ANZ LMI policy tightening

[tobe]

Just thought I'd share a recent conversation I had with an ANZ LMI assessor yesterday. It was a major shock, no wonder their turnaruond times are 2 weeks.

I work for a major builder in Melbourne, most of my clients are first home buyers, and almost all are building because they dont have the deposit to cover stamp duty etc for an established home. Anyway, I had a single applicant, a registered nurse, no liabilities, in the industry for 5 years, same job for 9 months, 95% lend, qualifier had a surplus with the ANZ's sensitised rate. I did not expect a decline. The assessor said there had been no change in policy, just that now LMI would make more use of their discretion in assessing risk. As there was no genuine savings (banks used to insist on seeing genuine savings for FHB's up until about 2 years ago), the client had no existing relationship with ANZ, and 'no credit history' (becuase she didnt have a personal/car loan or credit card) and although the loan serviced, the assessor would like at least $100pm per $100k borrowed as surplus. I was gobsmacked. I think I will be refering to pre-13th November, when I did lots of business, and post 13th November when it got harder.

This is going to be really painful, FHOG is up, rates are down, so I was getting a lot more enquiry from first home buyers, but if LMI are going to tighten credit like this, it wont be until the governments FHB savings plans start to come through in 4 years till I have any business again.....

 

[joe jo jo]

Just thought I'd share a recent conversation I had with an ANZ LMI assessor yesterday. It was a major shock, no wonder their turnaruond times are 2 weeks.

I work for a major builder in Melbourne, most of my clients are first home buyers, and almost all are building because they dont have the deposit to cover stamp duty etc for an established home. Anyway, I had a single applicant, a registered nurse, no liabilities, in the industry for 5 years, same job for 9 months, 95% lend, qualifier had a surplus with the ANZ's sensitised rate. I did not expect a decline. The assessor said there had been no change in policy, just that now LMI would make more use of their discretion in assessing risk. As there was no genuine savings (banks used to insist on seeing genuine savings for FHB's up until about 2 years ago), the client had no existing relationship with ANZ, and 'no credit history' (becuase she didnt have a personal/car loan or credit card) and although the loan serviced, the assessor would like at least $100pm per $100k borrowed as surplus. I was gobsmacked. I think I will be refering to pre-13th November, when I did lots of business, and post 13th November when it got harder.

This is going to be really painful, FHOG is up, rates are down, so I was getting a lot more enquiry from first home buyers, but if LMI are going to tighten credit like this, it wont be until the governments FHB savings plans start to come through in 4 years till I have any business again.....

Hey Tobe,

they are being told to send business away as they are beyond capacity and there is only one way to do it DECLINE.

There are plenty of other lenders out there and ANZ have increased their subs from external sources by around 70% (apparently) in the last 12 months.

Send em elswhere if you can (you might have to).

 

[Spectre]

Should I say I'm 'wary' about anz - and their 'delays'. 14 days for turnaround w/LMI deals is a bit much, along with their rate tightening, reductions with breakfree... signs are not good with them at present and they are definitely pricing the clients they want.

Non LMI - different story.

agree with JJJ.... use someone else or have a tactful conversation with your RM

 

[Rolf Latham]

Loans Prevention Officer

ANZ has never been a lender that you could do any curve ball with, even within policy sometimes, there is no grey. The good thing with that is you know where you stand.

Just recently I had a client who earns 250 k plus, is quite a senior bod in a large australian financial institution, has various degrees, and diplomas including a FP accred.

Lo and behold the assessor was pushing a letter from the clients "financial planner or accountant" as to where the money was to be invested.

I wanted to send them a letter from my clients mum in support of his application , but a letter from the 4 week trained H&R Block form filler was to be more valuable.

After a bit ( lot) of whining they finally relented and agreed the client was likely a "sophisticated: investor and would not need such a note from mummy.

ta
rolf

 

[Qlds007]

14 days on LMI deals to get assessed but have you seen the latest if you ever want to leave them:

** Purchases they now require a minimum 10 Business days notice for settlement

AND wait for it......

** Refinances - We now require a minimum of 30 Business days notice.

My god thats 6 weeks notice for a refinance.

 

[tobe]

Thanks fellas,
So Im being a bit chicken little with my end of the world is nigh speech re LMI then? ANZ are just trying to lessen the flow of new business rather than a definitive change of LMI policy across the board.

BTW, I have found ANZ, while they do have (or used to have) strict rules on length of employment etc, were at least pretty good with small defaults etc. They actually did look at them case by case, so I had a lot go through there that were declined by some of the other big four. No longer the case now I reckon.

Its just so annoying they didnt think to put out a little memo instead of declining deals with BS reasoning (or reasoning they didnt use 2 months ago). I have 3 more deals in the pipe I could have had approved elsewhere in the meantime.

 

[Perth Investor]

ANZ max lend now 90%

ANZ has stopped doing 95% deals, their maximum LVR is now 90%. This is a significant step in the credit tightening. First Home Buyers are now pretty well locked out of using ANZ unless they have serious cash deposits...

Noel

 

[andrew_de_a]

dont most ppl have a 10% when buying their PPOR?

 

[Rolf Latham]

Hiya

With MGIC providing the insurance , that does not surprise me at all.

Id be expecting an 80 % lend soon on that basis.


ta
rolf

 

[joe jo jo]

ANZ has stopped doing 95% deals, their maximum LVR is now 90%. This is a significant step in the credit tightening. First Home Buyers are now pretty well locked out of using ANZ unless they have serious cash deposits...

Noel

Just got that one. Pick and choose, one of the many down sides to limited competition.

 

[Spectre]

as a rephrase - prior sounded like I should be on ****? - gloomy after I read it 20 minutes later.

the banks are getting squeezed by the MIs

MI corporate greed vs risk reward

 

[MC1]

In response to the softening in the economic environment ANZ has been tightening lending standards in recent months, including recently removing Lo Doc lending with an LVR greater than 60%. As a responsible lender, ANZ does not want customers in a situation where they are over extended.

Effective Monday, 17th November 2008 ANZ’s maximum Loan to Value Ratio (LVR) will change from 95% to 90%.

Although ANZ’s mortgage portfolio credit quality remains sound and customers are managing repayments well overall, we expect some weakening in the economy in 2009 which many economists are predicting will result in an up-tick in unemployment and the potential for some softness in property prices in selected areas.

ANZ believes reducing the maximum LVR from 95% to 90% is a prudent and measured response to the emerging economic environment and is both in the bank's interest and our customer's interest.

For standard residential property, ANZ will continue to require Lenders Mortgage Insurance (LMI) to be payable when the LVR is greater than 80% to the new maximum of 90%. Please note LMI can be capitalised up to the new LVR maximum of 90%.

All NEW applications must be ‘received’ by midnight, Sunday, 16th November to be eligible for consideration for lending above 90%.

Please note: the following exceptions will apply in order for applications in progress still to be drawn at up to 95% LVR (subject to normal lending criteria):
 Applications already approved but awaiting settlement;
 “Approved Subject To” (awaiting income verification, valuation, etc.);
 “Approved in Principle”; and
 Existing ANZ customers – non credit critical restructure without additional funds.

 

[Rolf Latham]

ANZ NZ is down to 80 % max full doc LVR

So they must have lost any decent LMI provider

Or

They are reading something into the NZ market that may have implications for AUS ?

ta
rolf