Westpac - not sure if I should laugh or cry

[Token Funder]

Credit scoring and credit scores in the Australian context aren't the same as the US concept and reflect far more variables than simply the CRAA report.

Essentially, they are predictive modelling tools that take all the known data of portfolios/borrowers and look for variables that, individually or in concert with others, generate odds of a loan going into default. As a consequence (a) they change over time and (b) it isn't generally possible to say "this bit or that bit" was the specific issue.

A given number of Veda entries over a short time may be a non-issue for one borrower but "appear" to be a problem with the another when, in fact, it's the Veda data in combination with a bunch of others. By way of example, I was looking at some output the other day whereby the probability of default for a given combination of borrower variables got worse when the income went above a certain number.

And I've mentioned before, these things work.

 

[craigb]

rob that manager has a manager , he/she is your next call

 

[Rolf Latham]

Hiya Craig

U can go to Gail on that one and not get anywhere I reckon.

Its just one of those little battles that arent wprth winning.........almost like bringing a knife to a gunfight.....

Credit almost always usually stays with credit unless you can call in a major favour with someone that cares, AND has some grunt.

ta
rolf

 

[Spectre]

http://www.youtube.com/watch?v=7TYAQ0JWBzE&feature=related

 

[Piston Broke]

If it was'nt true it would be amusing.
This can be a tough biz...
Please dont take it as me picking on you as there are countless more in a much worse situation. Who of course would never have the guts to post it on a forum.
The quotes should be looked at in the context of the respective threads.

My sketch would have somebody waving an API magazine yelling "I'm a goddam millionaire! Look it says it here!"
Or "Computa says I made $2 million, can your computa connect to this one?"
If craa hits were a problem, mine has more than a pub dart board.
It's gotta be more than that.
And what still has'nt hit home round here is that credit is still much easier available than it was not that many years ago.

Wanna bet?

I suggest those here who think they are millionaires go to their banks or MBs and request if they can provide them $1,000,000 in cash, bank cheque or a Letter Of Credit within 48hrs (ok even <1 week).
Now you say you have to borrow it so it's a loan and interest is payable, which is true.
But no bank would give you $1,000,000 unless they thought you were worth reasonably more. Most people can borrow way more than their net wealth, so if your net worth is $1 Mil, you should not have too many problems getting a $1Mil bank cheque or LoC or LOC.
If you cant, then you aint no millionaire. A millionaire has $1,000,000 now, not sometime in the future. That is generally a wannabe (or aspiring) millionaire. Which of course there is nothing wrong with

Many seem to think "net worth" because it's a nice fuzzy, warm & vague concept, until (and if) the time comes that you need that what you believe is your net worth in liquid currency.

The problem with the residential IP only and never sell strategy is that it's
a asset rich income poor strategy.
People can brag about making $XX fuzzy dollars of CG, but if have no income you will choke on your own assets.
Sure it don't matter much for first 2-3 IPs, but sooner or later cashflow starts
drying up and you need to find better cashflow investments (or wait 25 yrs).
And cashflow comes from equity, so persuing a 95-100% lend on a 6% gross return is going to take along time before the cashflow becomes plentiful.
And just like an abnormal instance can increase your equity above your expectation, it can also wipe you out.
An 8% return is 30% more than a 6% return, and 60% more than a 5% return btw.

 

[josko]

Hi Rob,

Sorry to hear about your bother.

I have to agree with PB on this one -for once (ha ha) Maybe TF was also alluding to this.

I think it has to be more than that. I cannot count the number of different answers I get from credit when an App was rejected or conditioned according to Credit Scoring.

It's rather "funny" when you can guess at the reasons yourself and the "experts" you ask for an answer - guess too!

Regards JO

 

[Rob Williams]

Hi Rob,

Sorry to hear about your bother.

I have to agree with PB on this one -for once (ha ha) Maybe TF was also alluding to this.

I think it has to be more than that. I cannot count the number of different answers I get from credit when an App was rejected or conditioned according to Credit Scoring.

It's rather "funny" when you can guess at the reasons yourself and the "experts" you ask for an answer - guess too!

Regards JO

Nothing has changed between the approval of one loan and the decline of the other. In fact, my cash flow position has improved. The Westpac people have confirmed that the additional CRAA entry is the only change and the only issue.
There is no dispute around that. The dispute arises with their inability to over ride the system generated decline.
If they approved this re-fi, my cash flow would improve $360 per month, giving me even better serviceability.
I can put this one through another lender, but there is an underlying, strategic reason why Westpac would work better for me on this one, leaving me free to re-fi my last fixed rate loan with the other lender.
I didn't get this far in the game by not having multiple layers of redundancy built into the plan and multiple plans to fall back on

 

[tobe]

That is exactly what a credit scoring engine is for, to stop credit/brokers etc learning how it is calculated and therefore sidestep them massaging the deal to fit the credit score box.
Im not saying this is a good idea, just it is working as its supposed to, and expecting someone who works in the industry to be up to speed on the calculations behind a credit score and share them with you is like expecting your stock broker to give you insider trading information.
We all have a good idea of the things that are assessed in a credit score, just not the specific weighting of each variable. If the banks started giving detailed decline advise on how an application missed the credit score, after a couple we could start to work it the wieghting of the variables, which is why with some banks you will just get, 'fails credit scoring', or 'has too many recent credit enquiries'.
They cant give the exact reason, it would be a tell for the next application.

 

[Rob Williams]

Im not saying this is a good idea, just it is working as its supposed to, and expecting someone who works in the industry to be up to speed on the calculations behind a credit score and share them with you is like expecting your stock broker to give you insider trading information

I actually work at Westpac, so I'm getting my info from mutliple sources.
At least this type of insider trading is still legal

 

[Piston Broke]

Make no mistake though, I've many times argued my IP values & equity position with the banks, and in your position would've probly pulled out any piece of paper that could be referred to as an "independant valuation" to make my point.

Afaik Westpac have changed their lending criteria a week or so ago.
But I have been told, a few times now, that this is only for new customers and not existing ones. Perhaps you should ask about this.

 

[quoll]

the things is that common sense can't be just thrown out the window.

At Wesuck Bank, it seems like common sense got thrown out the window.

I'll be happy once all of my banking moved away from Wesuck Bank.

The ability to play the banking system is becoming more and more important. The hard part is working out the rules of the game.

Cheers
Graeme

 

[quoll]

Hiya Craig

U can go to Gail on that one and not get anywhere I reckon.

Its just one of those little battles that arent wprth winning.........almost like bringing a knife to a gunfight.....

Credit almost always usually stays with credit unless you can call in a major favour with someone that cares, AND has some grunt.

ta
rolf

Rolf, spot on, kudos almost made it to you BUT the computer system has decided not to allow it.

Where's the human to compain too?

Cheers
Graeme

 

[steveadl]

At Wesuck Bank, it seems like common sense got thrown out the window.

I'll be happy once all of my banking moved away from Wesuck Bank.

Apparently CBA's system is the same, in which case I'll be treading carefully with my CRAA.

 

[josko]

Unfortunately, noone can control how many times your bank wants to hit your CRAA file. ESPECIALLY when you have properties X-Colled and are applying back to the same bank. Cross-Coll will bring up 3...4...5...hits on your CRAA for one application depending on how many properties you have with that one bank.

I get your point though and it's up to you to say yay or nay to try again if declined.

I met another broker yesterday who told me he submitted a loan three times to Westpac, having had the first two declined. The third one got in. Bet his client was holding his breath...

Rules of the game? There aren't any.

I've had perfectly ideal clients knocked back or conditioned on credit score and multiple answers as to why.

Glad you have Plan B or C Rob,

Regards JO

 

[Rolf Latham]

CBA does use scoring..............but doesnt "retire" the file instead referring it to a human.

That bit WBC and Homeside are doing v different. Get bounced at score, file is in Bin.

ta
rolf

 

[steveadl]

Cool, thanks for clarifying that Rolf.

 

[Spectre]

Along the belief that a quick no is a good no. Increases efficiency, streamlines productivity!

 

[Rolf Latham]

The hard part is working out the rules of the game.

Hi Graeme

That is 2/3rd of all the challenges where there isnt a defined policy thats STUCK to

Just had a frank discussion in here a couple of weeks ago with Huw Bough, and one of the issues is that u can now not submit an LMI deal to WBC with ANY confidence that it will be approved the way u want it, even though its fine and ticks all the boxes.

Its not unusual to get some faceless credit person trying to make the loan PI, reduce the LVR etc etc. I think the lack of power now that they can no longer over ride credit score has had a rubber band effect in that they now must interfere with postibe deals in a negative way because its all they can do.

PS, our loan book has .05 % arrears, so we tend to have a clue what to look for, unlike many of the credit folk that tend to have less real data to work with.

Thank heaven for Choice and vote with one's feet I say !

ta
Rolf

 

[Pablo]

Rob,

I just had an email saying that this new policy is just a trail and if there is any applications that get rejected that should have been accepted the mortgage broker is to contact their BDM at Westpac and they will be able to override the computer.

Good luck
Paul.

 

[Rob Williams]

Rob,

I just had an email saying that this new policy is just a trail and if there is any applications that get rejected that should have been accepted the mortgage broker is to contact their BDM at Westpac and they will be able to override the computer.

Good luck
Paul.

Thanks Paul. Sadly, despite escalation to BDM and above, they still can't find anyone who can do the over ride.
I'm lodging app with another lender today as a backup.
I have one more fixed loan to break before June 30, so even if Westpac get their act into gear, I can use the other app to cover the other one.
I'm convinced they try these tactics on just to wear people down. Slowly. In the hope they will just give up on the whole re-financing thing.
They underestimate my persistence and resilience.