Bank won't lend due to Credit Default - help needed!

Hey, George

After the last couple day's drubbing on this Forum I could do with some new friends!

And guess what!!

Today, while I was amusing myself ringing twenty lenders to source a deal (anyone for mud brick out in the regionals?), out of the blue, one of the BDM said 'By the way, we take defaults, too!'

'Do you?' says I 'Tell me more!'

He said:

Defaults are OK
Full Doc loans
Default must have been paid at least six months prior to the Application
No more than $1,000
Borrower must have 5% Genuine Savings

How does that sound?

This lender will go to 95% inc LMI for any customer, not just existing customers

Good rate, discounted SVR or some fixed options (I know you like fixed rates!*!)

Good set up costs, modest $1,500 DEF (I think he said up to 5 years ... can't read my own handwriting!)

Anyway, email me if this sounds interesting to you. I have never dealt with this lender before (tell a lie, I refinanced a customer away from them about two years ago) but the BDM and I discovered we had about 15 common acquaintances including the salesman who I dealt with when I built my exec rental ten years ago and who went on to become State Sales Manager for a very high profile builder in Melbourne.

So if the BDM eats toast and vegemite he must be an OK bloke, right?

Cheers
Kristine


Yeh, right!

Thank you for doing this research. It looks good. Looks like I'll have to sit it out for 6 months though, as that is the only condition I'm not yet meeting (paid both defaults late July 2009). If I recall, this was the issue with Genworth(less) too. Anyway, they're crazy and history.


Can you please explain SVR and DEF?

SVR = Servicability Ratio? What do you mean by discounted? Their calculations aren't as tight?

Gg
 
SVR = Standard Variable Rate loan
DEF = Deferred Establishment Fee

The SVR are usually the benchmark - but there is no 'set' SVR, each lender has a product which is their standard, then they usually have lower rate loans (Discounted Variable Rate) and possibly higher rate loans (some lenders have different rates for low doc) and fixed rate loans.

The cost to lenders of establishing loans is driven partly by competition and partly by their policies

Few lenders now don't defer some of the establishment costs eg CBA has a $700 DEF if the loan is closed off within 4 years.

Other lenders may charge a percentage of the original loan amount, other lenders charge one month's interest, etc

However, once past the nominated period the DEF ceases to apply.

grubar, as the defaults were such small amounts there will certainly be a lender which will do the loan, even within the six month period.

Defaults are a nuisance and can be a real hindrance, but are never insurmountable even in this lending climate

And even if you end up paying slightly over the odds, the popular opinion is that property is on the move again - a bit more in interest v a lot more capital growth - but, of course, it will depend on your own perspective on the deal.

Cheers
Kristine
 
Origin agreed to remove default: Thanks

Although the remove for payment letter did not work entirely, it got the attention of someone who works in disputes resolution for Dunn and Bradstreet who seemed to actually care. He advised me my best bet was to send him all the reasons the default should not have been listed onto my credit file in the first place (I went with lack of attempt to contact me before listing the default). He also suggested I ask for Origin to remove the default as a show of good faith once the account is paid. I heard back a day later (we were both surprised by this) from Dunn and Bradstreet that Origin has agreed to remove the default from my credit rating once payment is recieved. Obviously I am insisting I get this in writing, but it is such good news I wanted to show my thanks.

I thought it might also be good for people to know it is possible to get defaults removed (as long as you fight before you pay), so that you don't end up having all of these issues with banks, mortgages etc for the next 5years over an ammount as stupid as $351.65.

Thanks Rolf. I am just getting to the stage where I am considering first home loans etc and the whole experience has just become that little bit more bearable.
 
An update:

I managed to secure a pre-approval from a lender (I'll won't disclose here). 90% lend + LMI capitalised, ~5.5% (bit high, but beggers can't be choosers) at $490K purchase price.....pre-approval valid for 3 months.

No QBE, no Genworth(less).

And the insteresting part ---> I approached them directly....after a very poor showing and effort by a couple of mortgage brokers (not off this forum though), I decided to go straight to the man....honest, simple, straight-forward, immediate dialogue between me and the bank....just how it should be


FYI - I approached St George, RAMS, Mortgage Ezy, State Custodians, Suncorp and ANZ.

What was interesting was the massive contrast in servicability calculations between the banks....one said I can service $310K (hehehe), while others gave indications up to $500k.

Another thing was the amount of documentation required....e.g. St George wanted my Tax Returns, Notice of Assessments, BAS statements and Profile and Loss Statements for the last 2 years....in addition, they wanted to see my current rent slips (to verify I could pay)....all they didn't ask for was the colour of my undies.... .I guess it was their way of saying "we're not interested" without actually saying it

BlueCard - I don't do lo-doc....these are full-doc loans...I have nothing to hide from the big bad scarey wolf.
 
Hi Carrots

looks like it might be a good outcome !

I find too many organisations use the CRAA system to their unfair advantage. In fact, im still surprised that some gov body hasnt stepped in to set some new rules which apply in todays world

ta
rolf
 
Hiya Grubar

Thats great news

5.5 is pretty good !

Obvioulsy dont go uncon on a contract till your new financier has provided an unconditional offer.

Your experience of both variances in what lenders will lend what, and their doco needs is quite normal.

STG needs as described as pretty much "standard"...........u should try Heritage, hey want a DNA sample too :)

ta
rolf
 
Bearing in mind - back in the day - when they got the rental statements some lenders would count the rent paid as savings and you could get the genuine savings premium on LMI rather than the non gen savings premiums.
 
You could always consider La Trobe? or Wide Bay, as far as I know they will consider a deal with defaults.

Interest is higher but.

Alex Sperling
 
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