HSBC Cheated On Me!!!!! Need Help!!!

[jcjchung]

I am a HSBC Premier customer (high value client) and have an excellent mortgage history with the bank. (had previous mortgage loans with the bank and never missed a payment)

Approx 2 months, i took out a loan in a foreign currency (HK$) loan maxing at 75% LVR- taking advantage of the 4% interest.

Prior to taking out the loan, I had asked my personal Premier mortgage manager that if the A$ falls and the property is in negative equity, would the property be subject to a call? He ensured me that as long as mortgage repayments are up to date, the bank would not make a call on the property. This was merely 2 months ago.

In the past month, the A$ has dropped significantly and today, i got an email from my premier mortgage manager saying since the A$ has dropped and the LVR is now 87% that I must A.) Provide additional security or B.) Put A$150,000 equivalent into the loan!!!!!!!!!

Are you kidding me???? Ive only made one mortgage repayments since the loan has been established and the bank has hit me with this.

I feel completely cheated!!!!! 1.) HSBC told me face to face that the bank will not 'call' on the property if mortgage repayments are made. 2.) Both myself and the bank discussed the A$ falling in the future and both parties predicted this happening in the future- why is the bank suddenly requesting additional security knowing this would happen but never mentioned additional security? Obviously they were more excited about me taking out the loan with HSBC!!!! I feel that I have been lied to.

What about all the people who took out loans back in 2003 peak and their property prices had fallen since. Their LVR now is greater than what was approved- but those people never had to provide additional security.

Im going to fight this to the end!!!! Would like to hear from anyone who can point me to the right direction for help.

The property magazines and smh would love a story on this.

 

[The Y-man]

He ensured me that as long as mortgage repayments are up to date, the bank would not make a call on the property. This was merely 2 months ago.
.

Do you have any agreement in writing? Verbal agreements are no good....

Cheers,

The Y-man

 

[jcjchung]

Only verbal

 

[kph]

The property magazines and smh would love a story on this.

Maybe... but only to highlight what can happen when you take out a loan in foreign currency to take advantage of the lower interest rate, and the FX implications if the currency moves against you...
Would make a good buyer beware story.

If you read the fine print in the loan docs you will probably find they are quite within their rights to make the call..

Sorry to hear about your misfortune all the same though!!

kp

 

[Rob Williams]

Only verbal

First thing I learned at Law School a lot of years ago was "a verbal agreement isn't worth the paper it's written on".
I'm sorry you are in this situation, but it's a valuable (yet expensive) lesson.

 

[Peter_Tersteeg]

Hi jcjchung,

I'm really sorry to hear about this. The pros and cons of cross-currency loans has been debated before any usually lenders only allow much lower LVRs than 80% for exactly this reason.

This is one of the major risks of cross-currency loans.

I don't have a solution for you, other than go back to your relationship manager. Please keep us informed with your progress as I'm sure lot's of people here would like to hear more about this.

 

[Firsthomelooker]

First thing I learned at Law School a lot of years ago was "a verbal agreement isn't worth the paper it's written on".
I'm sorry you are in this situation, but it's a valuable (yet expensive) lesson.

What law school did you go to? What about promissory estoppel?

 

[Rob Williams]

What law school did you go to? What about promissory estoppel?

Never said I stayed there Bored me to the point I wanted to stab myself in the eye with a blunt fork just for fun. Switched to IT. Much more interesting!!

 

[jcjchung]

Verbal or not. Hasn't HSBC broken the law by lying? As an Australian Financial Service provider, ASIC protects consumers from misconduct/ misleading information/ non-disclosure of risks by AFS members.

 

[Rolf Latham]

on the other side

there arent many ( any ? ) Forex products without a "margin call" clause.

Your detailed documentation read and signed by yourself may carry more weight than the verbal of a bankie.

AS has been suggested, the best bet is to go back to the branchie and then take it from there.

ta
rolf

 

[Firsthomelooker]

Never said I stayed there Bored me to the point I wanted to stab myself in the eye with a blunt fork just for fun. Switched to IT. Much more interesting!!

LMAO!

jcjchung I can't give you legal advice but, having made it thus far to my final semester of law school without stabbing myself in the eye with a blunt fork you should at least explore possible causes of action in contract (depending on the fine print), equity (estoppel - the bank can be 'estopped' from acting against its promise to you) or under the Trade Practices Act. Verbal agreements can be and often are enforced by the courts in one form or another.

 

[The Y-man]

Verbal or not. Hasn't HSBC broken the law by lying? As an Australian Financial Service provider, ASIC protects consumers from misconduct/ misleading information/ non-disclosure of risks by AFS members.

Make sure you have made notes of who you talked to, on which date(s).

Cheers,

The Y-man

 

[willfong]

The thing with verbal is, it will become you say vs he/she says. What evidence have you got that they lied to you? The bank employee could just as easily say he/she never told you so and there must have been a misunderstanding.

 

[Sunfish]

"A verbal contract isn't worth the paper it's written on."

This quote is attributed to the great Polish lawyer, Samuel Goldwyn.

If I were to set out to "discover" my rights in a contract, I would not accept either a movie producer's or a a failed graduate's word as difinitive.

Banks, correctly, are closely scrutinised re their contracts and you MAY even win a case against them based on what they didn't say.

You think I talk garbage? Google the events in the '80s including "Gnome loans" in the criteria. Aussie banks sent many people bankrupt, but those who still had some money left, successfully sued the banks for not mentioning exchange rate hazard. (Didn't help them what had no money left to hire a lawyer)

You were aware enough to ask about this risk, so your dilemma now is to decide whether is is economically viable to persue the matter. The harsh facts are that it could only work as part of a class action.

 

[MarkB]

what on earth will you thinking when you took out that loan?

 

[jcjchung]

Myself and the bank discussed exchange rate risks but the bank told me they will not call in the loan if the repayments are up to date. The loan is over 30 years, the $A will no doubt go up and down over 30 years.

The bank emailed me today and asked for additional security since the LVR is now 87% (instead of max 75%)- since when can bank ask for more security if the LVR increases after settlement? What about all those people bought properties in Sydney at peak 2003 and their properties are in negative equity, as long as their repayments are made, the bank will not call in the loan or ask for additional security right? (correct me if im wrong)

 

[The Y-man]

since when can bank ask for more security if the LVR increases after settlement? What about all those people bought properties in Sydney at peak 2003 and their properties are in negative equity, as long as their repayments are made, the bank will not call in the loan or ask for additional security right? (correct me if im wrong)

They can, and I understand they have in the past - even if the repayments are up to date.

Cheers,

The Y-man

 

[MarkB]

Your loan has a whole extra (large) layer of risk associated with it, so I don't think the comparison is particularly valid.

If it was as simple as borrowing money from HK @ 4% or Japan @ 1% and riding out currency fluctuations over a 30 year mortgage, then everyone would be doing it, wouldn't they?

 

[handyandy]

Myself and the bank discussed exchange rate risks but the bank told me they will not call in the loan if the repayments are up to date. The loan is over 30 years, the $A will no doubt go up and down over 30 years.

The bank emailed me today and asked for additional security since the LVR is now 87% (instead of max 75%)- since when can bank ask for more security if the LVR increases after settlement? What about all those people bought properties in Sydney at peak 2003 and their properties are in negative equity, as long as their repayments are made, the bank will not call in the loan or ask for additional security right? (correct me if im wrong)

Apart from the risk mentioned the other aspect of the loan is that the FX is quantified on a daily basis with your security in AUD and translated to the foreign currency.

With standard loans the $ value is stable and property valuations are not carried out on a daily, monthly or even yearly basis (if ever) so no adjustments at all.

A similar product to you FX loan is a margin loan against shares where the shares are revalued (daily) and the LVR is adjusted accordingly.

As someone has already mentioned 'what were you thinking?'. Even over 30 years at a point when the AUD is at its strongest, where is the advantage!!

Cheers

 

[Alex P Keaton]

You might wanna use the search button next time and do some research first.

Borrowing offshore at lower interest rates.