BNZ stuffs up

The NZ Herald reports:

An Auckland man is furious his pre-approved home loan was withdrawn less than 24 hours after he called his bank and was assured the deal was sound.

The man and his partner had dropped leaflets across a West Auckland neighbourhood in search of a property and were about to put in an offer for a private sale.

The Bank of pre-approved a loan for up to $800,000 with a $60,000 deposit on September 3, giving the couple three months before the pre-approval expired.

Last Thursday the man, who asked not to be named as he is still hoping to re-finance the purchase, called BNZ and was assured the pre-approval was still valid.

“We said, ‘Is everything all right?”‘ the man recalled.

“They said, ‘Yep, sweet, go for your life, you’re all right’.”

That same day he paid for a valuation report and was about to put in an offer.

But the next day and hours before the start of Weekend he was called by BNZ and told it was withdrawing the pre-approval.

“I’m closing my bank account with them … don’t want anything to do with them. I don’t do like that,” the man said.

There’s really no excuse for that. It is not as if the LVR policy was not known well before September 3. The policy outline has been known for six months or longer.

Also the requirement for no more than 10% of their mortgages to be for mortgages with less than a 20% deposit is over a six month window. It is not a month by month requirement. It is over the period 1 October 2013 to 31 March 2014.

Basically the BNZ has stuffed up its projections.

BNZ director of retail Andy Symons said the bank sincerely regretted any inconvenience the withdrawal had caused the man and his partner.

“BNZ confirmed it has very limited capacity to go on meeting pre-approvals for home with a deposit less than 20 per cent and communicated this to all our bankers on Friday.

“This has been a rapidly evolving situation in which we have worked hard to balance customer demand with the realities of a stringent new regulatory regime.”

Mr Symons said he was keen to talk to the man about meeting the costs of the valuation, and understood his frustration, particularly after he had checked on Thursday to make sure the pre-approval was still in effect.

“Our bankers across the network were informed of the decision on Friday … he may well have been caught in the middle of that change.”

Mr Symons said that after moves by other banks to cancel pre-approvals, BNZ had had an increase in demand for loans.

Surely you honour your pre-approvals before you accept other loans?

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