Forums / Getting Technical / Finance / Construction loan delays

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  • Profile photo of m.pulleym.pulley
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    @m.pulley
    Join Date: 2006
    Post Count: 45

    Has anybody had delays with RAMS aproval?

    I have been waiting for nearly two months to get started on the constructon of PPOR. I applied for the loan about two months ago. It took 6 weeks for verbal aproval from RAMS (not the broker).Now I have been waiting for the documentation for Nearly two weeks now.

    All this is with calling the broker nearly twice a week!!

    Is this normal?

    Profile photo of HutchHutch
    Member
    @hutch
    Join Date: 2004
    Post Count: 137

    My opinion based on 6 delayed settlements in 7 years is…..Yes this is normal for most Brokers. Don't start me on them.
    I Wont mention company names or persons. But I have stopped using brokers this year and have gone back to my personal business banker. Ask any settlement clerk (or conveyancer) in the country, what the Number 1 reason for settlement delays or postponements is…..and hands down they will tell you one of the settling parties are going through a broker. I'm sure some "good" Brokers will come out and disagree but the facts will always stand one their own. If the Broker wont get into gear threaten to remove all business and contact ASIC.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Wow what a sweeping statement

     Ask any settlement clerk (or conveyancer) in the country, what the Number 1 reason for settlement delays or postponements is…..and hands down they will tell you one of the settling parties are going through a broker. 

    I have to say i totally disagree with you. In most cases it is the settlement departments of the lenders requiring a given time frame to book in settlement and most purchasers solicitors not complying with this or documents returned incorrectly or borrowers not advising their current lender they are refinancing or doing a partial discharge.

    Whilst a decent broker will follow through the whole process he / she will have little control over the settlement process.

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of MortgagemanMortgageman
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    @mortgageman
    Join Date: 2004
    Post Count: 164

    I have to concur with Richard here. Although we are both brokers so the charge of bias is obviously hard to refute,  I've got to say the sweeping generalisation Hutch has made based on his own personal experience is very unfair. Having said that, while RAMS aren't a particularly good lender for turnaround times, six weeks until verbal approval (if all of the documentation has been submitted) and two weeks for documentation is very very unusual and poor performance from your broker may be involved. It is just as likely, however,  that RAMS have dropped the ball. As a general rule we don't deal with RAMS because of their service levels as well as the lack of flexibility and high break costs involved with their loans. Also, your mention of verbal approval concerns me. Have you got anything in writing?

    Kind Regards,

    Cameron Perry
    Director
    Perry Financial Strategies
    Level 13, 30 Collins St
    Melbourne VIC 3000
    Ph (03) 9662 1999
    Fax (03) 9662 2044
    http://www.perryfinance.com

    Profile photo of v8ghiav8ghia
    Member
    @v8ghia
    Join Date: 2005
    Post Count: 871

    I think there is a side to Hutch's comments that ring all to true sadly – I have seen people who could have walked in and out of a bank with a 'yes' have a brokered loan take a week or more to get the same result. While there are always excpetions and anumber of varying factors, many lenders do tend to treat the brokered loans with a bit of slack attitude – I can't explain why for sure – I have the feeling this is why many larger brokers tend to deal with the banks only, and with clients that have a 20% deposit mininum. I have 'brokered' some loans as a broker, and as using a 'lending panel' when there have been special needs, and myself, felt uncomfortable with the poor service and time frames provided by the particular lenders 'Mortgage Origination team'. ….and you can't do much about it either, and as Richard mentions, as far as settlement goes you have little if any control over it al all. That raises another point, most lenders have a totally different channel or department for their broker originated loans as opposed to their direct clients.  And yes, some brokers are indeed pretty poor too, there are some real cowboys, who recommend lenders based on commissions (that they still fail to disclose) and have staff who have little real life experience or skills, and no tertiary qualifications whatesover…)  I am not sure why a broker would recommend a rams construction loan over any other lenders construction loan without more detail,  but the real test of the whole situation would be to find out how long it was from when the broker supplied every document the lender required of them on your behalf, to when you got your written approval – you will likely find there has been some buck passing and toing and froing, as I don't know about the 'verbal' approval bit – 1st for me.
    A good broker will really come into there own for balance sheet type borrowers, time poor people without 'deadlines', large investors, major  projects and constructions, or helping with loan structuring for maximum borrowing power……..but for the average person who is looking for a PPOR loan, and or buying a few investment properties, I would suggest go th your lender directly and save adding an 'extra link into the chain' – because that really is what you are doing.    That's what I have found to be the case over the last couple of years anyway…….. 

    Profile photo of HutchHutch
    Member
    @hutch
    Join Date: 2004
    Post Count: 137

    Surprise!
    I expected as much from Richard & Cameron. Fair enough protecting their industry. I'm sure you are the "good" ones.
    Anyway as I said it is only my opinion for my vast experience. Fair or not, I don't apologise for that. Sweeping statements or not. Using your slanted rationale not many people on this forum would be able to post their honest opinions/experiences to other fellow property investors. It would be a very empty forum indeed.

    Cheers
    Hutch

    Profile photo of Jon ChownJon Chown
    Member
    @jon-chown
    Join Date: 2007
    Post Count: 254

    As an agent, I am so much happier when the Buyers are working with a Broker and include us in the communication because at leat we are kept in the loop unlike most Banks and Solicitors who seem intent on treating us a mushrooms.

    Westpac have just completly stuffed up a deal with one of their clients and are now into penalty rates due to not being able to spell their clients name on the documents.   While I suspect that they are quite happy to have Brokers do all of the dirty work and save on wages/saleries, I think that they want their cake and eat it too.

    Jon

    Profile photo of m.pulleym.pulley
    Member
    @m.pulley
    Join Date: 2006
    Post Count: 45

    Thankyou all for your comments,

    I am still waiting and have been requested to now provide further financial details.

    This is very frustrating as the approval previously given was not that much less than what we are asking for now and well within what we were told we could borrow.

    The verbal approval I spoke of previously was the broker telling me that RAMS had approved the loan and were drawing up the paperwork. When advised of the increase in costs of the earthworks he said no worries, just need to put the new amount into the docs. Now he says the mortgage insurer wants new financial details.

    oh and by the way the broker is a RAMS franchisee

    aaarrrrrg

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    I have a few loans going thru RAMS at the moment, and they are running a bit slow.

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of v8ghiav8ghia
    Member
    @v8ghia
    Join Date: 2005
    Post Count: 871

    While the time frame does not sound good, a combination of contruction loan and a revised borrowing figure would hold things up a bit, and it is the mortgage insurer usually. I had a deal with ING where the borrower, after conditional approval, negotiated a further discount of $3000, solicitior was not privy to this (theirs) and to cut a long story short, when both solicitors got their respective acts together, the whole process had to be virtually gone through again, as the mortgage insurer viewed it as a 'new deal'. believe it or not. So an extra four weeks went onto the setllement date almost, and the client was rewareded with a $300 extra fee for redrawing up the loan documents by the lender….worth it to get the 3k off of course, but this type of thing will cause details unfortunatley when loan amounts change prior to settlement/unconditional approval.  Hopefully by now your lender has got on top of this for you, and you can start building! All the best.  

    Profile photo of m.pulleym.pulley
    Member
    @m.pulley
    Join Date: 2006
    Post Count: 45

    Thanks all,

    I have now had approval and am waiting for the mortgage broker to send the docs to my builder.

    Hopefully the house will be finished by Easter.

    Thanks again,

    Mark

    Profile photo of blueheelerblueheeler
    Participant
    @blueheeler
    Join Date: 2007
    Post Count: 45

    My understanding of the process works like this,

    1. Interview-Selecting appropriate product and availability with lender/s too your suitability. Once this occurs then the loan process starts.
    2. Loan Application Process- Application is lodged with the lender within 24hours of receipt of all required supporting documents.
    3.Conditional Approval which takes about 2-3days.
    4. Valuation Reports-Valuation reports will be received by the lender within 3days of request (subject to property access)
    5.Unconditional (full) Approval takes about 2days-Will receive unconditional (full) approval from the lender within 2days from receipt of their satisfactory valuation/s. Broker contact buyer to confirm a written unconditional (full) approval has been received from lender.
    6.Morgage Documents takes about 5-10days-Under normal circumstances, the lender will send a copy of the mortgage documents and return them to the lender within 5days. On receipt of the mortgage documents, you are required to phone to confirm the receipt and ensure all is in order to be signed.
    7.Loan Settlement takes about 2-10days-Between 2-3days after returning the mortgage documents the solicitor/conveyancer will contact the lender to book settlement. Solicitors/Conveyancers require 2-5 working days prior to settlement to arrange the necessary paperwork.
    8.Settlement has been effected and the loan is in place.

    Profile photo of blueheelerblueheeler
    Participant
    @blueheeler
    Join Date: 2007
    Post Count: 45

    The process does take time depending on how motivated your morgage broker is. I have had great dealings with morgage brokers and, the process was 2weeks from interview-settlement which was great.

    If you have had bad dealings with a morgage broker do not reflect this on the other morgage brokers. It only takes one to split the good and the bad.

    Profile photo of brookeleabrookelea
    Participant
    @brookelea
    Join Date: 2007
    Post Count: 52

    From any experience I have had with brokers, I have found them to be frustrating and condescending.
    Buyers frustrations are valid and real and brokers really need to be more in tune with these frustrations and fears.
    I really wish more brokers took into account the buyers fears and frustrations, instead of procrastinating.

    Profile photo of okkamooieokkamooie
    Member
    @okkamooie
    Join Date: 2007
    Post Count: 39

    I have in the past had a long term relationship with one of the big 4 banks.  It was only when I hit the lending limit as they advised that I turned to a broker for solutions.

    Fortunatley I got a really good one.  By taking the time to understand my income from all sources and after cashflow he was able to negotiate a net increase in borrowings of 140k.  The irony of this is it was with the same bank. 

    Yes that's right the mortgage broker could get me a loan signifiantly higher then their own staff could do.  I use the mortgage broker for all borrowing now and use a number of banks based on his advise.

    Profile photo of m.pulleym.pulley
    Member
    @m.pulley
    Join Date: 2006
    Post Count: 45

    Since my last post on this thread, Progress has come crashing down.

    Earthworks has started but docs for release of funds have not come from RAMS. I called RAMS to find out what was holding things up as my builder ws getting a bit anxious. They informed me no loan increase had been applied for. Called broker to find out what ws going on. He said he didn't know what they were talking about as he had all the correspondence for loan approval and the builders insurance certificate etc. had all been sent to RAMS. Meanwhile the builder has stopped work and I am left in limbo not knowing for certain wether my constuction is financed or not.

    Does anyone know a good mortgage broker in WA so this doesn't happen again??

    Thanks.

    Profile photo of v8ghiav8ghia
    Member
    @v8ghia
    Join Date: 2005
    Post Count: 871

    Hi. Wow, what a mix up. I assume this is the same scanario as your other post, although they are explained differently.
    First things first, with this lender in particular, the proceedure is that construction commences AFTER an 'Autority to Commence' notice has been issued to you. At that point, construction is to be completed within 12 months from this date. The loan could not have been formally approved until working plans and construction documents have been recieved by Rams, with the fixed price building contract. A panel valuer then reviews this, makes sure it is correct between both builder and customer (ie you) and that it meets building codes etc. THEN formal approval is issued, followed by the Authority to commence.
    Now…….you need to clarify are you using a broker or a Rams Home Loan Centre? ie Does th building have Rams written all over the outside of it, or is it 'Joe Blow FInancial Services' or 'Mortgage' Broking'. ?The action you would take next will depend on that, although I am concerned you say that the lender has no knowledge of the deak, but you hav an 'approval letter?' What is on the letterhead?
    Once the first valuation has been done, progress inspections are not required with one of these loans, which is builders love 'em – they get paid quicker. If you give us some more specifics I may be able to point you in the right direction.

    Profile photo of m.pulleym.pulley
    Member
    @m.pulley
    Join Date: 2006
    Post Count: 45

    V8Ghia,

    It is a RAMS francise. The person I am dealing with is the owner of the franchised store. I have no intention of tryind to run the guy down as he may be telling me the truth but the longer it goes on the harder this is to believe, even though I like to give everybody the benefit of the doubt.

    I have since been in contact again with RAMS head office, and with the franchisors office manager. Whilst no body is yet willing to say he is lying about what has been said they are looking into it. The office manager who is employed by the guy handling my loan has offered to take over the handling of the application from him.

    So I am still no closer to a resolution yet.

    arghhh.

    and yes this is the same subject as the other thread.

    Profile photo of Jenny1Jenny1
    Member
    @jenny1
    Join Date: 2004
    Post Count: 269

    I think everyone has a horror story a to tell about either a bank or broker, but I can tell you without hesitation that I have had a lot of deals put through by Cameron Perry and he is the best broker that I have dealt with.

    He is thorough, courteous and clever with the way that he structures deals and always has had solutions to my tricky situations and never drops his bundle where I have others that have.
    For those that don't know him he is based in Melbourne and myself in Canberra and the distance has not been a problem with either email or phone calls to keep in contact.

    RAMS are totally inflexable, high exit fees and so SLOW I am counting down the days until we part company.

    Never too late to look elsewhere flick RAMS they will do you no favours..

    Give either Cameron or one of the other brokers on this forum a try you have nothing to lose and you might be surprised to find that they would get back to with a solution in a fraction of the time it has taken you with RAMS.

    Good luck

    Profile photo of BonbeachBonbeach
    Participant
    @bonbeach
    Join Date: 2004
    Post Count: 214

    I hate RAMS.

    Enough said :)

    Have a nice day.

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