Browse Forums Building A New House 1 Jul 01, 2014 9:55 am We are building our first home and mortgaging with CBA. We got the unconditional approval and then we signed the contracts. The loan amount for the Land was already received and the final signing for the building amount have to be done. But then my husband lost his job. Yesterday, bank has informed us that they found out about the employment change. Will they refuse to give the remaining loan? Can they do that after the unconditional approval? We have a written proof for this. If they did so, we are going to loose the advance payments we did for the builder. What are my options? Re: Can loan reject after Unconditional approval 2Jul 01, 2014 11:20 am sorry to hear about your husbands job. This is an interesting question. Im curious how the bank learned of the employement status change. This isnt generally teh type of infomration that circulates publically (unless your husband is the "star exec" that got fired on their first day on the job at Myer). Im pretty sure the unconditional approval is based on the facts known at the time of approval that lead to that approval. If those have changed then its arguable that it is teh banks responsibility to reasses the deal. The last thing that they want to do is lend money to somone who cant show their ability to pay for it (ie by having a job, or capacity being compromised due to loss of job). Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Can loan reject after Unconditional approval 3Jul 01, 2014 11:47 am Read all the fine print of the product disclosure and terms of the loan. That's where you'll find details of whether they can terminate the loan and under what conditions. It's certainly an interesting question and would have to be dependent on the stage of the loan. Can't say I've ever heard of anyone losing their job and then the bank ringing them and telling them their mortgage has been cancelled, please pay back all money lent immediately... Losing an income would be a risk calculated in any lending offer and only becomes an issue when you default on repayments. Completed a knock down and rebuild in northern Melbourne. Handover completed 27/09/2013 and now moved in. Re: Can loan reject after Unconditional approval 4Jul 01, 2014 1:06 pm Bluesuede Read all the fine print of the product disclosure and terms of the loan. That's where you'll find details of whether they can terminate the loan and under what conditions. It's certainly an interesting question and would have to be dependent on the stage of the loan. Can't say I've ever heard of anyone losing their job and then the bank ringing them and telling them their mortgage has been cancelled, please pay back all money lent immediately... Losing an income would be a risk calculated in any lending offer and only becomes an issue when you default on repayments. asside from the T&C's theres a little thing called responsible lending and the NCCP act. If there is no capacity as a result of the change of circumstances it would be unconcionable to lend the money. The deal could not only be seen as predatory, but if it was, the bank could have no recourse to recover the debt. The land is paid - thats out of their hands, but they dont have to lend (unconditional or not) if the custome rcant afford it. I agree, read your contract and fine print, but dont expect the bank to continue with the remainder of the loan if you cant show capacity or demonstrate that your husband losing their job wont affect you capacity (eg your husband is a chef and will have a job by the end of the week). the key is capacity. you may end in a situation where you will have to reapply for the build cost aftter you husband has passed probation at a new job. Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Can loan reject after Unconditional approval 5Jul 01, 2014 1:08 pm also id be mor einterested in learning how teh bank learned of you husbands job loss. Somewhere, somone appears to have breached his privacy, whioch you could have recourse for if a financial loss can be calculated as a result of any changes to teh deal. Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Can loan reject after Unconditional approval 6Jul 01, 2014 1:50 pm Interesting as my employment check was completed after I had contracts from the bank. Probably same thing happened here. As ponzu says, bank has an obligation to reassess and if you no longer can service the debt might have done you a favour until your partner gets a new job (otherwise you may of defaulted?) Re: Can loan reject after Unconditional approval 7Jul 01, 2014 2:31 pm There are a number of variables here... Honestly, I think the only way is to talk with the bank. They already know about the employment change (which I too am interested in how they discovered that), so faced with that the best way to get your answers is to chat with your lender and ask the question. Thread: viewtopic.php?f=31&t=66299 Slab: 16/6/14 Frame: 4/7/14 Roof: 22/7/14 Lock Up: 20/8/14 Fixing: 26/8/14 PCI: 9/10/14 Handover: 20/10/14 Re: Can loan reject after Unconditional approval 8Jul 01, 2014 3:30 pm Unconditional approval would relate to conditions and circumstances present and detailed in the loan application. Banks look to protect their assets and need to assess recoverability if their loan book. Part if the recoverability hinges on servicing capacity as stated above. A major part of banking is know your customer. To that end you may have inadvertently signed something that provides the bank to be notified of employment changes. I have not seen such requirements but they could exist. As a priority I would speak to the bank and discuss how the situation can be resolved. While it would be interesting to know how the canker came to know about the change in employment status I would not spend too much time on it. Pursuing it would take lots if time and money I think. My 0.02 Re: Can loan reject after Unconditional approval 9Jul 08, 2014 12:44 am We were got unconditional approval under the conditions that we have the capacity to pay meaning the bank needed to see 3months of income going into our account and then when it came for the time to apply for conditional they seriously wanted hubbies payslip each week for 3weeks and they were really sussing him out. But of course we had nothing to worrie about cos we have worked at our jobs for nearly 10years now. Re: Can loan reject after Unconditional approval 10Jul 08, 2014 12:48 am And I remember signing a document giving them permission to give out info about your credit checks but they did our employment checks after I had contracts from back aswell. Re: Can loan reject after Unconditional approval 11Jul 08, 2014 8:09 am You're not understanding what is being said. The bank has an obligation under law to take information it learns about its customers and reasses if contacts entered into are not unsuitable. In this case they learned that a husband now no longer has job. If they have not disbursed then they need to reasses. They need to reasses if the contract is still not unsuitable. Also you have it the wrong way around - you dont get unconditional b3fore conditional. The term is usless anyway as there are always conditions and considerations. Ev when the contract is no longer suitable. If a bank gives money out to somone who can show they could not pay it, its called predatory lending. Predatory debts usually ebd up being wiped as the bank can be found to be at fault. Banks do not want to be in this position. Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Can loan reject after Unconditional approval 12Jul 08, 2014 9:57 am Ponzu is spot on. Banks have many requirements and regulations that MUST be followed otherwise they run the risk of extremely large fines. While the regulators may not levy a large fine for one off instances Banks are also very weary of doing things that impact reputational risk such as predatory lending. Predatory lending aside, at the end of the day it is about credit risk management and unfortunately when someone loses their job the credit risk of that person goes up. There may well be mitigating factors but first and foremost the Bank will look to safegaurd its assets. I would not read unconditional as having zero attaching conditions...... Re: Can loan reject after Unconditional approval 13Jul 08, 2014 10:51 am What a bummer, hopefully he picks up work soon, or has income insurance? This can sometimes save you from these kinds of problems! Best of luck, I hope it all works out in your favour Re: Can loan reject after Unconditional approval 14Jul 08, 2014 11:37 am Joined:Jul 01, 2014 09:47am Last visited:Jul 01, 2014 09:51am Another single post OP who hasn't bothered to come back again. Completed a knock down and rebuild in northern Melbourne. Handover completed 27/09/2013 and now moved in. Re: Can loan reject after Unconditional approval 15Jul 08, 2014 12:40 pm Bluesuede Joined:Jul 01, 2014 09:47am Last visited:Jul 01, 2014 09:51am Another single post OP who hasn't bothered to come back again. Or perhaps the stress of the unfortunate position they have found themselves in has kept them busy elsewhere, trying to sort out what to do next. I agree, sometimes people chuck out a question, never to return. But I think under the circumstances here, they can be forgiven. Re: Can loan reject after Unconditional approval 16Jul 08, 2014 1:18 pm Marcia Bluesuede Joined:Jul 01, 2014 09:47am Last visited:Jul 01, 2014 09:51am Another single post OP who hasn't bothered to come back again. Or perhaps the stress of the unfortunate position they have found themselves in has kept them busy elsewhere, trying to sort out what to do next. I agree, sometimes people chuck out a question, never to return. But I think under the circumstances here, they can be forgiven. I totally agree Marcia. These poor people would be totally stressed and spending their time looking for a solution. Hope everything turns out well for them in the future. Re: Can loan reject after Unconditional approval 17Jul 08, 2014 3:46 pm Shanni, May I suggest that you ask the bank to provide you a reason in writing as to why and on what terms they are relying upon in order to revoke your unconditional offer? this would taking the guessing game out of it. I cannot tell you whether they are able to do this or otherwise without viewing your contract however, may I suggest that you also place in a complaint with the ombudsman regarding thie revocation. If they merely revoked it with no explanation without having the same placed in writing it is questionable as to whether they in fact had a right to revoke the offer or otherwise? Hope this has helped you.. Re: Can loan reject after Unconditional approval 18Jul 08, 2014 5:55 pm Not a lawyer myself however I am pretty sure that the bank is not under any obligation to disclose why the offer has been withdrawn. I suspect that it is due to the ability to service the debt going forward and in the absence of further information to demonstrate ability to pay the bank is reassessing relative credit risk. Good luck and I hope the situation improves. Re: Can loan reject after Unconditional approval 19Jul 08, 2014 6:04 pm Bluesuede Joined:Jul 01, 2014 09:47am Last visited:Jul 01, 2014 09:51am Another single post OP who hasn't bothered to come back again. dont need to log in to read the responses. Creator of superduperonium, expert at expert things, nobel laureate, can hold my breath for 10 minutes. Re: Can loan reject after Unconditional approval 20Jul 08, 2014 11:47 pm Ponzu thank you for correcting. I actually meant conditional before unconditional. Sorry I'm a first timer here so everything is still all new to me. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 18897 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11893 Depends what you're current inclusions are, but we're not including wardrobes and will just use second hand ones until we can save later on to get them built. Also have a… 3 11596 |