How to Avoid Pulling Out One's Hair !!!
A good client of ours, who is a former Australian Government Barrister, was looking to complete a refinance over her business debts and the family property portfolio in order to finalise a relationship restructure.
So we put together a comprehensive re-finance application and submitted this to a particular Bank who were advertising killer interest rates for residential borrowers, in late February.
Without naming the Bank in question we thought we might share some of our experience with trying to get this proposed re-finance completed.
After several calls back and forward with the bank's BDMs post submission, we finally got advised that under the provisions of the Bank's SLA, they had 19 working days grace to turn around all and any new re-finance proposals. That being said, the assessment of our client's application wasn't even commenced for at least 6 weeks from the day it was submitted, and thereafter it took another 4 weeks of chasing and chasing and chasing just to get some comments back from the Bank's initial Credit Assessor, who then went on to say several days later, that our application had been 'derailed' because his Head of Credit did not want to re-finance the $300K portion of loan deemed to be 'business debt' within the total $1.3M loan amount being sought.
We were then told that the only way the application could be considered was to send it out of the consumer credit area, and into the business credit area for another assessment, se we agreed this thinking this would be ok.
Even though the proposal clearly 'Serviced' based on my client's available income circumstances, the second Credit Assessor reviewing was unable to get the deal approved by the Heads of Credit in the bank's Business Credit Department because she said that the Bank applies tougher servicing criteria on business loan applications than on consumer finance deals.
SO AFTER NEARLY 90 DAYS of uncertainty, inter-departmental subversion, and a general lack of customer service the Bank finally 'Declined' our client's refinancing deal.
On the day the deal got declined we spoke to Non-Bank 'Privately Owned' Residential Mortgage Lender who advised they loved our client's deal and that all going well they could turn it around in a couple of weeks. Today we received a call from this Lender's Credit Assessor, and he only had a couple of questions, which were answered quickly meaning he was well into completing his credit assessment which is pretty amazing considering the deal was only just submitted yesterday.
Without pre-empting the outcome of this second application, this experience has been a joy when compared to dealing with the Bank in question.
So, what is the moral of this story? .... I guess from the Broker's perspective it seems that 'nothing is ever a given' when it comes to Banks and their associated mortgage and finance lending practices .... and while we are on this subject we only just heard the other day about another bank owned-lender who charged excess interest to about 3,700 of their customers for many months because of an internal software-system-glitch.
At Viking we prefer the KISS approach. Keep it Simple (or end up being) Stupid.
Lesson learned - and give Viking Capital a call if you want to be sent down the right path and well away from the mission impossible lenders with all their red tape and wasted time.