LMI was Declined / Rejected...

[harry216921]

Hi all,

My LMI was declined after the loan was approved Homeside, due to not declaring a credit card (even though this would not have effected the outcome)...

Are there any steps I can take to get this pushed through still... or am I dead in the water?

Cheers,
Harry

 

[Rolf Latham]

Hiya

Depends................

GE are a scared bunch at the moment.

if the loan was at 95 %, it would have to be very clean and simple to get through.

If the card ofr yours wasnt used for a while u might have half a chance to say you did forget,on the assumption that this was the case.

The problem with non disclosure, or even perceived non disc, is that they will be wondering what else hasnt been told. So they feel they cant fairly assess the risk.

ta
rolf

 

[Peter_Tersteeg]

If it was a 95% LVR, they're looking for a reason (any reason) to decline the application.

There's one or two alternatives, but not many and they're not quite as compeditive as HomeSide.

If it was a 90% LVR, there are plenty of compeditive alternatives.

 

[Perp]

So why didn't you tell them about the credit card, out of curiosity?

 

[stumunro]

Try bank of QLD. If you can find a 10% deposit, they don't require LMI. That's the only thing I can think of at this stage

 

[Perp]

Try bank of QLD. If you can find a 10% deposit, they don't require LMI.

I think that should read "don't always require LMI". I'm pretty sure that they decide on a customer-by-customer, project-by-project basis, whether LMI is required.

 

[harry216921]

Well it was a case of I forgot... The card doesn't live in my wallet, and has only been used literally 3 times in it's life. It could also be closed tomorrow if required.

Due to Homeside being so busy recently, I've already had two extensions for my finance, and unfortunately tomorrow is the last day in this extension.

I don't really have any faith in the MI's changing their mind, so was thinking more along the lines of using the equity in my fathers home as a guarantee for the loan... or something along those lines... I'm only new to the market, so am clutching at straws here...

 

[Perp]

Well it was a case of I forgot... The card doesn't live in my wallet, and has only been used literally 3 times in it's life. It could also be closed tomorrow if required.

If the card has a zero/negligible balance, and hasn't been used in a long time, provide statements demonstrating this, and apologise for forgetting. If they still say "no", then it was probably just an excuse and there's some other reason they don't want to do the deal. Don't take it personally; it's not necessarily related to you personally; it could be they want to reduce exposure in the area in which you want to buy, or one of a thousand other reasons that has nothing to do with you as a lending proposition.

I assume that if it's Homeside you're using a broker. What does your broker say? Is he/she providing advice and assistance?

 

[harry216921]

She was going to speak with Homeside to see if they could persuade the MI to change their mind... that was on Friday afternoon.

I'll be following up first thing tomorrow to see what else we can do...

 

[Rangi]

I've heard bad things about Homeside at the moment around their turnaround times. Unfortunately Boq do require LMI with every deal at the moment, no LMI deals have all been stomped out.

As for the Credit Card issue, I feel they are pretty reasonable. Had one customer get rid of $30k worth of cards. And provided a personal loan for the stamp duty. 95% capped LMI deal. They just wanted to see that they could service the entire deal. Your lender could probably push it over, the difficulty being there are other deals that may be easier to do. And yours has gone to the too hard basket.

 

[harry216921]

I'll be going to the bank first thing tomorrow morning to close the card... can't see what else I can do really.

 

[rugrat]

Just a dumb question out of curiosity - How did they find out about the credit card if you don't use it? Or even if you do? I didn't think they could actually see what debts or credit cards you had outstanding - only that you had previously applied for them. Am I wrong?

 

[Belu]

i think your credit rating would show what you had applied for and got.

 

[THEHEATH]

To the best of my knowledge lenders have no way of knowing if a card was approved or not, only that you applied for...unless of course they were the issuer

 

[harry216921]

Well that's what I don't get... They see it from your credit rating (but don't see if it was taken up or not)... So, thinking honesty is the best policy, I advised them I had the card, but it was relatively unused...

Seems it would have been better for me to say the card was never taken up in the first place!

 

[Sunfish]

Seems it would have been better for me to say the card was never taken up in the first place!

But hang on Harry, you riginally said:

My LMI was declined after the loan was approved Homeside, due to not declaring a credit card

 

[harry216921]

It made it through Homeside (not sure what checking they do), and it wasn't until it got to the Mortgage Insurer that they queried the Credit Card application (from my credit check presumably) - at which stage I told them I had taken up the card and it did exist (rather than deny I had a card).

 

[Spectre]

Who do you bank with normally - if you're existing with a few lenders they may still do 95.

 

[Dragon]

Harry,

I think you will be fine if you can demonstrate the little use the card has had.

Based on what you have advised, there is no reason for the insurers to question your genuine omission of the card if you can show it has not been used and has now been closed.

Insurers and lenders ( with some variance depending on policies ) look for the last 6 months activity on your credit report to see if it matches up with your assets & liabilities on your application.

They also use a Risk Indicator to determine if you are likely to default based on a range of factors ( like a credit score ).

The bad news is, that even if they decide that you were genuine in your ommission of the card, if your RRI is low, they may not approve anyway.

Good luck, I will be interested to see how it turns out.

 

[jrc]

I wouldn't touch Homeside with a barge pole. They told me I was conditionally approved on a refinance subject to valuation. The valuation came in so that I was only borrowing 80%. Then they kept wanting more documents or further explanations of matters that ahd already been disclosed in my statement of financial position, income statements and tax returns eg wanting additional months of managing agents' statements when they had been given the most recent three months and given conditional approval on that. After two months when my contract with my MB was up I told him to forget it (he then told me he'd been having problems with Homeside for other people too) and took exactly the same documentation as Homeside had been given and went to Julie Anthony's friend. So far no hassles and as Dragon indicated their people can make decisions as long as within their guidelines.

I was also disappointed with the MB's failure to be proactive as he had been given my financial position and income and my investment plans over the next 12 months so it was not just a matter of one loan, but a strong continuing relationship could have been built up.

Lessons I have learnt:

1. Don't go with someone simply to save a fee. My loan had been with Wizard and if I refinanced through an Aussie broker I was not up for the deferred establishment fee.
2. As a result, in retrospect, I think as my broker had been dealing with one company only, he was not as up to date on issues as another broker might have been and was not proactive by saying I have had problems with X Bank, but Y Bank is more proactive.
3. Deal with the decision maker. If going through a MB satisfy yourself that if there is an issue that they have access to advocate your case instead of simply faxing off documents to an anonymous credit manager.


My perception is that many banks are trying to squeeze mortgage brokers out of the chain. A good mortgage broker will provide value and assistance to his clients. However, the MB who is just acting as a paper shuffler between the borrower and financial institution does not have a future.