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 advancebrooke!
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
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?
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 MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry is right notorious is the word.
Comes of having ex bank managers non qualified valuer do the valuations.
Richard Taylor | Australia's leading private lender
this is terrible!
what does that mean for her??
does she lose the house and her deposit?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 | Australia's leading private lender
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.
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?
Success regardless
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