Forums / Property Investing / Help Needed! / Sheer frustration with house sale and with CBA

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  • Profile photo of navyboynavyboy
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    @navyboy
    Join Date: 2006
    Post Count: 22

    Just to start of SORRY if i start going off on a tangent but this has gone on for too long now.

    I listed my IP for sale around christmas and before the home open the agent was given a contract for 200k which was in the middle of the asking price of 190-210k from an investment group who will offer it to their members. It had the condition that we do not conduct the home open that weekend and because it was what i was wanting i accepted. I remember thinking "this isn't so hard, what is everyone on about". believe me, i now understand.

    I accepted the offer and we had the contracts drawn up. after a couple of weeks of the purchaser sitting on his hands we found out (we i mean agent and I) that the original purchaser had pulled out and now a new purchaser is now buying it.
    By this stage its the start of march and in all the contracts being exchanged the contract price had changed to 197k. After a lot of calls with the agent and frustration i accepted again ( i know im being a pushover) and the settlement date was set for the 14th of April.
     
    all was going well and the signing of all paperwork seemed to go ok.

    Along comes 14th and i dont have a nice sum of money sitting in my bank. i called the conveyancer to find out that the purchasers bank was not ready and they havent gone unconditional yet. I was then told that settlement would then be 2 weeks later only to find out that their bank is still not ready. Meanwhile, i spoke to the conveyancer to see about claiming interest and fees for the delay, only to find out that CBA were not ready in any respect to settle. Due to this it is not likely that i can claim from the purchaser.

    Settlement was then set back to the 6th of may to yet again find out that neither banks are ready. settlement is now 'predicted' for the 29th of may. Yeah we'll see about that one.

    a few other bits of info- i sold the house( trying to) to fund the building of a new IP which i have already settled on the land and have the building company waiting for the funds to be available so they can issue a start date. Which is now 2 months behind). so I'm paying interest on the land and effectively losing rent from when it would be completed.
    The reason CBA 'isn't ready' is because they want all the money to go back into paying out the loans i have with them (700k) but i have had the mortgage broker constantly tell them that the money is to be available for the construction loan. Which for some reason they can't get their head around. I am doing it this way to save on paying out the loan and then paying LMI again.

    i know this is long winded but is their anyway i can get the bank to revoke their interest from april 14th due to them being more interested in new business than business they already have. Maybe an ombudsman or a fair trading consultant could help?

    any ideas, questions and comments welcome

    cheers
    dave

    Profile photo of god_of_moneygod_of_money
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    @god_of_money
    Join Date: 2008
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    Did you X-collateralised your loans?

    Profile photo of navyboynavyboy
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    @navyboy
    Join Date: 2006
    Post Count: 22

    unfortunately yes they are. i know its a big no no but at the time i was paying a stupid interest rate with a non-bank lender and had the whole lot covered by CBA although each property has its own loan and security.

    Profile photo of TerrywTerryw
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    @terryw
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    The CBA has you over a barrell!

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of god_of_moneygod_of_money
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    Terry,
    Any solution in this case… I know it is 'easy' to look back in retrospective

    Profile photo of navyboynavyboy
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    @navyboy
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    I am still not comprehending the fact that they can keep charging me interest on a loan which they are dragging their heals to settle and pay back, meanwhile I'm also paying interest on the land which i have already settled on and effectively losing potential rent money due to the delay in building of the house.

    Is there anyway i can get the bank to not charge me interest or even 'threaten' them (in a very polite way because i will want more money out of them soon)just to get them to hurry up?

    oh and to make things a little more exciting the construction company is sending me letters stating that if they dont start soon they will have to reassess the contract price because materials may have gone up in price.

    what fun it is trying to secure my future.

    dave

    Profile photo of TerrywTerryw
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    Without all the  facts it is hard to say. but it looks like you have given two or more properties for security for 1 loan. You are now trying to release one of the securities. The bank doesn't have to release the security unless you meet their criteria such as LVR. So what is probably happening is your LVR on the remaining property is too high and you will need to pay down the loan – or they won't release the security.

    If LVR is too low, the only way out is to pay down the loan with cash, or part of the proceeds from the sale.  otherwise i think your security won't be released.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of navyboynavyboy
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    @navyboy
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    for info the current LVR is around 86%.

    so i understand that they want to have all the funds available to ensure that the lvr doesnt rise but at the same time i want to ensure that the lvr doesnt drop because then they will want to charge me to LMI when i borrow money to build the new IP.

    it seems like a very round about way but i want to sell this IP to fund building the new IP.

    Profile photo of lifeXlifeX
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    @lifex
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    I'd be taking your problem up with the purchaser. Your losses now are due to them not fulfilling their original obligation in a signed contract of sale.
     
    If they had originally signed a contract for settlement in early April, and you are now incurring a loss because they have been jerking you around, they could be liable.
     
    Even if you re-signed with a different purchaser, I'd say you still have a case to sue the original purchaser for any loss you are suffering now.

       Just send them a bill for "17.5% Penalty Interest compounding daily", to recoup your losses. It is THEIR responsibility to ensure they pay on the day of settlement.
    .
      You would be surprised what a kick in the bum like this will do, which is to get your purchaser to actually chase up this loan through their bank to get you money. 

      In the past when I have purchased and my lender stuffs up and I can't give the vendor payment on time, I have been slugged with penalty interest until I sort it out. And rightly so.

        In my experience the banks don't particularly care if things are done on time or not. Not their problem. I will bet the paperwork for your purchasers loan is sitting in an "INBOX" doing nothing because no-one is chasing it up – and you are paying the penalty. 

    GET ANGRY.

      Stand up for yourself, and read everything you sign into carefully.  Very good experience to learn from. 

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
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    Hi Navy boy,

    No fun thats for sure. As Terry mentione, it is a bit hard to give you to many specifics without more details – which you may not wnat to air here. However, I think the foremost thing to do is communicate via your local cba branch – and dont go in angry/obnoxious, as it does not achieve anything. The upset/dissapointed bit works heaps better.
    Am I to understand you have two properties, crossed, two loans, and 86%lvr, and you are selling one? If so, the bank will likely want to revalue the remaining property, and then will require either one of the following…
    1) Enough funds from the sale to keep your remaining loan @86%lbr OR
    2) As above, but make it 80% lvr.

    EITHER way, this will not hold you deal up – they will simply say , 'yep, give us this amount of $ and we are good to go. Is there anything we are missing?

    Cheers.

    Profile photo of navyboynavyboy
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    @navyboy
    Join Date: 2006
    Post Count: 22

    ok if you think you need more information to help please feel free to ask.

    i have 3 houses and a block of land.
    i am trying to sell the first house i bought about 3 years ago.

    property 1 (trying to sell)
    owe 143k
    value 200k
    rent 190pw (not rented now)

    property 2
    unit. normal size house but in strata
    owe 165k
    vale 215k
    rent 200pw (market rent approx. 250pw but step sister and her daughter live there)

    property 3 (PURCHASED NOV 09)
    owe 244k
    value 250k
    rent 280pw

    property 4
    land 350sqm
    value 115k
    owe 121k
    potential rent 280-290pw

    progress was made today. i called the CBA customer relations who led me from one section to the next then got told to get a new broker. very very frustrating. kept my cool and rang back and got a different person. found her to be more helpful although most of the info was like common info. i did manage to find out that the reason (according to them) they are waiting is they are missing a MISCELLANEOUS APPLICATION. due to the reshuffle of the security to loans, CBA reckon they require this document. i called the mortgage broker and asked him about it and he was informed by CBA that we did not need it ( he is looking through past emails to see if he still has the one where it mentioned that). i have every confidence that he is pulling his weight and he would have done what CBA told him to do.

    as for the compension of all the interest i have paid since APRIL 14th, i called the financial ombudsman and explained the situation to them and asked a few questionsin regards to getting something back from CBA. she said i have a claim and fill in a dispute on their website. she also mentioned that it may be worthwhile calling the customer relations section and see if they can resolve the matter due to the financial ombudsman doing a lengthy, in detail inquiry.

    i havent called the customer relations section yet. i need something to post tomorrow : )

    oh and i havent got angry yet because i know that i wont get anywhere and then ill get more frustrated.

    cheers
    dave

    Profile photo of TerrywTerryw
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    I think if your new lvr will be 86%, then you will need to get the approval of the mortgage insurer, so you would probably need some sort of application with updated proof of income etc.

    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 newbi2newbi2
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    @newbi2
    Join Date: 2008
    Post Count: 227

    There seems to be 2 issues. Here is my suggestions based on what I have done recently.

    1. Inform the purchaser that there will be no further extensions and that settlent is to proceed with due haste or the penalty interest will be charged as per the contract they have signed. (I have seen "nice" vendors delay settlement, purchasers fall over, property values change and it then being to costly to sue for the difference and having to wear the decrease in value – too much heartache)

    2. Bank – Write 1 (and only 1) letter to the customer relations officer (cc in your loans officer, MB and the branch manager), clearly outline (without laying blame) where you are up to and the uneccasary and avoidable costs incurred to this point. Point out your degree of custom to the bank and that up until now you have been more than happy with their service. Clearly itemise the dollar value of the delays (show an estimate of how the holdups have prevented you reducing interest on other loans etc). Address clearly the plan from here (ie the FIRM) settlement date that they are to be ready by (dont worry if the other side delays – that is the purchasers concern, not the banks).  Finish the letter by indicating that based on past dealings you would trust them to resolve this issue swiftly, however you give them until (x…date) to resolve the problem or you will refer it onto the banking ombudsman. Follow this up with a verbal call to make sure all parties have recieved the letter and get confirmation that it is being addressed and will be delt with before the timelimit you impossed and if not, follow through with the report to the ombudsman.

    I was sucessful in doing exactly this with the NAB last year when they "lost" documents and the settlement was delayed. I was reimburssed the interest charged on the sale amount (not just loan but the whole sale amount – as it would have been used to pay down another loan), and the discharge fees as well as a default fee on a credit card which was to be paid out with the loan.

    Stay calm, avoid blaming a specific individual, point out suitable resolutions and you will have a better outcome. If you back someone into a corner they tend to get deffensive so be firm but considerate but stick to your guns with the ombudsman.

    Let us know how it goes.

    Profile photo of navyboynavyboy
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    @navyboy
    Join Date: 2006
    Post Count: 22

    hello all.

    firstly thanks mick. Its unfortunate that im not the only one this has happened to but fingers crossed i get the same outcomeas you from CBA.

    I have spoken to CBA customer relations and explained that due to their delays it has cost me in lost rent, interest and building delays. The lady i spoke to said that until we have settled there is no figure on the losses so we cannot proceed. I am unsure if this is just a 'call back later' solution.

    As for settlement, the conveyancer called me friday and confirmed that the purchaser has signed their documents and allowing a couple of days for bank processing and a couple  of days for other work SETTLEMENT SHOULD BE THIS FRIDAY. Then i can pursue the bank for losses.

    just did some quick figures on the losses, including rent and interest ( cheers mick on the idea of interest on proceeds) which came in at a rough figure of around $3500. seems worth pursuing a bit more now that there is a figure on it.

    cheers
    dave

    Profile photo of navyboynavyboy
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    @navyboy
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    i had a little bit of excitement for the start of the week, as far as i am aware we are still good for friday but i received a call yesterday from the construction company informing me that because the contract was signed over 5 months ago (even though i had the house modified and it took nearly 4 months to get to the footings cost stage) i am now liable for the increase in the cost of building the house.

    total out of pocket has just hit around $5000

    fingers and toes crossed to get this all back

    cheers
    dave

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    Pardon the dumb quezzie, but why if it took the builder 4 months to get you a quote for mods to a house are you liable for their delay & subsequent price increases? I'd be talking to a quantity surveyor or a contract administator before I 'd agree to paying for increased costs in an flailing economy.

    Profile photo of navyboynavyboy
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    @navyboy
    Join Date: 2006
    Post Count: 22

    SURPRISE SURPRISE

    the bank haas delayed settlement to monday at the earliest. it seems that everytime the broker or the conveyancer speaks to someone there they get a different answer to what is going on.

    the latest is that we do require the miscellaneous application, but in the mean time they have told the broker that they are ready to book the final settlement in. this caused the conveyancer to try get settlement booked for friday along with the vendors conveyancer then having to get the vendors conveyancer to delay til monday (?) because the bank would book it in. i have been told that the file has moved further up the chain but i feel that the miscommunication has stretched to an extra pair of hands.

    looking forward to seeing their excuse come monday.

    also now have to wait 2 more weeks to get my "ok to start"date due to the construction company only issuing them on certain days.

    all i can do atm is dream of my happy place : )

    cheers
    dave

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