Recently, Federal government as well as state government both announced bunch of packages to boost the home market. So now it should be a quite good time to build a house.
However, remember, when you apply for the home loan, be careful.
Do not use Westpac.
Mr P nearly lose all his down payment just because they use westpac home loan.
Here is the details:
Mr P and his wife both got their permanent resident visa early this year, so they decide to buy a house and start their new life. After month researching, they found a quite good house, and place the offer. Luckily, they sign the contact with the seller in March.
The contact is subject to finance. Mr P will need to apply for the home loan(Of course), and if his home loan application declined, he will get his bond back, which is the standard procedure. And seller will re enter the market to sell his property.
After that, Mr P prepare all the documents and then submit the home loan application to westpac in April. Everything ran quite well, on April 23, he got the unconditional offer from Westpac. Normally this means there will be no problem later, and he just need to wait for the settlement.
Consider that it is within the COVID-19 pandemic period, so they booked the settlement date a month later, which is on May 25.
And he signed all the required Mortgage documents and post to Westpac settlement office on May 1. Record showed that all the documents were received by westpac on May 7.
From now, things start to go away from the normal direction.
On May 15, 2 weeks before settlement date
Mr P’s settlement agent called the bank to ensure everything is on the track, however bank responded that they have not received the Mortgage documents. So Mr P provide the AUPost record. Then the bank respond that they already received the documents, will handle it.
On May 22, 1 working day before settlement date
Mr P’s settlement agent called the bank settlement team again, to confirm the settlement on next Monday. Bank settlement team said they will not be able to do it on Monday, because record shows they still need some supporting documents. When asked what kind of supporting documents, they said they do not know. And let Mr P contact his broker, and let the broker contact his BDM. They tried, no response from BDM.
- Bank settlement team said they can not settle as they need some more supporting documents, but can not give any more details about the supporting documents
- BDM no response
- Westpac hotline responded that Mr P should still contact the BDM
On May 25, scheduled settlement date
So Mr P and his team keep callling the BDM and hotline.
- BDM still missing, no respond.
- Took at least an hour each time to get through the hotline, and at the beginning, hotline let Mr P keep trying to contact the BDM
- However the BDM still missing, so after several calls, hotline start to say that they will tell the BDM to respond ASAP, however still nothing
- in the end, the hotline provide Mr P some other BDM’s contact detail, however, they can not reach anyone.
Under this circumstances, the broker’s senior manager contact senior manager inside westpac, trying to resolve the issue. The westpac senior manager told them they will need to provide the proof that they have enough money to pay the down payment.
It is quite unreasonable, because Mr P already put all the money in a westpac account, and has stated that they will use this account to pay the down payment, Westpac should be able to check that.
Since the manager said that, Mr P download the statement and provide it immediately.
on May 26, a day after scheduled settlement day
After providing the documents, Mr P and his team then keep calling Westpac and the BDM to get feedback, and want to settle ASAP. However, the whole day:
- No feedback from bank
- Still can not contact the MISSING BDM
On May 27, Wednesday
Repeat the procedure the same as the day before. Still no response.
Here we will talk a bit about the settlement procedure. Normally, settlement date is a day that seller’s settlement agent, seller’s bank’s, buyer’s settlement agent, buyer’s bank, and the government together to handle the settlement, transfer the title and money between seller and buyer.
Normally, it will finish within the day. But sometimes, the government system may under maintenance or some other special condition, there is a graceful period for the settlement, normally 3 calendar days.
If you can not settlement within the graceful period, buyer will need to pay the penalty. In this case, if Mr P can not settlement on Thursday, he will need to pay the penalty from Friday.
- If he finished the settlement on Friday, he will need to pay penalty 4 * 200 = $800
- if he settlement next Tuesday(Next Monday is Western Australia day), he will need to pay 8 * 200 = $1600 penalty
So Mr P really want this to be resolved on Thursday.
On May 28, Thursday
Repeat the same thing day before, calling bank and BDM. Nothing
Then at the lunch time, the Missing BDM finally showed up, called Mr P’s broker, ask quite a lot questions.
And in the end he said:
This case in under audit, and the audit team require further more documents to show the source of the funding. Mr P will need to provide all the documents they have, and then the audit team will review the case based on that.
And he claimed that the audit procedure is their westpac standard procedure, the audit team has right to review all the applications at any stage, and has the right to decline it.
The broker said it is fine, but can the BDM provide an official email which list all the documents they want.
The BDM said NO
Even though the BDM are not following the standard procedure to resolve the case, but considered that he already missing for 5 days, Mr P had to get all the transactions documents ASAP, and submit all the documents to the BDM around 5pm AWST
Now, Mr P was under a very difficult situation.
Because the bank already gave him the unconditional offer on April, (which normally means they will give you the money anyway), the condition “Subject to finance “ is invalid, so their is no protection for him anymore.
Now the BDM said they will need to review the application, and may decline the application.
If they decline the application, they will leave Mr P only 3 options:
- Apply another home loan, and normally it will take at least a month, and nobody can guarantee 100% approved. So Mr P will at least pay $7000 penalty.
- Full payment to get the house. As you know, it is nearly impossible, if you have that much money to buy a house, you will not apply the home loan
- Then the only option is to exit the contact. In this condition, if the seller sold the property with a very low price, then Mr P will need to pay the difference, and get nothing. So possibly, he may lose all his money, just because he use Westpac for home loan.
We also consulted several brokers, they confirmed that the Westpac really has this kind of audit procedure, and only Westpac has this kind of procedure. Other banks like CBA, if they need any documents, they will require it before they make the unconditional offer.
And also they mentioned that the westpac processing speed is the lowest, so they normally will never use westpac.
On May 29, Friday, $800 penalty day
After the sleepless day, Mr P finally got some good news, the reviews has passed, so they can arrange the settlement.
So they started to keep calling the BDM and the bank to speed up the settlement process.
As you think, Westpac will not handle it so quickly, Mr P will need to have a long long long weekend, and wait for Next Tuesday.
On June 2, Tuesday, Penalty $1600 day
Finally, after another 4 rounds calling, Mr P paid $1600 penalty and get it settled.
12 sleepless days(From 5.22-06.02), hundreds of calling, and $1600 penalty, Mr P finally got his house. I bet this is one of the most unforgettable and worst memory in his life.
Review
We reviewed the whole process and has some guess about what and why all of this things happened.
Guess A
They is no audit team, there is no audit procedure. Westpac settlement process is normally slow, just another normal case in Westpac. The BDM knew all about it, so he missing for the first 5days. In the end, he just tired of Mr P’s call and emails, so he lied, make up a story about the audit team. That’s why he has not provided the official email when he requested the documents.
In fact he also threaten the broker
Do you want to further process the case or not
this is want the BDM said when the broker asked for the official email
Guess B
There is no one lied during the whole process, there is really an audit team, and the case really under audit. If that’s the case, then it means after you get the unconditional offer from westpac, you will have endless sleepless night until successful settlement, because they can still decline your application and make you lose all your down payment money.
At the same time, if you use other banks, after you get the unconditional offer, you can start to plan for your new life.
Guess C
Westpac inside management procedure has quite serious problem. There is no one lie here, but quite a lot misunderstanding.
The proof of the funding source is required by the audit team before the unconditional offer made, and the guy who made the unconditional offer had not received this information.
So Mr P got the unconditional offer in April, however, at the same time, in the Westpac end, this case still required the supporting document for the funding source. And there is no one assigned to follow up the case, which left the case in the air.
The BDM spent 5 working days, finally found out what’s really going on here. And to cover his and his teammates’ mistakes, he asked Mr P to provide the documents without issuing any official emails. And made the case pass the review as soon as he received the documents.
No matter which one is the fact, do not use Westpac for your home loan.
They will make you lose all your deposits, or at least $1600 penalty.
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