Turned down by Genworth for 80% LVR loan

I recently applied for a 80% LVR loan from a nonbank lender (cheap rates) and after jumping through all the hoops, out of the blue one day I get an email saying "bad news, Genworth said no". I called to clarify and was told that while the lender's credit team was happy to go ahead, Genworth turned down my application and didn't provide the lender any reasons. Apparently because nonbank lenders are off-balance sheet (they package mortgages and onsell onto debt markets) all loans are LMI insured, even 80%LVR.

Hoping to get some insight from here - what could have caused this?
 
Bummer. You should be able to get a reason.

Plenty of mainstream lenders out there with competitive rates these days. Before proceeding though - you need to find out why you were knocked back.

Do you know how your credit file looks?
 
Bummer. You should be able to get a reason.

Plenty of mainstream lenders out there with competitive rates these days. Before proceeding though - you need to find out why you were knocked back.

Do you know how your credit file looks?

Interesting things on my credit files are:

  • Many enquiries over the years from different lenders, each because I applied for a loan. I don't go ahead with all my applications, sometimes I withdraw the application, sometimes I accept another loan offer etc. No loan declines though.
  • 6 years ago I ceased a directorship
  • Recently applied for several credit cards to get some Qantas points. Most are already cancelled, waiting on the last few to give me points then will cancel the cards.
 
It could be credit scoring or something very specific however at an 80% LVR it is unusual that it would be credit scoring.

You should really find out what the issue is (they should be able to tell you) so you can combat this for the next application if required.

You may also need to use a lender with their own DUA and QBE as their mortgage insurer (i.e. Suncorp, NAB direct, etc)
 
Interesting things on my credit files are:

  • Many enquiries over the years from different lenders, each because I applied for a loan. I don't go ahead with all my applications, sometimes I withdraw the application, sometimes I accept another loan offer etc. No loan declines though.
  • 6 years ago I ceased a directorship
  • Recently applied for several credit cards to get some Qantas points. Most are already cancelled, waiting on the last few to give me points then will cancel the cards.

Active credit file or heavy rent reliant is 2 of the most common reason for 80% LVR LMI rejections.

Just apply for with a traditional bank with BALANCE sheet lend ( ie NO LMI) at 80% + No credit scoring ( yes it won't be dirt cheap rate like loans.com.au etc...but at least you get your loan approved at a "Decent rate")

Cheers
 
It could be credit scoring or something very specific however at an 80% LVR it is unusual that it would be credit scoring.

You should really find out what the issue is (they should be able to tell you) so you can combat this for the next application if required.

You may also need to use a lender with their own DUA and QBE as their mortgage insurer (i.e. Suncorp, NAB direct, etc)

During my phone call with the lender, she made it clear that Genworth didnt provide any details to them nor will they to me. What else can I say in addition to the conversation I already had?

Also what is a DUA?

thank you
 
They should be able to tell you so you may need to do the whole "put me onto your manager" line.

I strongly recommend you find out why it has been declined.

A decline at 80% is pretty rare so there must be something thats not right.

I recommend ascertaining a copy of your credit file and seeing if there are any unpaid defaults on your file.

If its not a default then you should be ok but worth having a definite plan before applying elsewhere.

DUA = delegated underwriting authority which means that the lender doesn't need to approve and then pass it onto the mortgage insurer. They can approve the loan themselves.

Again at 80% something doesn't look right.
 
Active credit file or heavy rent reliant is 2 of the most common reason for 80% LVR LMI rejections.

Just apply for with a traditional bank with BALANCE sheet lend ( ie NO LMI) at 80% + No credit scoring ( yes it won't be dirt cheap rate like loans.com.au etc...but at least you get your loan approved at a "Decent rate")

Cheers

I'm probably a bit rent reliant - serviceability cleared but only just.

Can you please elaborate on Active Credit File?
 
Im going to be blunt, and its not directed at you per se ( since I know zip about your circumstances) but others that will pick up this thread sometime in the future.

The core reason is the expectation of price of rate vs ready availability of funds........

I guess the funder never even told you that you would end up with at least 2 credit enquiries for the one loan, and that may have been rent reliant. This "mud at the wall" approach isnt just from cheapies, but also well regarded high servicing lenders with their own DUA,where the loan fails DUA.......... the lender will often flick it to the insurer, even though it NEVER had a hope of approval, thus "twisting the knife".

Its a good lesson that no funding is ever guaranteed, and all things have a price.

ta

rolf
 
Non bank lender at 80% for rate???

There's a reason the big four dominate the market .... Better the devil you know.

With all my experience, I'd never put my lending with a non bank to save a few points!!
 
It could be that they are over exposed - maybe you have other mortgage insured loans or possibly they have already insured 25% (etc) of the units in the development.

Or more likely you don't service under Genworth's calculations.
 
I went Wizard in 2006. Best interest rate. Didn't need bells and whistles because I had another mortgage with a Big 4. By the time we discharged 3 years later it no longer had the best interest rate. Non bank might have their place but there is less guarantee that they will move in line with the Reserve.
 
I went Wizard in 2006. Best interest rate. Didn't need bells and whistles because I had another mortgage with a Big 4. By the time we discharged 3 years later it no longer had the best interest rate. Non bank might have their place but there is less guarantee that they will move in line with the Reserve.

2 years after that they weren't even trying to be competitive. Their rates sky-rocketed during the GFC and didn't come down with the market afterwards. Combine that with draconian exit clauses and a lot of people got hurt very badly.

Small lenders offering cheap rates is really wonderful when times are good. When things get a bit rough these are the lenders that get into trouble and you don't ever want a loan with a lender that's got it's own financial problems.
 
2 years after that they weren't even trying to be competitive. Their rates sky-rocketed during the GFC and didn't come down with the market afterwards. Combine that with draconian exit clauses and a lot of people got hurt very badly.

Small lenders offering cheap rates is really wonderful when times are good. When things get a bit rough these are the lenders that get into trouble and you don't ever want a loan with a lender that's got it's own financial problems.

I was bitten the same way. GE from memory.
 
Wizard was sold to GE Money shortly before the GFC. Mark Bouris built Wizard to the point where it looked like a highly valuable business, then sold it off as soon as was viable to what amounted to the biggest sharks in the industry. I'll never do business with GE Money.
 
It could be that they are over exposed - maybe you have other mortgage insured loans or possibly they have already insured 25% (etc) of the units in the development.

Or more likely you don't service under Genworth's calculations.

the lender finally found out and told me - undisclosed credit cards and HECS liabilities was the reason.

Honest mistake (totally forgot about them) and wouldn't have been consequential to the deal, I'm wondering why Genworth didn't just ask me about these and I would've fully disclosed everything. INstead they just kill the deal no questions asked as soon as they find something undisclosed. Is that normal procedure?

Also would this affect future applications with other nonbank lenders that also LMI with genworth?
 
How does someone not disclose HECS?

I appreciate that people don't remember they've got a HECS debt, but it's usually right there on your payslip. The broker or banker should have picked this up.

People forget old credit cards all the time. It's a bit rough for Genworth to call you on this, but that's why I hate it when applications are reviewed by the insurers. They turn reasonable deals into declines.


Most of the non bank lenders that I'm aware of are required to have their applications reviewed by their mortgage insurer, unless they're self insuring. There's a reason most brokers avoid non bank lenders.
 
the lender finally found out and told me - undisclosed credit cards and HECS liabilities was the reason.

Honest mistake (totally forgot about them) and wouldn't have been consequential to the deal, I'm wondering why Genworth didn't just ask me about these and I would've fully disclosed everything. INstead they just kill the deal no questions asked as soon as they find something undisclosed. Is that normal procedure?

Also would this affect future applications with other nonbank lenders that also LMI with genworth?

Normal procedure is for the assessor to question those liabilities - it shouldn't be an automatic deal killer.

If it hasn't stopped the deal from servicing then I really can't see what the issue is.

This just doesn't sound right to me.

Cheers

Jamie
 
the lender finally found out and told me - undisclosed ............


they just kill the deal no questions asked as soon as they find something undisclosed. Is that normal procedure?

Also would this affect future applications with other nonbank lenders that also LMI with genworth?

pretty much normal where more than 1 thing is left out. Many apply the attitude that if this was left off that they could find out about, what else is there that they dont know about

partly this is a lender /broker issue as well, we probe pretty hard and ask for account statements to cover off some of this stuff before submission.

Id be steering very clear of any lenders that use Genworth, even under DUA for a little while, say 6 mths

Non bank.............. after that experience .......... perhaps a focus on what the end game is will remove that idea.

ta
rolf
 
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