NAB to 'loosen' lending criteria....

I noticed in the weekend's Fin Review that NAB are saying they are going to loosen up their lending criteria citing some of their recent profit reduction on a previous over-tightening on lending.



:)
 
Hiya Alan

Part of that is they are going back into the Lo Doc lending market, that they played with about 18 mths ago.

Its a not bad product, BUT like most, its mortgage insured between 60 and 80 % Lvr

ta
rolf
 
G'day

Couldn't resist this opportunity to sing HomeSide's praises:

Lodged an application by Fax Wednesday evening, confirmed at 10.30am Thursday that it had been received, was amazed to be SMSed and emailed at 4.30pm Thursday of conditional Approval of the loan!

Quelle Amazement! Same Day Service!

Six hour turnaround for conditional approval (subject to valuation)!

This was a 90/10 No Genuine Savings application.

If this is an indication of HomeSide's future service parameters plus their more relaxed lending criteria - well, what more can I say?

Cheers

Kristine
 
Hi Kristine.

NAB were acknowledging how bad they had become in this area and mentioned 'how mang kgs of doco' was required for fairly simple loans.

The other bit I liked was the personal example the CEO used how it took about three months for him to get a PC when he started and the approval paper trail seemed to go around the globe! How would you have liked to be the person responsible for creating that personal memory in the new CEO's memory bank? Possibly not the best career move! :D


:)
 
Having just been told by the nab , after applying for an io loan that was declined , that im to rent reliant and what would i do if all my renters were empty ? i would find that hard to beleive.
 
mitch said:
Having just been told by the nab , after applying for an io loan that was declined , that im to rent reliant and what would i do if all my renters were empty ? i would find that hard to beleive.
I've sepnt 18 months being declined by NAB. They still have their use, but my mortgage broker has been able to weanme off NAB and to get some excellent loans elsewhere.
 
mitch said:
Having just been told by the nab , after applying for an io loan that was declined , that im to rent reliant and what would i do if all my renters were empty ? i would find that hard to beleive.

I would ask them , "How much reserves would I have to have for you to be happy?" Also , what is your strategy to handle unexpected need for cash? Maybe their is some other reason, they want to decline your loan, but this is the easisit reason to tell you. A few years ago, another invester explained to me how his loan applications just started gettin g refused. He eventually worked out the the bank/banker had a rule like max loan amount must be < $x
 
Gday cheezal,

told them l have 17k in loc should the unthinkable happen.

The question " what would you do if all your renters were empty "(and they already have the answer) is a reflection of the mentality of the people l have to deal with and l never get to talk to the person declining my proposal so if anyone see`s me aproaching the nab with an investment proposal PLEASE belt me over the head with a large blunt object and tell me to come to my senses.

Regards mitch
 
They are already factoring a 20% vacancy rate, which is probably already their worst case scneario- you could probably prove a 5% vacancy rate (at a guess), possibly over a period of time.

But Cheezal could well be right. Your figures may be over their comfort zone. I was told that NAB start to get nervous over $1M in lending- past that, and other "reasons" are just excuses.
 
Rolf Latham said:
Tell them your broker says CBA or Heritage for ALL your business and watch the NAB come back :O)
Hmmm... I took half my loans from NAB and gave them to Heritage, but NAB still won't play ball... though that may have something to do with a big undrawn LOC.
 
Hi,

18 months ago I had the same experience with NAB. They would not approve any more loans. My loans must have reached their comfort zone. I moved my loans to CBA, got additional $700,000 loan to buy two more properties with great rates and according to the Personal banker I would be able to borrow more if needed.

Cheers,
Roger.
 
Hi Roger

Thats great !

CBA isnt always the solution though. Different circumstances and structured lending (right lender, right time in the investors cycle, right product) can often produce much better results than a mono lender approach.

EVERY investor with a larger portfolio will run out of serviceability, or fall out of favour with a single lender at some point, and then the often slow and painful task of exploding the current structure and rebuilding begins. Those that have been there will back me on this Im sure.

I sat with a prospective client last week who has more than a dozen Sydney IPs, all with the NAB, all crossed and guess what, after providing a blanket approval of another 2 mill, they piked at 400 000. What gives with these people ?

ta

rolf
 
Hi guys,

I have been with NAB for quite some time now. It seems that what is critical is the quality of the person you are dealing with. In the early stages we had some pretty ordinary personal bankers and were less than happy with their service.

However our personal banker Chris located at St Kilda Rd branch, Melbourne whom we have had for the last few years is absolutely fantastic. The service he provides has been some of the best I have ever experienced. And just as importantly he always fights for the best deal for us. Most of the paperwork is sent to us already completed and often not much more than a signature is required even for Hybrid Discretionary trust loans.

Just thought I would throw in my too bobs worth.

Cheers - Gordon
 
mitch said:
what would i do if all my renters were empty ?
"what would you do if all your depositors wanted their money back at once?" :p Answer is the same, worst case is not going to happen, which is why we keep some reserves on hand.
 
austini said:
I have been with NAB for quite some time now. It seems that what is critical is the quality of the person you are dealing with. In the early stages we had some pretty ordinary personal bankers and were less than happy with their service.
I've had two excellent PBs in the seven years I've dealt with NAB. But no matter how good the PB, if you exceed their criteria beyond the PB's discretion, there's nothing the PB can do for you.
 
Hi All

There is another thing as to why sometims it may not be good to have all your loans with the same lender, and this is risk management.

This applies especially where you have a number of structures and or IPs outside and inside of structures.

MOST loan contracts provide for an "all monies" situation or "if default in one loan we deem you to be in default of the other". Effectively nullifying the trust structure from a "lender risk" point of view.

Usually not a problem for those with one or 2 ips, BUT as you get more and more IPs the issue may become more burning.

ta

rolf
 
I don’t think it matters whether you are with NAB WBC ANZ or Widget Home Loans , what is important is that you have a strategy for the future and continuation of borrowings. It’s not good enough to think my banker understands my situation. You need to be mindful of your lenders strengths and their weaknesses.

For example…
substitution of securities in the future and what sort of flexibility will your lender give you?
Will they take cash as security as opposed to Real Estate?
What will they lend on and what won’t they lend on?
Will they fund over the dividing range and at what levels?
When does Mortgage insurance kick in? (it’s not always @ 80%)
Who is their mortgage insurer?
Are any of your old loans still mortgage insured? Like your first IP that was done @ 90%
Can you sell one IP and realise all the gains or will the bank want some funds back to reduce their total exposure?
Are they cross collateralising my portfolio?
How much experience does my Bank Jonny have in lending?
When is their productivity review?

All of the banks will love you when you first approach them. But remember you are only as good as your last repayment.

I think you should start out with one bank for your first few IP’s but then spread your risk a bit, use another lender, to firstly keep your relationship manager on his / her toes and secondly for risk management and also flexibility.

No one bank is better than an other, they all have strengths and weaknesses, it depends on what you want to do and where you are at. NAB have some real strengths like acreage and inner city apartments, blocks of flats @ residential rates, trust friendly but they have some weaknesses too… generally no discounts on LOC products, cross collateralisation of your portfolio’s loans (this is now avoidable if you persist). So it’s horses for courses and I’m with Rolf, spread your risk and stay in control.

It’s up to you to manage your assets not them.
 
And the RBA is now saying that lending criteria are too LOOSE as banks throw caution to the winds and over-rely on mortgage brokers.

While the bank thinks I'm too rent reliant (it's a bank that HASN'T yet been named in this thread), I'd say that I'm actually mortgage-broker reliant. And loving it!
 
Hi,

I'm also a big fan of splitting up my loans portfolio across different lenders. I think it gives me some free insurance, even if it is only a few weeks, in case something goes terribly wrong. Call me paranoid, but...........

In my experience, though, one a bank gets "spooked", you may as well just move on.

Cheers, Medine.
 
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