SA Home Loan Refinance Debacle - Void Contract?

[Kfaz]

Hello,

I am looking for some solid advice please

I refinanced my home loan a couple of years ago through an online broker. The whole and sole purpose of seeking this loan was to get rid of three credit cards and get a cheaper home loan rate, as I had enough equity in my home to do so.

After being formally approved for a specific interest rate over 30 years, the broker then changed my loan term from 30 to 40 years before signing, plus increased the rate slightly, making the excuse that my unsecured credit cards were risky. He assured me that after a short period of time there was a way he would get me a "no cost rate reduction", as long as my payment history with the new lender was good. I had this in writing via email so felt reassured that he was going to help me.

4 days before settlement I gave the broker via email the latest credit card payout figures and validity dates, ready to pay out, which he thanked me for. My Mortgage contract specified under the 'Special Conditions', that all three credit cards were to be paid out and closed prior to the settlement taking place, as part of this consolidation.

AFTER the settlement date I find that my payout figures were ignored by the broker, and that only one small credit card was paid out in full! The other two larger cards were partly paid, but not in full, and to my horror were left open for me to use! This is the most irresponsible thing that could have happened to me.

The broker looked in to this issue at the time and simply forwarded me the solicitors disbursement schedule and said have a nice weekend.

In addition to this, I tried to get the said rate reduction some months later, and they tried to dupe me again as they claimed I had dishonoured payment - this was purely due to a weekly payment not reaching them because of a public holiday. The weekly payment reached them the next week, and never once was my monthly loan instalment missed - I was never in arrears. They then tried to persuade me to refinance with them to get a reduction.

I lodged formal complaints with the broker and lender the next year, and have received the run around ever since. All I get is 'Please send us your financials again, we will re-value your home. Then IF it is at 80% LVR we can re-finance you at low cost.' This is not what I was led to believe was going to happen, I have emails prior to signing the inital refinance where I was querying the rates and any possible 2nd refinance, as this is not what I was after, I was then reassured it was an easy rate reduction.

The stress toll this has taken on my family the past 3 years in huge. I'm now locked into a 40 year loan, at a very high rate (above 7%), and have two credit cards to still pay off that should not be there.

My questions are:

1) Is my Mortgage contract void, as the Special Conditions were not met - the payout and closure of the three credit cards did not occur and I still am paying two of them out?

2) Is the broker liable for damages as the whole purpose of this refinance was to get rid of my three cards (I actually pulled out of a previous refinance with another broker as two of the cards were not going to be consolidated. This proves it was my only purpose, and is documented in my emails with the broker - this was clearly my only intention). They have led me up the garden path by locking me into a 40 year loan, with high interest rate, this loan was obviously not in my best interest.

3) Can I claim back the extra interest payments I have been unfairly paying for 3 years due to the lies and misleading information? I have paid my loan every week since its inception! Yet no rate discount has still been issued!

Does anyone have any advice for me? I am truly at my breaking point and don't know what to do next.

Sorry for the lengthy post, and thank you for any advice you can offer me going forward. Please, only genuine responses

 

[Rob Legat - SBPL]

In answer to your questions:

1. No, but you are possibly in breach of your loan. Whether the requirement was a condition of your ongoing credit contract, or simply a pre-cursor to drawdown, will depend on the wording in your loan documents. Even then, it's likely that the wording in the contract makes it something actionable by the lender only (so that you couldn't terminate the contract because the credit cards weren't paid out).

2. Firstly, the whole purpose of the refinance was not to get rid of your three cards - you already stated the purpose was to do that and get a cheaper home loan interest rate. Change your wording to 'a primary purpose' - not 'whole purpose'. It may sound like splitting hairs, but the difference could be important later and by that time it's too late to change what you've said. The broker can be liable for the damages you have incurred, and the whole transaction will need to be unraveled to see what happened and where.

3. This is possible.

My suggestion is to make a complaint to the Australian Financial Complaints Authority (AFCA - www.afca.org.au). They are the external disputes resolution provider for all Australian Credit Licensees (ACL). Since your credit contract was for a home loan, I'm inferring that it was by necessity a consumer credit transaction - which makes having an ACL mandatory; and all ACL holders must be members of AFCA. When making your complaint, specifically mention that you've already raised the issue with the broker - as that qualifies as having gone through their internal processes.