Bank delayed settlement

[megaurav2002]

Hi Guys,

I applied for a home loan more than 6 weeks back. And i have been following up regularly with my bank and they have always assured me the loan approval process is progressing well. Today, just two days before settlement they called me and told its probably gonna take them couple of weeks more due to some problem in the 'evaluation of the property' report.

This delay is going to cost me couple of thousand dollars. Just wanted to know whose liability is this? I hope i can claim this from the bank because this is completely their fault. Anyone gone through this before?

Thanks,
Gaurav

 

[twobobsworth]

What does your loan contract say?

 

[Kristine..]

Hi Gurav

Welcome to the Forum!

By the sound of it, you don't have loan aproval as yet. Is this right?

If the lender has not yet valued the property, or if the property does not meet their security requirements, you may not get this loan approved at all!

Obviously, you are in an unconditional and binding contract if settlement is only two days away, and no finance.

I would suggest you get on to your broker or loans officer pronto!

If you can't get a loan offer in your hand by close of business tomorrow you must get an application in to another lender immediately. You must also discuss this with your conveyancer / solicitor today to apply for an extension of time to settle.

Depending on the circumstances of your vendor will determine the course of events.

I hope you can get this sorted out, but as the lender seems to have not yet made a decision to lend you money they have no obligation to you at all. Don't concern yourself about trying to get them to pay for the delay - it is your responsibility to meet settlement and to have finance organised to do so.


Hopefully you can settle without too much of a delay and without too much grief from the vendor!

Cheers
Kristine

 

[Rolf Latham]

Hi Mega

What Kristine said.

Seeing you are from Melbourne, and so is she, Pick up the phone and call her today and get some options quick smart ................You are possibly in more dire straits than you realise.

ta
rolf

 

[Perp]

What were you--

Why do you think that--

Didn't you--

Don't you realise that--

Nope, I just don't know where to start on this one.

 

[megaurav2002]

Thanks very much Kristine.

I understand my main focus at this moment should be settlement rather than claiming the loss incurred. Had a chat with Solicitor, she has filed for settlement date extension.

Had a chat with my loan officer too. She has assured that loan should get approved in a week.
Hopefully i ll get my loan soon.

 

[Learnings]

Have your stuff ready to lodge with another lender/broker incase things go pear shaped

Kirstine is an excellent choice

 

[slam]

Looks like what you got was not an unconditional approval.

I wouldnt place any deposit down until I at least got an unconditional approval. Or one while Im on the 5 day cooling off before going ahead.

Banks these days need to do valuation before they would even loan. Better to get all this done before going ahead.

Slam

 

[Alabex]

we had a similar situation when we bought our house. We had to delay settlement because the banks (two were involved because of a release of a guarantee).. basically we had one bank waiting on an ORIGINAL piece of paper. which mysteriously kept going missing.

Becaue we were meant to settle on the 19th december and it didnt happen we then had the problem of christmas new year closures etc etc...

that missing peice of paper cost us like $3k in costs. we did investigate it for a while trying to find fault but everyone was blaming everyone else and we got to a stale mate...and because we couldnt prove who was at a fault we couldn't make a claim.

 

[laiyee2000]

bank's solicitors delayed settlement

I recently found myself in the same boat as megaurav2002.
However, it wasnt the bank that let us down, but their solicitors.

We had an unconditional loan approved by the bank on the 4th of june.
Settlement was on 19th of june.
Everything was in place however 2 days prior to settlement things went hay wire!

The bank's solicitor was asking for documents and informing our conveyancor that things were not completed or copies that were faxed were not clear.

Our conveyancor had forwarded all the necessary documents on the 12th of June but what I fail to understand is why did the bank's solicitors wait till the last minute to ask for these docs? And why didnt our convenyancor check all paperwork and fax through CLEAR COPIES (no truncated text)?

So my question now is who is responsible for the delay in settlement?
I lost 5K in discount which the vendor was prepared to offer if settlement was on time. $905 in late penalty charges and you know whats worst??? our conveyancor is charging us an extra $250 for having to deal with delays in our settlement! unbelievable!

 

[Perp]

So my question now is who is responsible for the delay in settlement?
I lost 5K in discount which the vendor was prepared to offer if settlement was on time. $905 in late penalty charges and you know whats worst??? our conveyancor is charging us an extra $250 for having to deal with delays in our settlement! unbelievable!

I know it sucks, but I'd be willing to bet that nobody will accept responsibility, and you'll wear it.

Did you notify the lender and their solicitor that there was a $5K discount on offer for on-time settlement, and seek their guarantee that settlement would occur on time?

It's infuriating and irresponsible, yet apparently routine, for settlements to be delayed in this manner.

Unfortunately, I think the only thing to do is really hound your conveyancer/solicitor, and ensure they're doing the same with the other side. So a week before settlement, you need to not only ask your conveyancer whether they're ready, but "are the other side ready? Do they have everything they need from us? Are they aware that it's imperative settlement happens on the 16th?"

If you don't reinforce to them daily that settlement absolutely must happen on the nominated date, the parties involved seem to assume that it's OK to just delay it until they're ready.

 

[HappyCamper]

I wouldnt place any deposit down until I at least got an unconditional approval. Or one while Im on the 5 day cooling off before going ahead.

Banks these days need to do valuation before they would even loan. Better to get all this done before going ahead.

Just curious, but if it's taken the already elapsed 6 weeks + 2 additonal weeks to get unconditional approval, isn't the property likely to be gone by then if you were to wait for this before exchange?

 

[megaurav2002]

update

Hi guys,

Thanks to all for helping me through your suggestions. Now that everything is settled and i have got the new house i thought i ll update you guys. I am charged $2000 extra by the vendor for delayed settlement. I am gonna try my best to make Bank pay for this.

Personally i feel going with Bankwest was a mistake specially if you are not living in west australia. Super slow service (two and a half month to get a home loan through!!!)

Thanks!

 

[Gremlin]

It doesn't strike me as likely you'll get money from BW.

If I've read your thread correctly, you've gone unconditional on a contract without being approved for finance. Without wanting to sound harsh, you need to recognise that you are at fault here, not the bank. From your comments re wanting BW to pay for this, you haven't acknowledged this at all.

Consider the $2k the price paid for an important lesson. But bear in mind that the price you could've paid may have been much, much higher if you had your finance declined.

 

[chylld]

Personally i feel going with Bankwest was a mistake specially if you are not living in west australia. Super slow service (two and a half month to get a home loan through!!!)

Good to hear it all got sorted out in the end, although when I applied with bankwest for my home loan it only took 5 business days to go from pre-approval to full unconditional approval. Possibly because I hurried them to do the valuation before exchange...

 

[josko]

Hi guys,

Thanks to all for helping me through your suggestions. Now that everything is settled and i have got the new house i thought i ll update you guys. I am charged $2000 extra by the vendor for delayed settlement. I am gonna try my best to make Bank pay for this.

Personally i feel going with Bankwest was a mistake specially if you are not living in west australia. Super slow service (two and a half month to get a home loan through!!!)

Thanks!

hi megaurav,

I'm glad you now have your property.

I had a problem with a bank delaying settlement due to their error. It cost me $200 to have my Solicitor post them a nice little letter asking for full compensation.

I got my $money back.

Regards JO

 

[megaurav2002]

Yay! just wanted to inform got my money back ... So in the end its a happy ending for me .. and many lessons have been learned .. Thanks everyone for ur help!