Offer of finance withdrawn - sign of further credit tightening?

[Perp]

We had unconditional approval for a refinance, including a written confirmation letter dated 10th Dec 08. Not having received docs for signing yet, I emailed the lender last week to chase it up. In reply, I got an email saying we're no longer going to fund you! They said they're reviewing outstanding approvals in light of the "global credit environment".

This leaves us totally up the proverbial without a paddle but hey, hopefully our brilliant mortgage broker can sort it. (Right, Richard? )

Has anybody else had a similar experience recently?

 

[Rolf Latham]

Not unusual for second tier lenders to pull funding before settlement.

was a little more prevalent 6 to 12 mths ago than now, but it will still happen.

ta
rolf

 

[Bradsdad]

We had unconditional approval for a refinance, including a written confirmation letter dated 10th Dec 08. Not having received docs for signing yet, I emailed the lender last week to chase it up. In reply, I got an email saying we're no longer going to fund you! They said they're reviewing outstanding approvals in light of the "global credit environment".

This leaves us totally up the proverbial without a paddle but hey, hopefully our brilliant mortgage broker can sort it. (Right, Richard? )

Has anybody else had a similar experience recently?

Strange the documents weren't chased up for you before Xmas.

 

[Perp]

Strange the documents weren't chased up for you before Xmas.

This deal was done directly with the lender - not through my broker - as we got an unbeatable offer from a private bank to take all business to them. (Well, it would have been unbeatable if they'd actually followed through! I can make offers of finance, too! )

My private banker contacted me prior to going on Christmas leave and assured me that docs would be ready for signing when she returned from leave on the 19th Jan.

 

[buzzlightyear]

Tracey, who was the financier (if you care to mention)?

 

[Perp]

Bank of Queensland

 

[Player]

Has anybody else had a similar experience recently?

Not recently, however the early nineties were another story....

My feeling is that with the falling rates, we are seeing falling LVR's. Not sure of your leverage position Tracey, so certainly not passing comment, however I guess some banks are hedging their position to pay for their exposure to the smoke and mirrors of the US during the last bull run, or they can just change their mind

We are seeing more conservative valuations therefore reflecting these leaner LVR's.

I'm waiting to refi a couple this year, that are well below 50 % even conservatively. I'm thinking however as fixed rate loans start to mature the folks that were at 90, 95 or over 100 per cent LVR will have a difficult time, securing funds without coughing up some folding stuff or other security, as these values have softened to the peak.

 

[Perp]

Player, we are highly leveraged, but the finance was offered based on November valuations of our properties, and our situation has improved slightly since the finance was offered (reasonable cash injection).

I think, to be honest, that it's more to do with the bank's internals. The head of private banking (EE, for those who know the people) used to have sign-off authority for private bank clients; apparently that's changed just in the last few weeks, and now even private bank clients have to go through the regular credit managers. I think the credit weenies (I hate those ultra-conservative, inflexible, faceless #$@ers) had a look at it and decided EE was too aggressive in his offer of finance, which took us to > 90% on our portfolio. (Headline max LVR for BOQ > $1M is 70%.)

 

[timlea50]

Bank of Queensland

Tracey,

I heard "rumours" via various corporate contacts that they weren't able to secruitise certain areas of their own funding (in particular leasing).....so maybe this has spread throughout the organisation. I know their accounts will be out soon - so hopefully they can get themselves sorted - but I know they are focused upon yields right now - to maximise their return on limited cash - so rates are higher atm and approvals tighter. On the cashflow lending side they are still reasonably competitive.

I think we'll see more of these pulled offers increasing across the board - especially if we get a hint of going into recession.

Tim Lea
Cash Stream Financial
http://www.cashstream.com.au

 

[Player]

Yeah great isn't it? They want us to have large debts so we can be allocated a private banker, yet even they have to plead to the faceless in the ivory tower like Oliver Twist.....please sir, may I have some more......sign of the times perhaps.

Next.............you will not doubt find a $olution

 

[Perp]

I heard "rumours" via various corporate contacts that they weren't able to secruitise certain areas of their own funding (in particular leasing).....so maybe this has spread throughout the organisation.

I also heard their funding was tight/under threat... so it may be a combination of several factors.

In any case, leaves us up **** creek! Our land tax bill is way overdue, and we now have no way to pay. Let's see what dear Richard can find in that hat he pulls things out of...

 

[LynnH]

Bank of Queensland

Tracey,

Probably no connection whatsoever, but worth a mention: I note that BOQ share price is going down the slippery dip - and that the Fox family (Lindsay of Linfox Transport and offspring) have been selling down their previously sizeable stake in BOQ over the past several months.

I do hope you can find another source of financing - and quickly!!!

Cheers
LynnH

 

[Bradsdad]

This deal was done directly with the lender - not through my broker - as we got an unbeatable offer from a private bank to take all business to them. (Well, it would have been unbeatable if they'd actually followed through! I can make offers of finance, too! )

My private banker contacted me prior to going on Christmas leave and assured me that docs would be ready for signing when she returned from leave on the 19th Jan.

Hmmmm, was this done via email/in writing? May give you some grounds for them to re-look the deal. You shouldn't be held responsible for a staff member going on leave. It would interesting to see where BOQ stood legally if settlement didn't go through if your PB did put it in writing.


Regards
Steve

 

[Rolf Latham]

BOQ isnt alone in this sort of stuff

I have had 2of the big 4 come to settlement empty handed.............and declining to fund unconditional loans that have had docs even signed up.

ta
rolf

 

[Bradsdad]

BOQ isnt alone in this sort of stuff

I have had 2of the big 4 come to settlement empty handed.............and declining to fund unconditional loans that have had docs even signed up.

ta
rolf

Unless information contrary to what was supplied by the applicant at time of application came to light I would consider this VERY bad form.
Have any of your clients had legal advice in regards to this Rolf?

 

[Rolf Latham]

In one case we settled with cash from another transaction.

In another case the lender left itself open to a 110% LVR on a Near CBD unit..........we got that one to settlement eventually.

In another case a client took a bath of near 50 k.

Banks and lenders tend to have deeper pockets and less emotional involvement than my clients and I.

Thats why if diplomacy doesnt work, and apprpriate media exposure doesnt help, and you are going to bother with the legal route...........be well prepped for a long drawn out process.

ta
rolf

 

[Bradsdad]

In one case we settled with cash from another transaction.

In another case the lender left itself open to a 110% LVR on a Near CBD unit..........we got that one to settlement eventually.

In another case a client took a bath of near 50 k.

Banks and lenders tend to have deeper pockets and less emotional involvement than my clients and I.

Thats why if diplomacy doesnt work, and apprpriate media exposure doesnt help, and you are going to bother with the legal route...........be well prepped for a long drawn out process.

ta
rolf

Would be interesting to see the outcome if someone took it to the Ombudsman. Not saying it would be successful but would be nice to know an outcome should the matter arise again.

 

[GoAnna!]

Would be interesting to see the outcome if someone took it to the Ombudsman. Not saying it would be successful but would be nice to know an outcome should the matter arise again.

I agree. I think to let them get away with it without any protest does not send the right message and will only lead to an increase in such poor behaviour.

 

[Perp]

There was nothing new that could have come to light; we went to BOQ with open hands and laid our "not very good" cards on the table, anticipating rejection, and were delighted that they came to the party at all. Our situation has, if anything, improved since that time. It's just really frustrating to think you're home and hosed - with a written, unconditional approval - and then find that you're not.

Apparently, though, the lenders word their approvals and even mortgage docs such that they can walk away at any time for any reason whatsoever - or no reason - and not be liable for any consequences. In fact, they can even call in a loan that's in good standing for any reason, or no reason. I think they use Dazz's lawyers.

Let's face it, if you're in this game, one of the prices you pay is that your lender has you by the short and curlies.

 

[josko]

What a pain, Tracey.

Has your broker come up with anything new? Do you think your vals will be ok?

Regards JO