Ombudsman fields gripes over banks' behaviour after rule changes

By Steve Deane

Today two more disgruntled would-be homebuyers shared similar stories about their banks. Photo / Getty Images
Today two more disgruntled would-be homebuyers shared similar stories about their banks. Photo / Getty Images

The banking ombudsman has had 10 complaints about the loan-to-value-ratio (LVR) changes introduced on October 1, with eight related to banks withdrawing prior approvals.

A spokeswoman said they had been referred back to the banks to be dealt with internally. The ombudsman would then investigate if the complaints were not resolved.

Yesterday the Herald reported the story of a BNZ customer whose loan approval was revoked less than 24 hours after he was told it was valid.

Today two more disgruntled would-be homebuyers shared similar stories about their banks. Both spoke under the condition of anonymity.

An Auckland couple said they had received several reassurances from their bank that a three-month loan approval granted in August was still valid. They put in a $600,000 offer on an Otahuhu house that was verbally accepted. But the seller fell ill, delaying the signing of the deal. The couple then got a phone call from their bank saying their loan approval had been withdrawn.

"It kind of sucks," the customer said. "If we had signed on Tuesday we would have had [the house]. If we had known two or three days in advance we could have done something. Now it's like, come back in two years time."

The couple, who had raised a 5 per cent deposit and borrowed a further 5 per cent from their parents, were told by the bank their best option was to borrow a further $60,000 from their parents.

Another customer said her loan approval had been revoked after she and her husband had signed a contract to buy a Papakura house for $560,000.

"We then had to face the agent and the lawyer with such embarrassment," she said. "I had to contact my lawyer and advise him to cancel the contract in a day."

After she threatened to take the matter to court the loan approval was reinstated, but by then it was too late as the seller was negotiating with another buyer. Her bank told her the reinstated approval was valid only for the purchase of the property she had originally attempted to buy.

"It's amazing how such a big bank can ruin our dreams."

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a5 at 17 Sep 2014 18:45:19 Processing Time: 778ms