Can the banks make us change our loan??

[Bandita]

It's been pretty painless rolling over our IO periods (just a quick form to fill and send) so we must have got pretty lucky.

Hi Y-man,

Which bank(s) are your loans with ? Would love to know lenders that are easier to deal with on IO periods than ANZ!

Cheers,
Jen

 

[Saint]

As a question, is the LMI based on a valuation from a few months/years ago?

i.e. is it possible to revalue and forget the LMI?

Cheerio

Saint.

 

[Bandita]

As a question, is the LMI based on a valuation from a few months/years ago?

i.e. is it possible to revalue and forget the LMI?

Cheerio

Saint.

It's from June 2005 - so not long enough ago to have more than 20% growth (in Melbourne).

Cheers,
Jen

 

[The Y-man]

Hi Y-man,

Which bank(s) are your loans with ? Would love to know lenders that are easier to deal with on IO periods than ANZ!

Cheers,
Jen

Majority is with Westpac.

Cheers,

The Y-man

 

[Bandita]

I
If she baulks then make a call to the Banking Ombudsman. Even telling your manager that you will be calling may be enough to get her to put your file away and let sleeping dogs lie.

Hi Simon,

Can you explain a bit more on the "Banking Ombudsman" - is this an organisation? Are they out there to protect consumers from the big mean banks who try and changed signed, implemented loans that they realise aren't entirely to their ? How do you get in contact?

If I keep getting threats of more LMI fees, I wouldn't mind saying I'm getting frustrated enough to contact the Banking Ombudsman, just want to make sure I know exactly what it is first!

Cheers,
Jen

 

[quintets]

The banking and financial services ombudsman is a kind of "policeman" for the banking industry. Although it was created by the Australian Banking Association, it is a free and independent dispute resolution service. The web site has a jurisdiction checker which you should probably use to help you decide whether it may or may not be in their ball park. But I'd call them anyway regardless.

http://www.abio.org.au/ABIOWeb/abiowebsite.nsf

I never gotten to the point where I used them, but when once I had a big problem with a bank (Which bank?), I made sure they knew I had already called the ombudsman. According to the FAQ, the banks are charged a flat fee to participate as well as an additional fee based on the number and complexity of the cases that need to be investigated by the ombudsman. In other words, if they know YOU KNOW about the ombudsman, that might be additional pressure to sweep things under the table. Just preventing you from lodging a complaint will save them money. I heard via the grapevine that it was $5000 per complaint. I had other leverage as well, but every bit helps.

I also read in another thread that some banks (eg. Westpac) waive LMI up to 85% depending on how saavy a negotiator you are. So the 80% rule is, apparently, not carved in stone.

Jireh

 

[Bandita]

Hi all,

Just got another call from ANZ this morning, this time the usually helpful North Melbourne branch, and they're now saying the same thing, they've got to change the loan from 10years IO to 3 years, 8 months. I've told them we'll settle for 5 years from June 2006, that's the minimum, and they're getting back to me.

I'm still fighting this, and gave the Banking Ombusdman a call to see what they thought, and they said if the bank is trying to break a signed, settled contract, then you are entitled for compensation of what your financial loss would be. Would I have any financial loss? Besides the absolute pain it's been and time I've spent dealing with this, I guess I won't know for 3 years 8 months when I have to refinance? And if circumstances have changed, or their policies have changed maybe? Would I even have a claim for a financial loss from this if they do decide to break the contract? (Hmmm....what's my sanity worth )

Anyone had a bank break a contract on them before?? Could you claim a financial loss??

Cheers,
Jen

 

[Puppeteer]

You'd have a financial loss of the extra application fees at the very least.

I don't even know why you're negotiating. You have a contract that you are happy with, the bank has signed it and it has settled.

I know what the bank's response would be if you sent them a letter saying that you made a mistake, and that you'd actually prefer a 1% discount and a longer IO period.

If it were me, I'd be digging in for the fight. I've had some drawn out arguments with banks in the past, but never had anything go to the ombudsmen (though I've been 1 step away twice).

Basically, the ombudsmen ask that you try to resolve it with the bank first. The correct procedure is bank dependent but basically, ask the person that you are dealing with, and ask them once. If you get no joy, try their manager, still no joy, try the complaints line (this is usually where stuff starts to happen), if you still get no joy, after following this procedure, then let the bank know that you are still not satisfied and that your next step will be taking it to the ombudsmen.

Make sure you put time's, date's name's and resolutions to every phone call, and do as much as you can in writing (though it will take a bit of extra time), because the ombudsmen will want to see this, as will the bank's complaints line.

My last problem was with a bank not crediting me for my offset balance in my account. I had a list of 42 phone calls and a pile of letters, and once the complaints department of the bank found this out, it was sorted out within 48 hours.

The fact is, the bank has stuffed something up here. If their procedures were not followed, then that shouldn't be your problem. Never agree to something that you aren't completely comfortable with as a compromise. If it were me, and they were asking for the contract to be annulled and re-written, I'd be asking them what incentives they were willing to offer for me to do this, and it would be along the lines of extra discounts and no fees whatsoever.

Good luck with it all

 

[Bandita]

Hi Puppeteer,

Thanks. Believe me, I'm not happy to be negotiating, but if it makes this thing go away, it's better than the ridiculous amount of time I'm spending fighting them on it. But I will absolutely not accept 3 years and 9 months - I want min 5 years, or I'm keeping the original contract. Everytime they come back to me with, ok you can have 5 years or 10 years but you'll have to pay $xxxx in extra LMI, I say nope, we'll keep the original contract thanks.

The bank manager keeps saying that he's looked at it from all angles and can't see how we're at any disadvantaged by changing - so I need some ideas to help make him go away I've been saying that we're 1) Happy with the contract exactly the way it is right now; and 2) We're protecting ourselves incase values don't rise in 3.9 years and we might have to pay LMI again when we ask for another 5 years (he says they won't make you pay LMI again, I say they're trying to break a contract now, or make us pay additional LMI for 5 years, so I don't trust that they won't then too)

I'm sure I'm missing other things that I could fire back at him.....ideas??

Thanks!

Jen

 

[Rolf Latham]

Hiya Jen

Its waaaaaaaaaaaaaay beyond the manager.

Remember these days, most bankies cant approve your loan, its all centralised.

Id suggest that you tell them that you "acted in reliance on the information in the contract".............after all big banks dont make mistakes of that sort.

You know what........................just sit and tell em to go away.

Under the terms of your contract, they can probably even foreclose on you.....................but the chance of them doing it is limited, especially where there might be media exposure involved

ta
rolf

 

[Bandita]

Under the terms of your contract, they can probably even foreclose on you.....................but the chance of them doing it is limited, especially where there might be media exposure involved

Hi Rolf,

Ok, you're scaring me now! Really? I do want to fight this because I don't think it's right or fair, but yikes, do we want to take that risk?? In order to foreclose, wouldn't we have to do something wrong, i.e. miss a payment or something? I don't mind standing my ground, but.....oh dear, what am I getting myself into ?

Cheers,
Jen

 

[quintets]

so I need some ideas to help make him go away I've been saying that we're 1) Happy with the contract exactly the way it is right now; and 2) We're protecting ourselves incase values don't rise in 3.9 years and we might have to pay LMI again when we ask for another 5 years

Hi JenD,

If the bank manager is saying you wouldn't be disadvantaged either way, I think he's just "trying you on".

You could say the attractiveness of the investment loan with YOUR institution to us relied on solid cashflow numbers for 10 years. Maybe I'll take my business elsewhere. I'm assuming you've got projections you could point to.

BTW, I hate to say this, but it sounds like you're getting the part where you say, "Look, this is all getting too complicated for me. Could you put what you just said in writing?". Slow down the conversation; take control. Put it on paper. Then you know, and they know as well, you've got something concrete to go back to the Ombudsman with.

When I had my fight with my bank. I was dealing with the credit card security department. When I asked if he had taken my case to the bank's internal public relations department, he said, "Oh...I'd rather not". It kinda made me think that whoever you're talking to might want to keep this hush hush...even from other parts of the bank.

In the end, your first point, "I'm happy with it right now" sounds fine to me. Anything else just might deserve a response like "well...that's unacceptable. 10 years is a very secure time frame for our investment. Aren't you in the business of selling me a secure investment???". And then just smile.

If this drags out further, make your first repayment a day early and maybe chuck in an extra $50-$100 just to make a point that their cash payment stream, which is really what they're worried about...is safe with you.

my two cents...but I'm a bit militant about things having patiently taken on a bank once and won. I lost $10000 from some accounts to identify fraud and the bank accidently gave me back an extra $4000 (very complicated story). Anyway, 12 letters, countless phone calls as well as a visit at home later, I managed to carefully track down a flaw in their phone banking security system and they let me keep the money

Jireh

 

[Bandita]

Thanks Jireh,

You give me inspiration! Not the same situation, but you've obviously had to take on the banks and won, that's what I need to hear! I'm actually totally confused as to why this happening - why me ?? But, I do see it as a great learning tool. I work in contracts, so I know the importance about them, but I think I've been taking the mortgage loan for granted (everyone has one, it should be straight forward, sign the papers, done - obviously not always!) I am learning an enormous amount about loans, banks, the necessity to really read and understand that loan contract, to KEEP EVERYTHING! Always sign the "copy for you to keep", etc, etc, etc. The best thing I've learned is the power I actually have once things are signed, and that even banks can stuff up!

Still have no idea what will happen, I haven't mentioned my conversation to the Bank Ombudsman, but that will be my next step - I get more unwilling to compromise everytime I hear that additional LMI fee!

Don't know if it was a good or bad thing to do??, but today I mentioned the loan pre-approval for our next property I have with them and my lack of confidence in proceeding with it if this doesn't get cleared up soon.

Cheers,
Jen

 

[quintets]

Thanks Jireh,

You give me inspiration! Not the same situation, but you've obviously had to take on the banks and won, that's what I need to hear!

I didn't tell you it took me just over a year and the worst case scenario was I would have to pay back $4000. A bit different, but still, I would have given anything to be a fly on the wall when they realized the deep doo-doo they were in. Still, revenge was not my aim. Justice and a full understanding of "how did we get into this situation?" was the thing, I think, that got me the victory. I love Pauline Hanson's line, "Please explain". And get it in writing. And then after they tell you, ask them, "And is this my problem or your problem?"

Don't know if it was a good or bad thing to do??, but today I mentioned the loan pre-approval for our next property I have with them and my lack of confidence in proceeding with it if this doesn't get cleared up soon.

It might help, but I wondering whether the person who wants more of your business is the same as the person who's trying to save their career. It might not be. Do you know what I mean?

Jireh

 

[Simon]

Don't know if it was a good or bad thing to do??, but today I mentioned the loan pre-approval for our next property I have with them and my lack of confidence in proceeding with it if this doesn't get cleared up soon.

Cheers,
Jen

Good thing to do.

Remember Jen that you are not taking on a huge faceless bank but just one clown who has proven herself unreliable and seems to be doing a bit of **** covering at the moment.

I would even consider stopping talking to her and ask for her boss. Seems as how she doesn't have the authority to give you what you want so just keep working up the chain until you find someone that can. Someone who will be busy enough that they will authorise what you want rather than deal with trying to refuse you.

Has worked for me in the past with insurance companies, Centrelink, DVA etc etc

Don't waste time with people who cannot do what you want done and find someone who can.

 

[Bandita]

More updates,

Well, the Heidlebery Bank Manager is finally being totally honest with me. Pretty much, they're going to have write out a check to the LMI for this 10 year IO loan if we don't change.

I appreciate and prefer honesty, and I understand people make mistakes. So, we haven't agreed to anything yet, but they're doing a full valuation of the IP ASAP to see where we're at - we've only had it a year so it won't be dropping under the 80% LVR yet, but hey, I'll take a free valuation

Depending on this, we will probably agree to the 3 years 9 months. I'm much more willing to compromise when people are totally honest and not just trying throw smoke and mirrors at me. We're also going to read through the new docs carefully to make sure we will not be up for any fees whatsoever when we have to refinance in nearly 4 years time.

Are any of the brokers out their familiar with the ANZ Breakfree package - are there any fees whatsoever in refinancing (besides LMI)? This is where we want to make sure that we are totally covered.

Cheers,
Jen

 

[Rolf Schaefer]

Hi Jen,
besides LMI there should be no additional fees in your case.

 

[Bandita]

Hi all,

Well, the valuation is in, $320k (purchased for $285k last year) so we're happy with that, just above that 80% LVR, and I'm guessing that LMI fee is due in very soon because I've received 2 messages a day for the past couple of days. I've told the bank manager specifically that my fiance, Geoff wants to speak to her before deciding everything, he's left several messages but she keeps just calling me and ignoring his messages (this is why we originally went to the North Melbourne branch - the woman doesn't return phone calls unless it has some sort of effect on her!) - and our plan is to make him the "bad cop" so to say - we've looked through the contract, and in the terms, there's a $350 "renegotiation fee" - and as they obviously think that's a fair fee for renegotiating the contract, so I think they should pay us that fee, as they are the one's wanting to renegotiate. Also, we're going to try for a higher deduction off the variable rate (we're at .7%, going to try for .8% - I'm not counting on that though, but would result in a an immediate "ok" from our part if they did it!).

Thanks for all the help with this! We'll see what happens...

Cheers,
Jen

 

[Bandita]

Hi all,

Well a bit more of an update - after the bank manager left 4 messages on my phone with which I replied with leaving 4 messages with her to call Geoff ....she finally did.....this is one of the first times my fiance has had to speak to this woman in almost a year and a half - and he was pretty much dumbfounded by her ignorance (we're still not sure if she's just clueless or really sneaky, but we tend to think the clocks aren't ticking the right way)......so she wouldn't agree with anything Geoff asked for (no .8% discount of variable rates- "any banks that do that charge higher fees" (I'll get my stuff together to show her otherwise) - and for the $350 renegotiation of loan fee they would have charged us, she can't understand that, because we're not renegotiating the loan - this was a mistake that needs to be fixed - but she'll give us $100 for our effort.....she kept asking Geoff if she could sent the new papers out - over and over again, he finally said Ok, send them out, although he hadn't agreed to anything yet....

So in the meantime - about a week before bank manager called Geoff, I realised that our interest payments have been increasing (IO with offset account) even though the offset account balance had been increasing - I calculated we were out by about $600. First guy I spoke to couldn't figure it out, but could see something was wrong, gave me a case #, and said someone would call me soon (didn't happen).

Geoff mentioned to incompetant Bank Manager that something was wrong with our loan and she said yes, she knew, but it couldn't be fixed until we signed the new loan.

(I didn't know she'd said that at the time) and at the same time Geoff was talking to bank manager, I called ANZ again - because there is NO WAY we're signing a new loan until this is fixed -we were out about $600 - the next person admitted that no one had looked at our case, but could see that someone had dis-connected our offset account -?!?!?! (He promptly turned it back on) - but I was on FIRE by this time, NOT HAPPY!! I mentioned I suspected it was the bank manager who was trying to make us change our loan - he was pretty surpised by this - asked if we'd spoken to our financial advisor as to if this was a good idea to change our loan. I said she was putting us under alot of pressure and guilt trips and we were ready to just give up - but under no circumstances until this offset account was fixed up. He escalated our case to a higher level and gave me a number to some customer helpline as he thought this change of loan thing was so weird - so I called them - absolutely no help whatsoever...but got another case number to work out who turned off the offset account without our permission and if we had to sign this new loan (heard nothing yet).

Yesterday, there was an account adjustment credit of $600 (yay!), but then 3 debits (adjustments of loan) totalling about $300 - so I called to find out why -and they couldn't figure it out so our account has now been escalated to a Senior level where someone named Lucy is supposed to call me. Doubt that will happen - but I'll be calling on Monday to check-up on it.

I'm at the point of being furious. The bank manager, who lied and said she couldn't fix the offset account - (while some "nobody" on the other end of the phone was able to turn it back on in 2 seconds) - is now pressuring us to sign this new loan - and I am at the point I could care less if it cost her bank $10,000. If I wasn't on top of things, our offset account never would have been turned on to begin with (she never worked that out - had to get North Melbourne Branch to do it) and then luckily realised she'd turned it off again (since 23rd of Sept they've worked out) - what if I didn't check this?!? - we'd be out $600, or more, for her incompetance!

Everything else about ANZ I've been so happy with - but this loan is becoming ridiculous, I can't believe how incompetant they are - and to turn off our offset acccount (where almost ALL our money sits) has made me furious!! This is a deal-breaker for us (more important than them changing the loan to beging with) - but I can't seem to get through to anyone who even has a clue what's going on?!?

Any tricks/hints on how to get up to higher management immediately? The best I've been able to get is Case #'s which have been escalated to Senior Management - but haven't actually been able to speak with anyone.

Thanks for your help!

Cheers,
Jen

 

[Rolf Latham]

Hiya

Time to hit the Banking Ombudsmans Representative at ANZ.

We have these types of issues regularly with ANZ and CBA..............more so with existing clients.

Ta
rolf