Frustration...

[Lukey13]

I just wanted to vent a little of my frustration right now in attempting to have my first IP settled. Perhaps the easiest way to convey some of that is to quote from an email that I just sent to my mortgage broker.

Also I include a summary of frustrations in the process so far:
* Ridiculously undervalued valuation on PPOR (security for 20% deposit loan & $15K costs);
* Had valuation increased by $10K which is still lower than ANYTHING else which can be purchased in the suburb on a much smaller block;
* Despite Suncorp having "pre-approved" our loans way back in January, 14 day unconditional had to be extended by my solicitor due to waiting on a "late" valuation of the IP;
* Miscalculation of LVR;
* Overcharging of LMI (which I only had access to today - 4 business days prior to settlement);
*Now today, after being urged by my solicitor to chase up the mortgage documents as very little time was left prior to settlement and the docs needed to be return posted from Brisbane, I found out that Suncorp had thankfully posted them to me today. One slight problem though - instead of one of the loans being for $254K, it was for $245K.... Next step, my mortgage broker is requesting NEW loan docs be done up AGAIN.

Penalty interest... here I come!

I don't dare ask Suncorp/mortgage broker to fix up their calculation of the LMI for fear of more mistakes. I wonder whether I should chase that up after settlement though? More on principal than the cash itself though.

Settlement is on Monday, so let's see what happens...

I wonder... does this sound like an unlikely sequence of misfortunates? Or should I be questioning whether either/both my mortgage broker and my lender are inept?





Hi XXXXX

If Suncorp calculate the LVR for my current property at 87.6%, they've actually made another mistake there also. My logic follows:

87.6% x $385K valuation = $337,260 total loans

$337,260 - new loan $79,235 (including LMI) = $258,025

Which means I would have to owe $258,025 on my current mortgage. However, the balance of the loan has been $247,240.38 since 29/01. Now let's just say Suncorp include in the "current debt amount" the amount we're ahead in "extra repayments" (as one person from Suncorp advised me they do), that would add around $2,000 to it - still far short of $258K.

It seems to be of no coincidence that the final LVR of 87.6% seems to work out perfect based on our current loan balance (plus the amount of "advance repayments") and on a property valuation of $375,000 - the original "unrevised" valuation amount.

So not only have Suncorp screwed me by including the "advance repayments" as part of the current debt, but they've used the wrong ($375K) valuation, hence resulting in the $735 LMI.

Whilst I understand that banks can make errors from time to time, I'm fairly displeased that Suncorp have not only caused legal delay of the unconditional period; made a balls-up of the PPOR valuation; miscalculated the LVR; overcharged the LMI; but now likely caused incurment of penalty interest due to failed settlement after making a mistake on the actual loan amount.

This makes me wonder whether Suncorp should perhaps be liable for any such penalty interest, not to mention reimbursement of overpaid LMI. Part of me thinks it's a petty amount to pursue, but the other part is mindful that Suncorp owe me some level of service now that they will be receiving some $46,000 p.a. from me in total repayments, fees and insurance policies. And somehow, I don't think Suncorp would let it slip if I were to forget to pay them even the smallest amount of money!

 

[Aaron Sice]

don;t you have 3 days grace anyway?

still, sounds like a comedy of errors. not good for you, but a good read.

 

[kegger]

I would be getting a new mortgage broker. Had similar experiences, not to that extent though. The broker should be proactively chasing all this up for you. Looks like they don't really give a damn.

 

[deanthomas]

Yeah been there too. I flicked my broker off after my dramas (after settlement of course), and now of got a good one which I hang onto. Like you, mine was very nice and polite but totally totally inept. Thinking it might have been 'one of those deals that do go wrong' , I invited him back for another go and he stuffed that up too, thankfully I had my other broker working on the same deal.
Oh well, my advise is, chase the deal through to the end, pay what you need to pay (penalty interest), learn from it, flick the broker, use another bank if you can in the future, and keep at it.

Dean

 

[Perp]

Hang in there, Lukey13. I know it's frustrating, but it's part of the game.

Yes, some transactions go more smoothly than this, but I'd say that at least a third of my purchases have been more problematic. I don't think this is anything really out of the ordinary.

I'd be interested in other opinions, but I don't think that many of these things are in the broker's control. The valuation is outside the bank's and the broker's control, and in the current environment valuations are very conservative. I know that 14 days for finance is pretty standard, but I've rarely achieved finance approval in under 21 days, even when I was "pre-approved"! The banks seem overly bureaucratic and they've cut back their staff so much that they just don't have the people to process loans in a timely manner, regardless of heavy duty pressure from the broker.

Bring on electronic mortgage and transfer documents...

 

[kissfan]

Hi Lukey13.

You'd probably find that most on here have had some sort of drama when purchasing or selling a property. As Ozperp says, "it's part of the game".

Work through it, one hurdle at a time and before long, it will be a distant memory.

Then, guess what, before too long (all things going to plan), you'll get to go through all that frustration again with your next purchase.

The alternative is to say that it's all too hard and do nothing, but guess what you'll end up with.....

All the best
Marty

 

[Lukey13]

Thanks to everyone for their kind support and encouragement.

Indeed I am now seeing it as a comedy of errors. After being frustrated for a day, I've now moved on.

The next update in the saga is that Suncorp will not be able to draw up new loan documents until next week (after settlement). The mortgage broker has accepted full responsibility for the loan amount error and has kindly offered to pay for all default interest. My solicitor is now asking for settlement to be delayed 7 days.

Ah well. More time for me to find a tenant, I suppose.

 

[Lukey13]

Actually, my only concern now is whether Suncorp are likely to increase their fixed rates prior to settlement.

I do know that Suncorp haven't put up their fixed rates since the last rate increase and for a little while now (January, I think?).

Anyone have some "insider" knowledge or willing to take an informed punt?

 

[evand]

Its a too common scenario from 'your team of experts'. I have been through this crap so many times.

I went to my solicitor and had a letter drawn up asking for compensation of additional penalty expenses/fees charged. Also stating failing that legal action will commence.

Every time they have paid up. If you are penalised unfairly by these 'experts' mistakes i suggest you do the same. You don't have to accept this rubbish.

 

[Witzl]

Good to hear that your broker is covering the costs of the penalty interest due to his stuffup. I guess this is one of those things you just chalk up as experience, and move on as a wiser, more knowledgable property investor....

... with a new bank and mortgage broker. LOL

 

[Rolf Latham]

Hiya

Suncorp, there is much of the problem if trying to get something settled quikcly

Just a quick Question, the advance repayments.............can they be redrawn ?

ta
rolf

 

[VYBerlinaV8]

We have had screw ups in some form each time we have bought property, although they have varied in magnitude. Considering mortgage brokers and banks do this stuff every day of the week, it's surprising there are so many mistakes. You'd think they'd lift their game a bit.

That said, I have a mortgage broker I got onto through Aussie Home Loans, and he has been great (and we haven't ended up with any Aussie loans!). Sometimes you have to deal with a few knobs to get to the right people.

I know it gets frustrating, but there will come a day when you will laugh about this. Probably when you're rich.

 

[poppy]

I wonder... does this sound like an unlikely sequence of misfortunates? Or should I be questioning whether either/both my mortgage broker and my lender are inept?

Not an unlikely sequence at all... this is pretty normal.

As far as I know most lenders are inept (if anyone knows of any consistently non-inept lenders, please share). Brokers are usually a bit better, as many of them rely on commissions to pay their bills, unlike the bank staff, who have no incentive to do the job properly.

 

[Lukey13]

Hiya

Suncorp, there is much of the problem if trying to get something settled quikcly

Just a quick Question, the advance repayments.............can they be redrawn ?

ta
rolf

No, the advance repayments can't be redrawn (due to paying 6.55% fixed rate), but they do mean we can "skip" repayments until the advance repayments balance drops to $0

 

[Lukey13]

Actually, my only concern now is whether Suncorp are likely to increase their fixed rates prior to settlement.

I do know that Suncorp haven't put up their fixed rates since the last rate increase and for a little while now (January, I think?).

Anyone have some "insider" knowledge or willing to take an informed punt?

Guess what...

Suncorp have increased their fixed rates today by 0.2%

Oh well, at least I know it's only $3,350 extra over the loan term - could be much worse.

 

[Rolf Latham]

Hiya Lukey

That advance repayment limit MAY have something to do with the higher LMI too, unless u have clarified to LOWER the loan limit. AS you say it doessnt have redraw, often banks dumb systems dont know that

ta
rolf

 

[Lukey13]

Thanks Rolf.

Indeed Suncorp do calculate "advance repayments" as "current debt" when calculating LVR and LMI.

My original problem though was that Suncorp had also calculated LVR based on an old valuation of my PPOR rather than a revised one I had them do due to the original one being way below market value.

It seems as though they try to get you every way they can. And now they're going to sting me with the increased fixed interest rates that I discovered this morning!

But no point stressing about business.

 

[evand]

Can i ask why you accept losing money from others ineptness?

In my opinion the majority of 'experts' in any field are pretty useless or just average. Especially when they dont receive their payment based on results...like FAs and mortgage brokers.

 

[steveadl]

Lukey,

Don't know if Suncorp do it, but CBA allows you to lock in a rate for your loan up to 1 month (?) before the loan is issued. They charge $300 for the privelege.

So if you're expecting them to increase them again soon with the next RBA rise etc. - perhaps it's an option you could look into. Having said that, perhaps since they've just raised it .2% this week like you said, may not be worth doing if your settlement is (hopefully) in a few days.

 

[Lukey13]

Lukey,

Don't know if Suncorp do it, but CBA allows you to lock in a rate for your loan up to 1 month (?) before the loan is issued. They charge $300 for the privelege.

So if you're expecting them to increase them again soon with the next RBA rise etc. - perhaps it's an option you could look into. Having said that, perhaps since they've just raised it .2% this week like you said, may not be worth doing if your settlement is (hopefully) in a few days.

Yeah, Suncorp do have the option of paying for an interest rate "lock". In fact, I did it last time to secure the 6.55% we still have on our PPOR.

I can't really complain too much about having to pay an extra 0.2% on a deductible loan when I'm still paying 6.55% on a non-deductible loan.

The only scary thought though is what's going to happen in 2009 when the 6.55% period comes to a tragic end!