LMI refused by Genworth with incorrect short-term rental assumption

I have applied through Westpac for a 95% LVR loan on PPOR apartment, credit approved but advised Genworth refused LMI on grounds that "building contains short-term letting pool and assume that property will be used for such" :confused:

The property is:
* Being purchased "Vacant Possession" and unfurnished, therefore not part of any letting pool
* Standard Strata Title (as is the building)
* my PPOR, so I will be living there, not participating in a short-term letting pool

I have confrimed all the above with the Strata Manager and my solicitor has written a letter to the bank to re-iterate the above points.

Why are Genworth, apart from their incorrect assumptions, even concerned with short term letting in the building? Surely this provides lower risk to them as there is guranteed rental return for those that wish to participate in a letting pool?

Do I fight them or scrape money together to go 90% LVR? As per Rolf's email that Westpac use WLMI internally, instead of Genworth on 90% LVR; then the assumption is I won't have an issue with LMI approval.

Any similar situations, and possible resolutions?

Thank you for your support.

Regards
SydneyBuyer
 
Could also be the security type, have had deals declined by Genworth that were 95% LVR, client had perfect credit history, employment history etc etc.

Security was a unit, and so this was (as far as I know) a higher risk for Genworth.

Not sure if this helps, but for what its worth.

Kind Regards,

Alex
 
If there's over 35 apartments in the complex then Genworth will most likely knock it back anyway over 80%.

Letting pools can be a concern on occassions even if you are taking vacant possession. There maybe a clause in there that a certain % of apartments must remain in the pool. Should this number drop, the property in question could be forced back into the pool for any potential puchaser. This can deminish the amount of potential purchasers and as such decrease Genworths appetite.
At a 95% genworth will usually stick to their guns on any of their policies at present.
 
At 95% the lenders will approval applications, but the insurers are looking for excuses to decline it. This reasoning might have been ignored at 90%.
 
Im with Pete


Even with 80 % full docs, if the folk dont want the deal, even though it fits policy we are in trouble. Logic has gone out the door with assessors at both lenders and LMI companies adding their own personal flavour to the policy, thus adding an unpredictable layer of "probabilty to the application"

Id go and fight it personally, if your property isnt part of the pool, and can be owner occupied, and there isnt a high density issue its worth a considered argument.

The reason they dont like rental pool properties is that if you default, then there is a very limited investor only market and thus they may have to actually pay out on their policy.


ta
rolf
 
Thank you for your comments.

Re: Bradsdad comment "There maybe a clause in there that a certain % of apartments must remain in the pool..."

I have confirmed with Strata Manager and through solicitor that there is no clause as such. Letting pool is completely voluntary.

Any further comments and suggestions welcome. I'm particularly interested if I should go to 90% LVR in this PPOR or even leverage existing IP as collateral (Cross Collateralising), if so at what LVR are Genworth generally OK with?
 
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