Defaulting repayments - need advice

[sue78]

wylie - yeah i was straight onto my banker yesterday and she advise me to clear all loans which I have done so we'll see.

i was really upset yesterday but at the same time i was so touched, i phoned my close friend and she transferred the funds in 10 mins. Will definitely have to shout her to a classy meal!

I know it's all my fault but I am good with my loans and do take pride in that. But when there's hard times...I guess it doesn't go both ways. I am an idiot.

 

[kathryn d]

Sue,
I'm sure you have helped a lot people here..
Hopefully you will get thru it ok..and not do it again

 

[jingo]

I am not new to SS, been around maybe 5 years? was brought here when I think John Burley was a popular figure.

Hi Sue,

Great to see you posting again. I always enjoy reading your posts and have always found your strategy inspiring - ie. building and selling.

Sounds like you have the temporary cashflow problem sorted now - with settlement a short time away.

Hope all is well and it still sounds like you are making great profits.

Regards Jason.

 

[sue78]

Hi Jingo,

Yeah I hope so. It can go both ways and then there's the credit rating to sort out too.

Timing is just so bad for everything. We have overseas guest for a week and then again in 2 weeks time..all planed long time ago. The bills quarter is upon us again too.

Usually at this stage I have already signed a contract for my next project! just don't have any time now.

 

[Shaneelastic]

Sue, could of capatilized interest or paid via credit card and that would have sored the payments out until settlement?

Im sure the M & D tag team could of given you a positve suggestion as opposed to their holy wisdom

 

[jingo]

Hi Jingo,

Yeah I hope so. It can go both ways and then there's the credit rating to sort out too.

Timing is just so bad for everything. We have overseas guest for a week and then again in 2 weeks time..all planed long time ago. The bills quarter is upon us again too.

Usually at this stage I have already signed a contract for my next project! just don't have any time now.

Hi Sue,

Hope you manage to juggle the bills. Could you go on a repayment plan for the bills until you sell the property?

Regarding the credit rating - can you check your CRR file? I think you should be fine as you are in the process of selling the property and will be able to pay the loan from the proceeds - but perhaps check with the bank as well.

Perhaps take a breather before signing up to do another project and establish a cash buffer in the meantime??

Hope it all turns out well and I will be following the thread with interest. What I like is that your strategy of build and sell has allowed your husband to find a job he likes and for you to stay at home with your family - inspiring stuff..

Regards Jason.

 

[Piston Broke]

Everyone has CF problems now and then, it's part of any biz activity.
The problem is sometimes we shut down and go in fukit mode when things get stressful.
This happens often to those who default who just take the no action route.
Forget about whatever else is happening and take action.
You can afford to be without good credit in this game.
Seems like you making some headway, which is good.

 

[alexlee]

I see the lesson here as, prepare when you can, because things can happen that prevent you from making smart decisions in the short term. In this case, if refinancing had been consistently done at 80% LVR, there would likely be a pot of money in an offset that could have been used.

Having equity is not the same as cash. Equity requires sale which takes time, or refinancing, which may not always be possible even with a low LVR.

 

[rkordic]

Hi Sue,

I'm sorry to hear that you're having such a tough time. I can certainly understand how this can come about. You're doing your best to make good investment decisions as well as look after a family, and keep your extended family and friends happy.
Having twins is a huge task; most people have no idea what's involved! I happen to have twin grandkids. My opinion is that anybody who survives twins deserves a medal! From what I've heard people tend to erase those first 2 years from their memories. So, don't be too hard on yourself!
As far as banks are concerned, they're big organisations, where things can easily slip through the crack. Do what you have to, to sort things out, take a break from making investment decisions and come back enthused later on when you are in a better frame of mind.
Take care of yourself.

RK

 

[sue78]

Decision has been made. A bit gutted. They're not giving me anything, well paying off the credit card balance which isn't much anyway. It's not like it's at the limit!!

I can't believe I have so much cash surplus and they're using it all to pay down my loans. It's just ridiculous.

My bank manager has been fighting it for a few days and only managed to convince them to pay off credit card. She has noted down everything I have done.

I requested to pay down my ppor loan. It's ridiculous since the house is worth over $500k and the loan is only about $160k. They wanted to pay down Ip loans..no!

I can't believe this. If I hadn't gone into default I would have gotten all of it.

Good news is that when I sell the other property, I get all of that, bad news is that I'm so cash strapped, I don't know how I am going to make repayments on $450k for the next 2 mths (assuming that's how long it will take to sell). Second bad news is that I can't borrow from family since I already did that last week to pay off the defaults!!

another catch 22 situation.

really how did i get myself into this mess. I'm such an idiot.

what can i do now about the other loan? apply for a repayment break. I'm not renting it out. We want to sell that one.

repayment break is out of the option! great another catch 22 situation. I have to have surplus funds to apply for repayment break.

this is ridiculous. Lenders are so much more accommodating to corporate clients.

By the time I am finished, all my loans will be paid down/paid off and I will still be broke.

I hate borrowing money from family the most. I'm so upset I can't pay them back today.

good news- had not affected by credit rating, it's all internal. time to change lenders!! my friend at NAB said they would have handled matters differently there. Maybe NAB?

 

[sue78]

Sue, could of capatilized interest or paid via credit card and that would have sored the payments out until settlement?

Im sure the M & D tag team could of given you a positve suggestion as opposed to their holy wisdom

How do u pay via credit card? you can't transfer funds out of CC on internet banking. Unless you take out cash advances.

 

[kathryn d]

Borrow from your credit card to make the payments until you receive your other funds.
Consider renting your house out short term, until it sells. How long before settlement?
Travellers will be grateful to have a room to rent at a reasonable cost ($200 week bedroom)...I know, we are one.

There are lots of free or cheap furniture you can scour from Gumtree.

You can do it.

 

[kathryn d]

How do u pay via credit card? you can't transfer funds out of CC on internet banking. Unless you take out cash advances.

Sometimes the cc companies provide cheques you can use.
You can also call them and they may be able to transfer it directly into your bank account.

Or pay what you can with your cc and use cash/debit when you can't

 

[sue78]

Alex - yes I do keep a cash reserve all the time. I have to in the building games. Ranges from $50k to $100k. I did have a lot in shares but they're all sold or worthless....yes, money is easy come easy go. I can't believe all the money I have made over the years and then all the $ I have lost. It's like a game.

A few mths back, i was just focused on getting the mcmansion ready for sale (my job), I had to use up my cash reserve since I didn't borrow enough! Also, had some delays because of that tree (had a VPO on it) which had to be removed (another terrible mistake and long story!)

 

[sue78]

Hi Kathryn, no I can't rent the house out. No one would but it then.

http://www.realestate.com.au/property-house-qld-calamvale-106589024

i am pretty sure westpac doesn't allow using credit cards to pay home loans.

my banker friends think it's bizarre, they have never retained all of the funds, even with 6 mths default. If they have reasons etc

I need to speak to a broker. My LVR is very low, since they paid down loans and my properties have all been revalued. I may be able to switch lenders. Good thing is all my loans are on variable atm.

Will be looking for a new agent. Many agents want our business, they are amazed the house has not received more offers and not sold yet. We had no money so have done any marketing at all. So we have to fork out for some marketing in the ethnic newspapers. I can't believe a much older house nearby just listed for $749k, the agent said it's no where as nice as ours and she also said we listed ours too cheap. It's like a punch in the face...I feel like I'm being punched in the face all the time lately.

 

[alexlee]

Alex - yes I do keep a cash reserve all the time. I have to in the building games. Ranges from $50k to $100k. I did have a lot in shares but they're all sold or worthless....yes, money is easy come easy go. I can't believe all the money I have made over the years and then all the $ I have lost. It's like a game.

A few mths back, i was just focused on getting the mcmansion ready for sale (my job), I had to use up my cash reserve since I didn't borrow enough! Also, had some delays because of that tree (had a VPO on it) which had to be removed (another terrible mistake and long story!)

That wasn't exactly what I meant. I meant that one should keep replenishing the cash reserve whenever possible by refinancing. It might not be available when you really need it.

 

[sue78]

credit won't even release $10k so I can meet repayments on the other house we're selling.

So I had no choice but to make a complaint. The customer service resolution officer was really understanding. It seems I have not been properly advice on my options and Westpac has not done its job properly in all areas.

For future reference, there is a department called Home Assist that provides assistance to clients in hardship. All banks have this as I have been told by my friends in other banks. Apparently, i did the right thing, I was always upfront with Westpac. I told her that today was the first time I heard about Home Assist.

It's good to know now that I can apply to home assist with the other house until it gets sold.

She has put a stop on my loan accounts and going to try and return some of the proceeds to me. If I had not defaulted I would gotten it all but if I had gone through the right channels then I would have gotten all of it still.

so we'll see how much power she/the department has. I thought credit was the top.

 

[Mr. Fabulous]

banks do have a duty to customer service.

No they don't. Banks have a duty to their shareholders, that's it.

if they start exercising all these rights under the new law, well they will lose a lot of customers.

You think so?

 

[tobe]

I think its been said before, but whether you defaulted or not, the bank can return what they like to you at settlement. It is completely at their discretion due to the 'all monies' clause in their loan contracts.

 

[sue78]

mark - actually they do. maintaining good customer service and keeping customers happy is important to their business. All bank staff are taught this. Why is it they even bother having a complaints and resolution centre if they don't care about the customers?

tobe - no banks actually do that unless they have to. I have had a long relationship with westpac and they have never done that b4. Also, my lvr is at its all time low compared to b4. I have been told if I had not defaulted they wouldn't keep a cent. I have also been told now that they admitted they are at fault..well the resolution manager did anyway.

I have previously had surplus funds paid into other loans because of x collateral/lvr but on this loan, there's no x collateral! all the other loans are below 70% lvr and now will be even lower.

I even cleared my default last week but it made difference to the decision.

My friend told me that one of his clients has 10 diff loan accounts, defaulted for 6 mths and on settlement, they still gave him all surplus proceeds after clearing the accounts. They're really tough on me and they gave me the wrong advice. I also have the proof. The bank manager from the branch that I first made contact with actually sms me instructions on who to speak to and I still have the text msg.