'The Computer Says No' to Older Borrowers
By Broker News | June 27, 2012 10:55 AM EST
Brokers have flocked to the Austaralian Broker Online forum to detail numerous experiences of older borrowers being knocked back by the banks.
John Robbo was quick to weigh in, saying the problem "badly needs looking at".
"Classic example is a client of mine who is 56 and has a very high salary. Lives in a 9 bedroom 5 bathroom home in Sydney. Property is worth $2.7M and wants a $1.1m refinance. Nobody will do it," he explained.
"He wants to sell the home on or before retirement as it is massive and far too big for two retirees - but all lenders say that selling the property is unacceptable - even though he would have to sell the property if it was unencumbered because of its size. This policy is ridiculous!"
Despite other similar cases coming to light, SteveOz disagreed, saying "it's just not that simple".
"Given today's environment where people are unable to take responsibility for their actions and change their minds like the weather here in Melbourne, you can't just take a clients undertaking that they will 'sell' their property upon retirement if they can't afford the repayments. You've basically put them into hardship anyway!" he said.
However, this was enough to make some brokers' blood boil - as Judy West exclaimed.
"We certainly live in 'Nannysville' in Australia where we treat anyone over the age of 55 (the new 75) as incompetents," she said.
BJ detailed his understanding, which included the longevity risk of a client, and the lack of desire on the part of the bank to be left holding a physical property asset.