Finance & Wraps

I agree with Richard. You are supposed to tell them, but if you do they won’t lend you the money!

Terryw
Discover Home Loans
North Sydney
[email protected]

No matter what tall story a broker may tell you, he cannot, repeat CANNOT, push such a loan through if it isn’t the bank’s policy to lend under such circumstances.

The loan will be assessed based on the facts as disclosed in the loan application, not on the broker either squeezing the lender’s balls or buying the lender lunch.

The bank has certain guidelines and that is it.

However, having said that, as Richard said, there are indeed lenders who will lend in a wrapping situation.

I am even aware for example of one particular wrapper who has done a few hundred such wraps and deals with one of the big 4.

However I am also aware that the same bank refused to lend to another wrapper even though, to start off with, the particular morgage manager set out in the first place to court this proposed borrower (only to come back with the bad news ‘Cannot do it’).

Some people, naughty, naughty, do not disclose their intent in their loan application.

And, of course, how would the bank find out unless you were to default.

Technically you have omitted information unless
it wasn’t until afterwards that you decided
to make the property a wrap.

Even then, the loan agreement may well state that you may need to get the consent of the lender (to enter into a wrap) (in essence it will be worded in a different manner. For example, it may say that the owner cannot pass on an interest in the property without the bank’s consent.

This would of course also technically net a situation where one leases the property to a normal tenant. However I doubt the bank would want to be burdened with letters asking for consent to rent everytime one changes a tenant.

I would say that the main reason for many lender shying away from wraps is because, in the event there is a default, they wouldn’t particularly like to be involved in the situation where they need to take possession of the house with all the inevitable bad press about the poor wrappee losing ‘their’ house.

Pisces

Rob

I am not sure after reading your post 3 separate times whether i really understand it or whether it was just another attack at Pisces.

If you mean that one of the Big 4 will not lend on properties which are subsequently sold under an Installment Contract I totally disagree with you. We as a company have acquired over 148 wrapped properties and all bar a dozen or so have been funded by our Bankers with their full knowledge.

Certainly we might be slightly different to the average Joe starting out in the wrapping field but I assure when we started in 1996 offering Vendor Finance to clients we still had a bar to jump over. The Bank held all Directors properties as security as well as significant cash deposit.

After dealing with the Qld State Office for 6 years we have had the last few deals done directly by the HQ credit department of this Bank in Melbourne.

I think what all potential wrappees want is a standard lender who will accept their deal without having to hide behind the guise of a Broker who will not disclose the facts anyway.

If you read what Terry and Pisces write I concur with their comments.

Cheers Richard
richard at fhog.com.au
http://www.fhog.com.au

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