We are holders of three RAMS investment home loans. Recently we received a letter from RAMS for each of these loans informing us that a new interest rate of 7.68% p.a. will be in effect from the 10th of August, 2007. The problem is that we were sold these loans (through a broker) on the basis that they are fixed for three years at 7.35%. Settlement was in March 2007 so the fixed term has definitely not expired.
I spoke the broker last week (when the letters arrived) and asked her to sort it out. She got back to me today and told me that I needed to contact RAMS immediately after settlement to fix the loan (this would have been nice to know back in March).
I called RAMS today only to be told "your broker should have told you". Rather insultingly, the RAMS girl then offered to fix my rate at nearly eight percent – for a fee.
Was given the fax number of the Service Solutions (complaints) department. Have sent a fax requesting that RAMS (1) reset the interest rates to 7.35% p.a. immediately, (2) adjust the repayment amount accordingly and (3) credit our account with any excess interest that may have been charged.
Will keep you posted as the issue moves along. Meanwhile, any advice would be welcome.
FIrst thing would be to review the docs RAMs sent you (contract, letters of offer, post settlement stuff or whatever). If they say variable, rather than fixed, methinks you might have a problem.
Always pays to read the gear, though many of us don't.
Otherwise I think you're in to a he-said-she-said exercise with your broker and given where RAMs are at the moment I don't think they will be keen to hand over cash or deal on rate.
If you want to go the broker, check which (if any) disupute resolution scheme they are with and prepare your complaint.
The standard proceedure is that the loan goes through as a variable loan, and once drawn down, the client then gets it locked in as a fixed loan. Standard proceedure , and it costs you nothing to do when done in the first 30 days. The loan writer MUST contact the borrower (in this case, your broker should have done this) This should have been explained to you, and Rams is not the only lender who does this. If you choose to ignore the call from your broker (or Rams Loan Manager) there is no one to 'force you' to fix your loan. If you can confirm your broker did not contact you, perhaps they may be the fee for you to fix your loans?
All the bestYossarian wrote:……given where RAMs are at the moment I don't think they will be keen to hand over cash or deal on rate.Where? The large net profit figure just announced via the asx, or the new branches opening each month and continued broker channel growth?
v8ghia,
Not a criticism of RAMs. Made lots of money but that was pre the capital markets melt down and their current funding costs have jumped and the market for their commerical paper narrowed. I was suggesting that they are likely to be a good deal more circumspect about back-dating a fixed-rate now than they might have been in the past.
Always worth remembering that today's profit is a function of yesterdays margins……..
DP
This issue has nearly been concluded – with surprisingly positive results.RAMS sent me a letter stating that it as all our fault (not RAMS or the broker) in language that must have come from the mouth of a lawyer. However, in the same letter they agreed to our demands to fix the rate at 7.35% for three years from March '07 and refund any extra interest paid so far.No signatures in place yet but, I must say, we're pretty happy RAMS customers at the moment. I think they're doing the right thing and keeping their end of the deal – but many lenders probably wouldn't!
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