All Topics / Finance / Bank bungle causing a headache

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  • Profile photo of MysteryMystery
    Participant
    @mystery
    Join Date: 2006
    Post Count: 87

    Hi all,

    Just a frustrating rant from me ….. We rare in the process of purchasing two properties in the Ipswich area. Obviously we signed individual contracts for both properties and have a 45 day and 60 day settlement on them.

    I went to our lender who we have other I/P loans with and initiated the loan process. Our loans were approved, but I now find out that the branch manager put through a combined loan application for both properties.

    The problem we have now is that our settlement lawyers are due to settle the first property on the 28th May and the second property on the 18th June, but the bank is saying that they must settle on the same day as they will only forward the total loan amount (2 property purchase costs combined) and not split them. In our approval letter they state two loan account numbers, but will only release the funds in one transfer, …. crazy

    I have the lawyers panicking as she's not sure whether she can get one settlement put back or the other brought forward to the same day. I have gone back to the branch manager and told her to fix it. I have an email to say she will call me in the morning with some news.

    Anyway ….. I've always enjoyed the purchasing process of property investing, but this is leaving a sour taste in the mouth. Think I'll be using another lending institution next time.

    thanks for listening

    martin

    Profile photo of LizzyLizzy
    Member
    @lizzy
    Join Date: 2004
    Post Count: 230

    Argh – what a load of cr@p! I wish banks would stop cross collatorizing securities it causes so much trouble. Anyway it's their fault, they should know better, the first thing I look at is the contract of sale to see when settlement is. It would stand out like a sore thumb if two contracts settle on different dates.

    Tell them to bluddy fix it as STAND ALONE SECURITIES. It really shouldn't be a problem in this day and age, might require some time for new documents but this can be escalated.

    Good luck, looks like delayed settlement for thhe 28th of May for you, if you get penalised make your bank pay those costs.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Sounds like your lender didn't look at the contracts very well. You will need to get them to fix it quick. There should be no reason to cross sec the two, and they can reissue mortgage documents within a few hours if you push them.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of MysteryMystery
    Participant
    @mystery
    Join Date: 2006
    Post Count: 87

    Thanks Terry & Lizzy,

    I agree with your comments, …… The lender was very un-cooperative in regards to re-issuing the documents. As the problem wasn't discovered until very late in the settlement of the first property and even if they did re-issue the documents, my wife works in Canberra and only comes home on weekends, so by the time they got here, signed and returned it would have been past the settlement date.

    I want to buy another property …… I spoke to the lender yesterday (don't groan, … read below). When I purchase the next one can we get the loans done on separate titles …. the branch manager was going away to ask the question. Of course if they can then I expect them to cover any costs associated with fixing the problem. The reason I will use them for the next purchase is for ease at this stage. I am going to look at changing the structure and even the financial institution at the end of the 12 month fixed interest period. I figure that this gives me time to speak to accountant, mortgage broker etc regarding my best options. Plus I figure by waiting until the 12 month fixed period ends then I avoid early payout penalty's.

    I have to call my settlement lawyer this morning as she left a message for me, so I'm hoping she has some positive news about the settlement problem.

    I will post the final outcome …..

    Martin

    Profile photo of pilihppilihp
    Member
    @pilihp
    Join Date: 2006
    Post Count: 26

    Hi Martin,

    The banks get a  bashing at times because they deserve it. This is a classic case of not being able to serve two masters. If your bank lender's first priority is their job, they will try to keep the boss happy and follow bank policy to the letter.
    If you use a broker, they will try to keep the client's interest to the fore knowing that the bank will do the deal either way.

    Profile photo of MysteryMystery
    Participant
    @mystery
    Join Date: 2006
    Post Count: 87

    Good news …… we settle on both properties this Wednesday 28th, … no penalties ….. not ideal, but at least we got them.

    Phew !!

    Martin

    Profile photo of MysteryMystery
    Participant
    @mystery
    Join Date: 2006
    Post Count: 87

    Final word, …… one of the properties had to put back settlement one week, which p'd off the other one, but we actually settled last Friday 8th June 07.

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