will be allowed. I believe APRA took the banks to task as they had little to no idea about what their overall exposure was and I believe many bad loans may have been approved on basis of overseas income which cant be reliably ascertained. The banks also seemed exposed due to developers promoting loans which seemed to have been given poor diligence.

    Westpac withdraws from real estate lending to foreigners
     
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Dont know about bad loans per se ( coz you dint know till they fall over) but some of the income check work was likely to be at least partially flawed in the translation process, and wbc does have a larger than average proportion of foreign income loans.

    They are still a good fit for many Expats............

    ta
    rolf
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Bad in the sense they didnt verify income, not loans that are bad - yep.
    Must have been bad position for the banks to pull out. Banks will make a market in almost anything -

    These loans are almost a limited recourse loan in many ways. No way the RBA or APRA want to fund a bailout.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    very good point on the limited recourse.............

    ta
    rolf
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    Westpac and ANZ got taken to task for non-verification of income on foreign loans about 18 months ago I think. ANZ made the comment that they'd been made aware that it was discovered that a large number of loans had potentially fraudulent income evidence. They noted that they had no concerns about these foreigners not being able to meet their mortgage commitments.

    In other words, they'd profiled this market segment and determined that these people had money, they simply couldn't prove it to the satisfaction of the Australian standards. They looked the other way on the Asian investors. Then the banks got caught not doing their due diligence, which is effectively breaking the law.

    The net result is the banks are all scared of loans from anyone not living in Australia. Whilst their policies still say they'll write these loans, they'll do anything they can not too. There are certain circumstances where even if everything stacks up, the assessors are under instruction to find a way to decline the application.
     
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  8. Maadha

    Maadha Well-Known Member

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    So... If I am about to move oversees for 5 years at xmas and currently have a fixed term IO loan about to expire... What are my options?

    TBH - I read so many thing here and elsewhere that it is hard to know what to do? Obviously re-financing now before I leave in 4.5 weeks is critical but do I fix for 5 years, try IO again, or go to P&I?

    Is there a broker out there who can assist and has experience in this area who could help me given the tight time frames I'm working with?

    (sorry to hijack thread but it seemed very relevant to my search)

    Thanks in adv.
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You could try to refinance and extend the loan term back to 30 years.
     
  10. Dean Collins

    Dean Collins Well-Known Member

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    Not hijacking the thread at all - very pertinent to you.

    Yes lock in as long as possible with your current lender as rates will be very different in 3-5 years from now and be tougher to arrange financing.

    Lol when you tick the box that says....do you know of any immanent changes that may affect this loan.....
     
  11. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    get it done now............. the income shading and potential other issues may mean uou get stuck with PI, which might be ok for you ?

    ta
    rolf
     
  12. Maadha

    Maadha Well-Known Member

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    Thanks Rolf,
    Will give u a call. ( if taking clients?)