Possible steps after loan app rejection?

[Michael_X]

So here is the situation.

A good friend of mine is in the process of financing a purchase. He selected a broker from this forum but unfortunately after the application was submitted have heard very little back. He has already asked for an extension, and we are close to the third week and still nothing. The broker has blocked his number and not responding to his emails.

Unfortunately this isn't new for this broker as there are other threads regarding his services.

On the loan app rejection we are trying to reach out to a BDM directly but haven't had any confirmation just yet. I have advertised my friend to reach out to other brokers for help but if the loan has already been rejected by Macq Bank what are the alternatives from here?

I really want to help my friend get this deal across the line as it's his first investment property and really starting to look shaky

 

[Peter_Tersteeg]

The best way to proceed is to determine why the loan has been rejected. It does happen and if you know why it puts you into a better position to find a more suitable lender. Macquarie is very particular about the loans they'll fund at the moment, there are other lenders who are far less conservative who'll do things that Macquarie won't.

Based on your comments, it's possible that the loan hasn't even been lodged.

I'd start with the brokers aggregatior. The brokers aggregator (if I think I know who you're referring to) is Vow Financial 1300 656 922.

They can put you in touch with this particular brokers BDM who will be able to clarify things, including why the application may have been rejected.

Once you've determined why the application is rejected, you can proceed with a lender more suited to the circumstances of the borrower.


If you get no help from this avenue, feel free to give me a call. I'd be happy to what I can do to get some answers, although the privacy act may stop this.

 

[Michael_X]

Wow thanks PT_Bear!

Very helpful, will try and let you know how we go.

 

[Hodge]

Wow there's a possibility of the broker not lodging the loan? That's appalling! What is wrong with people?

 

[Michael_X]

From my understanding the loan has been lodged or that's what the broker has told my friend.

The broker said it's in the queue and waiting to be processed, it's now been 2 weeks.

I've had three apps with Macquarie lodged after my friend and they have all come back. So the suspicion is it's stuck but he won't say why.

 

[westminster]

Wow there's a possibility of the broker not lodging the loan? That's appalling! What is wrong with people?

I had a crap broker in Perth do this to me. Told me my app had been rejected for the Gwelup property when it turns out it wasn't even lodged. Luckily I managed to get another broker and 2 finance clause extensions later it was mine.

 

[Peter_Tersteeg]

From my understanding the loan has been lodged or that's what the broker has told my friend.

The broker said it's in the queue and waiting to be processed, it's now been 2 weeks.

I've had three apps with Macquarie lodged after my friend and they have all come back. So the suspicion is it's stuck but he won't say why.

Turnaround time with Macquarie is currently about 2 days.

 

[Hodge]

What would be the reasoning for not lodging a loan? Wouldn't it be better to just tell the client you don't want the job?

 

[TMNT]

Was it a broker from Victoria??? inner city?

 

[Hodge]

Was it a broker from Victoria??? inner city?

And loathes the western suburbs of Melbourne?

 

[Kinnon Bell]

And would come just after aardvark in the dictionary.

 

[Michael_X]

Don't want to say too much in case I get banned but he is the same broker as mentioned in the 'How long would you wait on a broker?' thread.

It was actually after reading that thread today I was like holy crap, this could be why the app hadn't gone anywhere in two weeks and explained alot.

 

[Mick C]

Maq has one of the quickest turn around ( after Homeside) " currently" anyway hahah - normally the file will come back within 2 days, so can't see why it would take 2 weeks- EVEN if it's an LMI deal.

Sounds like the deal haven't been submitted.
Have your frd been given a "conditional" approval letter on a Macq bank letter head?

Your friend has the right to call Macquarie mortgages and find out where his /her application is currently sitting ( presuming it has been submitted)

======
Worst case, if the deal is "rejected", there are
- Non banks that will look at deal on a case by case basis and out of the box loans
- NO LMI deal at 95% LVR ( Ie self insured deal- risk fee ( similar to lMI) applies still)

But need to know the reason "if" it is rejected, as it might just be a case of applying to the wrong lender....

 

[Michael_X]

No 'conditional' approval letter.

I hope it hasn't been submitted either, finger's crossed.

 

[r3ckless]

I dont know why people sign contracts before getting a preapproval. A preapproval will provide you the confidence knowing how much you can borrow and when you do sign the contract, really the only condition involvled in most cases is a potential valuation...

 

[Perp]

I dont know why people sign contracts before getting a preapproval. A preapproval will provide you the confidence knowing how much you can borrow and when you do sign the contract, really the only condition involvled in most cases is a potential valuation...

A pre-approval's near worthless, IMHO. There are a lot more "subject to" conditions on a pre-approval than simply valuation - which is in itself a huge proviso - such that it wouldn't increase my confidence one iota.

 

[r3ckless]

Really?

The other "subject to" conditions are very easy for the borrower to control eg income/updated financial statements etc

IMO the preapprovals are brilliant in terms of knowing the loan amount you are after, knowing the budget or brackets on how much you can spend. Finally I believe a great reason for the preapproval is to know the setup and structure... This will save a lot of time. EG, what if you purchase a property, and have a 5 day cooling off period. Lets say a valuation is required.. If your preapproval isnt in place, day 1 speak to lender/broker. Lets say they put in your application same day and it might have to be assessed from the banks credit team.. budget 2 days for that... You are already into day 3 and its been assessed as "conditionally eligible" (like a preapproval) and now you only have 2 days left to order a val, have the report come back to see if you can make it unconditional.... In the above scenario, you have already wasted 3 days trying to get the loan approved firstly...

Thats my view on why Preapprovals are vital!

 

[Mick C]

A pre-approval's near worthless, IMHO. There are a lot more "subject to" conditions on a pre-approval than simply valuation - which is in itself a huge proviso - such that it wouldn't increase my confidence one iota.

A fully checked and credit approved and LMI approved pre approval is def useful. Especially for the more tricker deals.

These pre-approval picks up any changes we need to make prior to full approval.

 

[Perp]

The other "subject to" conditions are very easy for the borrower to control eg income/updated financial statements etc

EDIT: In thinking about it some more, these might be all from the old days, when pre-approval was done without much documentation being submitted, i.e. the bank basically checking a serviceability calculator. So it may well be a moot point, and today's much more thorough pre-approvals may have a lot more value. (Though the last one re the lender wanting to reduce market exposure in a sector was definitely after a full-doc pre-approval.)

I've discovered many things after pre-approval that rendered the pre-approval worthless, including:

"Oh, you changed employer but are doing the same job in the same industry? Most lenders consider that stable employment but this lender doesn't"

"Your boss claims you're an employee but we deem you to be an independent contractor"

"The valuation's come in 40% below purchase price"

"The last ITR is prepared but not yet lodged and because you don't have the statement the ATO sends post-lodgement, it doesn't count as a valid ITR"

"We're now seeking to reduce the number of loans in that market sector and no longer wish to offer finance" [Got them to stick to commitment eventually, but took two months to do so.]

yada yada yada

Though admittedly, I've had structures and a few fairly complex deals. With two PAYG earners buying standard residential property in their own names, a pre-approval may be more useful.

Regarding time, that's a fair point with regard to common terms in Vic/NSW, but I simply won't and don't buy under those conditions. I only buy when I can have a "subject to finance" and time to get it done.

 

[eggnog]

I wanted to ask who the broker was but the thread "how long to wait..." got closed