Forums / Property Investing / Help Needed! / Expired IP Loan Situation – Please help

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  • Profile photo of sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    IP Loan Situation

    1. Westpac Expired IP Loan– 5 years term and expired
    2. Bought IP in 2010 and got the IP loan from Westpac
    3. When we applied for the loan, we never requested loan term but bank issued the loan for just 5 years
    4. Loan expired in 2015
    5. We are still making IO repayments without any issue as a direct debit arrangement
    6. The bank never notified us that loan has expired
    7. Bank monthly statements do not show the expiry date of Loan
    8. I had another loan with Westpac from 2008 & 2017 and they issued the loans for 30 years without requesting any loan terms
    9. Though loan was expired, Bank automatically taking direct debits interest only payments
    10. On an expired loan, Bank automatically changing the variable rates as per market fluctuations
    11. The loan is part of Advantage package

    Questions:
    1. I want to keep this loan active for the next 20 odd years without going through current financial assessments as my family situations changed, how can we deal with the current situation?
    2. How can bank issue default 5-year loan contract, unless we specifically requested
    3. Not sure if the Westpac staff intentionally used a 5-year term for the commissions?
    4. Loan expired in 2015 but the bank has never communicated that loan has expired
    5. We wanted to fix the rates and the bank realized that the loan has expired and they can’t resolve the issue
    6. Raised issue with customer advocate and they offered around 2k as good gesture and want to close the case and suggested to go over the new credit assessment process.
    7. Westpac new loan statements have Loan expiry and loan terms but my expired loan statement does not provide this information

    Please help

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    1. Dig out your original contract. You might need to apply again
    2. They made an offer for finance which you would have accepted in writing.
    3. commisison wouldn’t be more, but after 5 years they may get another if you apply again
    4. ok
    5. ok
    6. 2k plus a 25 year extension?
    7. ok

    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 sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    Thanks Terry, will try to get the copy from the bank.

    But Bank failed to inform me as per issues 4,6 & 7.
    If Bank has communicated, issue has resolved with out any issue back in 2015
    Because of bank failure, why should i get in to this situation?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    You should get a copy of the original contract you entered. If it was 5 years then you have no one to blame other than yourself as you agreed to this. Why don’t you have a copy of this important document?

    if the loan ‘expired’ in 2015 then you would have been required to have repaid it at this point, now you would be in default.

    Can you service the loan if you would have to apply again?

    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 sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    You should get a copy of the original contract you entered.
    – Requested bank to provide this informaiton

    If it was 5 years then you have no one to blame other than yourself as you agreed to this. Why don’t you have a copy of this important document?

    if the loan ‘expired’ in 2015 then you would have been required to have repaid it at this point, now you would be in default.

    if i was in default, why bank has not contacted me?
    I have been making my monthly payments as direct debit

    Can you service the loan if you would have to apply again?
    – No, Family situation has changed and will not be able to go through the new service requirements

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Who knows why they didn’t contact you.

    You don’t have many options – you are stuck with westpac so you need to convince them that you thought it was a 30 year loan. Suggest to your contact that you will make a complain to the financial ombudsman.

    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 sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    Who knows why they didn’t contact you.
    You don’t have many options – you are stuck with westpac so you need to convince them that you thought it was a 30 year loan. Suggest to your contact that you will make a complain to the financial ombudsman.

    Thanks Terry for all the inputs. Will raise the complaint once they conclude the investigation

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Good luck at lets us know how you go.

    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 sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    Hi Terry, Westpac replied today with the following options

    The loan extension / loan variation options available to you are as follows;

    1. Letter of variation to be issued for your loan to be renewed for 22 years Principal + interest repayments

    2. Letter of variation to be issued for your loan to be renewed with an further 2 year Interest Only and then 20 years Principal + Interest repayments (This will bring the total Interest only term to 10 y ears)

    I am planning to choose option 2

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Very lucky!

    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 sydey99sydey99
    Participant
    @sydey99
    Join Date: 2008
    Post Count: 56

    I thought Westpac is Lucky :)
    Reported 1 issue and they failed to respond with proper analysis then raised 12 issues and they fixed the root cause problem

    Unfortunately instead of westpac staff explaining us the product and services, we have to explain each and every step in the workflow

    • This reply was modified 1 year, 1 month ago by Profile photo of sydey99 sydey99.
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