All Topics / Finance / revoking finance?

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

    my sister-in-law has bought her second property using the NAB.  she is planning to use her new property as her residence and her current home as an investment property.  her husband income is $70,000 and she works part time $18,000 and has 2 children.  she bought her current property over 5 years ago.  she is planning on renting her house out for $190 per week.

    the NAB approved the loan for the second property and settlement is to happen sometime in early september.
    the NAB however are now revoking their finance due to one of the houses falling in value.

    can they do that even though she has equity?
    thanks in advance

    brooke!

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

    Brook

    As far as I know they can do this if no offer doccuiments had been signed (no contract with them until the offer doccuiments are signed).  Out of curiosity had they signed any offer doccuiments yet.  

    If doccuiments had been signed you could approach the banking ombudsman to confirm if they have acted appropriatley.

    Don

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

    thanks don.. i spoke with her and all the documentation was completed.. they are on an 90 day settlement and have found out less than 2 weeks before actual settlement date..

    what does this all mean for her?  does she lose the house?

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

    NAB are notorious for doing this sort of thing. Bastards!

    If you have a look at the loan documents there will be clauses in there that probably give them an out if any conditions change – such as the security value falling in value.

    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 Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Terry is right notorious is the word.

    Comes of having ex bank managers non qualified valuer do the valuations.

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

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

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

    this is terrible!
    what does that mean for her??
    does she lose the house and her deposit?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Potentially YES. Especially if they invoke the old AMMC (All Moneys Mortgage Clause).

    Suggest she start again with a new lender on the quick.

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

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

    Profile photo of YossarianYossarian
    Member
    @yossarian
    Join Date: 2006
    Post Count: 136

    Here's a scenario,

    Bank discovers (however it happens) after they've approved a loan but before they hand over the cash, that the property or properties is now worth less then they thought…perhaps even less than the loan amount.

    They proceed with the loan.

    Borrower falls over, now owing more than the property is worth and the bank takes them to the cleaners.

    Of course, No-One In This Forum would run to their laywers or A Current Affair screaming about banks lending inappropriately, would they? Perhaps the NAB (and I can't believe I'm defending that particular group of cardigan-wearers) felt it was a prudent decision.

    brookelea…the key question for your sister in law is, "if the properties are worth what the bank thinks they are worth, is this still a deal I am comfortable with". If not, they did her a favour. If yes, another lender will grab it with both hands.

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

    update on the situation.

    when they revoked the finance, they did it because of where both houses are positioned, outer northern suburbs of melbourne.
    what they forgot is that she actually works at the bank part time as a clerk.
    when they were reminded, they relented!

    define ethics?

    Profile photo of Kipper57Kipper57
    Member
    @kipper57
    Join Date: 2006
    Post Count: 252

    Success regardless

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