Surviving the off-the-plan finance crunch
Australian Financial Review Jul 28 2016 4:36 PM
Duncan Hughes
Editor Comments in Italics: The off the plan crisis is not because of so called 'strict lending rules' as there is no enforcement of law and never has been. That is pure regulator spin! Crunch is because the loans were the usual sub prime Model and the glut of units a key indicator that prices $100k over the top with shonky valuations. We know how that works..................Shanghai clientele are also waking up to Australian banks crappy lending practices..................fraud on every page! Dog Box apartments mass produced will not meet the seeing eye test and therefore unsaleable. Sold to overseas clients treating them as cannon fodder. Nasty little dark markets...................Consumer victims will soon be waking up to these shams.
Off-the-plan investors struggling to complete their apartment purchase because of strict new lending rules are being urged to face tough options to get their financial problems under control.
Financial advisers and financiers say thousands of investors with exposure to billions of dollars in high-rise apartments are searching for ways of deferring, reducing or off-loading payments through alternative funding or selling the apartments, typically around central business districts.
New private-equity products – with much higher charges than bank lending products – are also being launched.
The scale of the problem is unclear but anecdotal observations from financial advisers in Australia and Shanghai (where many buyers live) are that it could be big – and growing.
"More than one in three of our clients who bought off the plan are having problems," says Peter Ristevski, a partner with Chan & Naylor, a national advisory group. What a surprise!!!!!
While it seems to be mostly overseas buyers facing a finance crunch, this can cascade into big problems for local property investors. If overseas buyers want out, prices will fall.
Trying to sell
"It is getting worse," adds Ristevski, who is based in western Sydney. "Potential distressed buyers are growing more sceptical about the prospects of losing money – they are worried that they will be left holding the baby if things go wrong."
Lanny Xu, chief executive of Iron Fish China, a broker's agent in Shanghai, said about 20 per cent of his clients who purchased Australian apartments cannot complete the deal and are trying to sell.
Other agents claim financing from major banks has been "frozen" and say their clients are desperately seeking alternative funding or finding another buyer.
"I have stopped dealing in Australian property," says Mark Yin, an agent with Shanghai-based Home Tree Group. "All deals have been frozen," he said about Australian bank funding.
Agents in Shanghai realise this is a giant Australian Bank Scam.....the wake up call......
Investors rushed into off-the-plan apartments because of stamp duty tax breaks, attractive terms, the possibility of locking in a price in a rising market and prospect of rental income and capital growth.
Investors did not "rush in" that's media hype! Truth is Mums and Dads were spruiked by Aussies in Overseas seminars re off-the-plan scams to pretend they are investors, then demonise them, just as Banks have done to Aussie Mums and dads who are all ARIPS. Victims own their own home and no debt - the perfect PM MalcolmTurnbull target for Bankers to continue their nefarious activities.
They paid a deposit, typically about 25 per cent, when the project was at planning stage, with the remainder to be paid at settlement.
Falling values
"Buyers need to understand that while their bank may provide them with approval-in-principle for their finance, it will usually only last for a short period of time," an AMP spokesman said.
Yes it is the first con-trick of the banking Mortgage Scam funded by Australian banks.............wait for the RMBS Crappy Mortgage Bonds. Was AMP the original banker backing the overpriced products? What about 1 brm one bthrm units sold as 2brm 2 bthm and non existent balconies and views? Reminiscent of Waltcorp scandal in 2003 when we lobbied NSW Parliament on behalf of Australian Chinese victims.
"When the building is completed, they will need to undergo a full assessment, including evaluation of the property, before their bank will approve them for the loan," he said. More Bank Bulldust!
Many lenders that provided deposits are refusing to provide the additional funding for local buyers amid growing concerns apartment values are falling, particularly in Melbourne thanks to over-supply and falling demand.
Ah yes the old deposit bond fraud run by our Banks and Insurance companies no doubt?
Lenders are increasing loan-to-value ratios, restricting some types of income as payment and scrutinising monthly outgoings on other household expenditure more closely, despite falling interest rates.
Yep they started at 138% LVR anyway with hideous cost of bonds. The Model emergeth!
Lenders are closing the door to most offshore investors, particularly from mainland China, because spot checks have revealed widespread fraudulent details about occupations, incomes and other sources of finance needed to pay the debt. Yep, we raped and pillaged and plundered New Zealanders a decade ago in same scams so why not the Chinese neighbours????? Easy pickings for our dodgy banks and their lawyer agencies........
The problem is the most acute for high-rise off-the-plan buyers in Melbourne and Brisbane central business districts and Perth.
To make it worse, many lenders are knocking back lump sums from family and immediate family members in a bid to prevent money laundering, particularly from extended families based overseas.
"Those with problems need to immediately start talking with their lender," says Ristevski. "It's no use ignoring, or avoiding, problems until too late."
Handing keys back Yes indeed hand the keys back and do not get pulled in further into the Banker driven scam. Banks funded developers and seminars to market to those who do not speak English, so all roads lead back to them BUT PM mad Malcolm T still saying No No NO to Royal Commission into Bankers, Insurers and their Valuer Mates.......................Prices are $100k extra debt anyway.......overvalued................
Handing the keys back and walking away from the loan won't get you off the hook as lenders and developers will pursue the buyer for the debt and myriad other expenses involved in tracking the purchaser, legal work and debt interest.
Some lenders are willing to provide better terms and conditions if the borrower can provide evidence of lowering other debt, generating additional income and providing regular payments.
Yep a Giant Ponzi financing Operation and No EXIT from the Control Fraud and in the grip of these Money Merchant Thieves.
This could mean retiring credit cars, paying down other debt, reducing household expenses and providing evidence that other costs, such as tax bills, can be accommodated within existing budgets.
Its called a Banker Engineered wipe out using exaggerated incomes generated by Banker calculator programs!
"In one case, a client who could not get funding sold the apartment and made a profit," says Ristevski. More Bank Bulldust!
"This is an option in Sydney where market values continue to rise, but it might not be in other postcodes." More Bank Bulldust!
Mortgage Choice, one of the nation's biggest networks of mortgage brokers, is watching developments because its advisers are paid commission when an apartment settles.
Yep, we have many local victims of this company - too many!!!!
"Buyers facing funding problems who don't have a lump sum available might be able to use the equity they have in another property," says Jessica Darnbrough, head of corporate affairs.
And once again the Regulators talking up the market as it crashes to earth!!!! Pulling in last minute victims...........
MT's instructions: regulators then resort to do some more asset stripping of the Chinese own homes as security as they did in NZ in 2006
Rescue packages Here come the helicopter money solutions - get the BIG PICTURE????
"Struggling borrowers could also ask immediate family members to go guarantor on the loan so that any shortfall between the lender valuation and developer's price tag is covered," Darnbrough says.
Yep drag in the fraudulent Parental Guarantees as PM Turnbull suggested in Parliament a few weeks ago. We are watching you closely Malcolm, so blatantly transparent and involved in the biggest mortgage scandal this nation has every scene.
Some lenders are not allowing relatives to top up arrears, or take out supplementary loans in their own name.
"Try another lender. One lender might reject but another may approve – they don't all have the same lending policies," she says.
Yes here come the bank swaps and refinancing scams.............this article is a blueprint for how the fraud works for Australian Bankers.
Overseas financiers, typically based in Singapore and Malaysia, are working on rescue packages for borrowers by creating private bail-out funds or buying apartments off stressed purchasers, which means they lose their deposit.
Nothing like international co-operation between Bankers to plug up the holes in their own misery laden creations.
These deals include rolling five-year terms starting at 7.5 per cent, or one-year emergency loans costing up to 12 per cent, according to financiers.
Yes indeed the extra debt PLUG INS....all following the same old scamming techniques due to no Glass Steagall and no enforcement of existing laws............its a free for all Bank Co-operative of Sub Prime Rorts........
Other packages are stepped loans, where different tranches of the loan have different rates, invariably several times higher than Australian lenders' standard variable or fixed-rate loans. Extra variations to hide the intention to deceive...................classic CONTROL FRAUD
By comparison, many Australian lenders offer three-year fixed rates below 4 per cent.
Those considering third-party loans from overseas lenders need to consult with a finance broker about the terms, conditions, rates and suitability of the lender. More fees and charge and lovely commissions and big bonuses for CEO's Everyone wins, oh but not the hapless customer.............bled dry.
In Australia, First-in-Finance, an advisory and finance company, is devising products targeting distressed investors.
Must be banker's choice? Mates of mad Malcolm?
Loans for between 65 per cent and 75 per cent of the outstanding debt are on offer for rates of between 5.5 per cent and 7.5 per cent. Loading at the other end with 138%LVR. We know how it works.............
"We are being fast and flexible in offering products for borrowers that other lenders have lost their appetite for," says partner Matthew Royal.
Nice spiel Matthew!!! Did you practice on your own parents?