Hi, I know that there are people on here that are in the finance business and I am in desperate need for advice and inside info.
Basically I am in a real fix with the bank at the moment as they are trying to screw me over. The case is in the Ombitsmans hands at the moment but no one is telling us exactly where we stand.
I was just hoping that someone in the know might be able to confirm our accusations that the bank is in the wrong. We are having to find and extra $33,000 at the moment and there seems no way out of paying this and then hoping to be able to obtain it back…..
If anyone can help who knows the banking system and legalities then it would be much appreciated.
You need to provide more information if you want some constructive advice.
Are you settling on your home or an investment property?
Is it an off the plan purchase?
Is the bank valuation much less than what you paid?More info and you may get more replies.
Sorry I didn’t go into too much detail as it is a bit lenghty. I will try and explain as brief as I can…..
Back in August last year we applied for a loan to build a second home that we were to build an office on the front for beneficial reasons and use our existing home as an IP as we built it a month before the big boom here and can now positively gear it.
This was with the Commonwealth Bank. We were approved and sent a contract for $498,000. Then for reasons that I can’t now remember there was a stuff up with the figures and 12 days later they sent out another contract for $478,000. We were told that we needed to pay a deposit of $23,000, which we did (they have a signed letter saying that a certain person is giving us a gift of $32,000). The house started getting built in Sep 03 and in Dec 03 we had a phone call from the bank saying that there was a short fall of $18,000 and did we have the money to cover it.
We told them no and asked where this money had come from and they told us that they would look into it. During the next few months we followed up with phone calls and asked if this had been resolved and always got the brush off being told they would look into it and get back to us.
On each draw down that has been payed to the builder we have had to chase for his money. We have even gone to the extent that the builder would give the invoice to us and then we would go into a CBD branch and have them sent or fax the invoice through internal mail. Only to be still told “we havn’t received the invoice, can you send it again”.
About 5 weeks ago when the house was in it’s finall stages and the builder was still waiting for $62,000, I rang the bank and was told that it had been processed and that he would receive it within 5 working days. A week later, still no sign so I decided to contact the Banking Ombidsmun to express our frustration with the bank and the $18,000.
A couple of days later I rang the bank to chase the builders and when hearing my name the lady on the phone started to hum and har and then passed me onto the Regional Manager who told me that he had sent a letter out to me the previous day asking for a meeting to resolve this matter as he had received the letter off the Ombidsmun.
So the following day I drove to Melbourne to have this meeting. (Still havn’t received his letter though) When I walked into the meeting he had all these different figures concerning our loan plastered up on a white board which he asked me to look over for a few minutes and see if I could find any descrepancies.
On the board it said that my deposit was to be $38,000. He had the letter saying there was a gift of $23,000 but said the lady who we dealt with initially destinctly remembers me saying that I would find the extra towards the deposit of ‘family, friends & my previous employer'(all untrue). There was also $9,000 on the board marked as arrears. When I asked of this he said that I hadn’t made any mortgage payments since the beggining of the loan and that they had closed the origannal account for our existing property and had been still trying to draw against that. When asked why we had never recieved a letter stating that we were in arrears he said he was unsure as to why and would look into it. I did however manage to come home with a cheque for the builder for $55,000 though it was still short by $7,000.
A few weeks into the new loan I had noticed that no money was coming out of my account so I rang the bank to be told that this was normal in the draw down stage and that the repayments for our existing home would recommence after the new one’s completion. I thought this sounded to good a deal so I again queried this on several occasions. What actually happened was that they closed the existing account and forgot to request permission to draw it out of my account. (They are now saying that they presume I closed the account).
We realise now where they $18,000 came from, the total of both houses equals $518,000 and with the loan they gave us and our deposit it is $18,000. Which means they screwed the figures up in the begining but we also screwed up by not noticing. But were they were previously asking for $18,000 they are now asking for $33,000. This includes the now $11,000 arrears and a misterious $4,000.
We have requested on numerous occasions to have a break down of the loan sent out stating where all this money is made up but as to yet we still can’t get one out of them. The rang me last week after discussions with the Ombidsmun and requested permission to deduct the mortgage from my account but as to yet have still not sent out the paperwork for it.
The house is due for completion next week and the builder is still owed $7,000 from the last draw down and his finally draw down is $25,000. They missed there date requested by the Ombudsmun to respond to our complaint, they were given until the 25th March. They have since reponded with a letter that basically trys to discredit us saying that we mislead them by saying we would find the extra deposit and that we have a letter stating a gift of $23,000 however they noticed that we had drawn a personal loan for the amount of $20,000 to buy a caravan, so once again they assume that we have mislead them. (Which we did, on their advice we got a personal loan to cover the deposit)
Basically we have no other option but to payout the $33,000 to the builder, move into the house and then somhow try and fight the bank for it back. If we don’t move in we lose the rental income of the tenent who is moving into our exsisting home and also the office rental of our new home, leaving us to pay $500 per week with no rental income.
I was just hoping that someone who new the banking system would be able to advise us as to where we stand in this situation. There is a lot more descrepancies in this but I’ve tried to keep this as short as possible. For instance…we asked for both houses to be kept seperate and to have an IO loan. They amalgimated the two and gave us an PI loan but adviced us this was only to get the loan approved and once the house was complete that we could refinance and get the loan to how we want. This isn’t the case as we have since found out that we are locked into it till Nov 04 before we can refinance. It’s really frustrating as between the two houses there is $118,000 in equity and the other house isn’t even finnished yet.
Anyway if anyone can help by enlightening us on our situation it would be much appreciated.
Thanx guys sorry to blab on……
I would start to pull together a team for this. You need to discuss this with a lawyer. In fact I would go to a lawyer ASAP to fnd out what your rights are. Also create a time line of when events that have happened (remmember names and as much detail as possible).
Also, did you use the banks on internal complaints department??? Perhaps it would be better if you go through the softly, softly way (with the black diary, as mentioned below), so perhaps give them a ring (but be nice!). Tell your lawyer to go softly initally too, if you have to use one.
I also would start to suggest you document everything in a diary, so there is a record of it (who you spoke to, what time, what did they say, etc). I would suggest you do this as you can use diaries in any cout dramas, as well as making everone know that you are holding them accountable. Also it looks like you are a professional, not someone the bank can screw over.
Lastly next time go through a mortgage broker too (it’s alot less hassel, and you don’t even have to pay for it..).
Rgds.
Lucifer_auHi, we went to see a solicitor on one of these free 15 mins advice things. He was stunned by it all and surgested we follow it through with the Ombidsmun, which we are. However, I am a bit disalutioned as to what exactly the Ombidsmun can do. You see I thought we were on a winner when the bank failed to meet their deadline to respond to this, I thought that meant that they made a desicion on what we had told them, since the bank failed to make they objection. This doesn’t seem to be the case though so I don’t know why they bother to have a dead line at all.
As for a lawyer….all we are trying to do is to get the $18,000 added onto the loan and I object to the arrears as they gave us the wrong advice and didn’t sent us any correspondence to state that wasn’t the case. We are also wanting to know where the other misterious money comes into it. Therefor, how much is a lawyer actually going to cost, and since there is no big dollars for compensation involved can we afford to do that!
We have kept a record of every single stuff up by the bank (and there are many)a 5 page letter went to the ombidsmun detailing everything and everyone involved. My impression from the Ombidsmun is they can’t make the bank do anything, we just have to pay the money and they will make suggestions to the bank in order for us to try and get it back.
We are having to pull money out of our newly established business to do this, which I’m not happy about and need to reclaim it.
We usually do go through a broker too but the bank just happened to call us regarding our 1st mortgage and if there was anything else we might need, at the right time (big mistake!)And believe me if there was anyway we could refinance at this time then that is what I would be doing.
As I suggested write it in a Diary. That can be presented as evidence; You can give a letter, but compared to a Diary it is very poor (and wil mostly likly be ignored)
You didn’t memtion their own internal complaints department. Did you use them or not? If you didn’t perhaps ring them up and tell them very nicely that you want to talk about it, when you metion the $4K tell them you haven’t had any information on what this particular charge is for. Seem like you want to help them. You need a circut breaker and this is them (at the very least they should be able to clear a few things up for you).
The last way is to use a lawyer, it will be expensive, probably around $1K or so, but if it gets you out of the mess, time wise it may be worth it, you might also get out of pay some $$$.
Rgds.
Lucifer_auHave not spoke to internal complaints but have been dealing of late with the Regional Manager who is of no help at all. He is the one who says that he will send us through a breakdown of the figures (still waiting at the moment as he has once again meant to be sending info)
But in case you guys didn’t realise, the commonwealth bank seem to have a ‘lend now pay deposit later policy’. Have you ever heard of such a thing?
Thanx for your advice.
Skye,
You can give me a call if you want on 9984-1911.
I am a mortgage broker now, however I worked for one of the ‘top 4’ for several years inclusing their legal departments so I know alot about the actual process and what you can expect.
I can probably explain a lot to you over the phone if this helps.
[ohno]
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