What To Do When Denied A Loan

H

HardOCP News

[H] News
Joined
Dec 31, 1969
Messages
0
What do you do when your bank denies you a $80k loan / mortgage? Withdraw your $190,000 in savings from the bank…and get it all in $20 bills. I laughed so hard when I read this, I damn near cried. I know it's not tech related but I just had to share this one with your guys.

Defiant Mapua artist Roger Griffiths today made a stand against Westpac by withdrawing his $190,000 savings in $20 notes. Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. "It's about time normal people took a stand."
Click to expand...
 
Good for him. I understand that banks have loan criteria, but come on...200k in cash assets, another 110k in recreation vehicles, and a flawless 25 year credit history with them and they say that doesn't meet their criteria? what a bunch of asshats.
 
To add more insult to injury, anyone notice the other screw ups the bank has done?

He was disappointed when his loan application was rejected, but it was Westpac losing $111 million to Lane Walker Rudkin Industries that tipped his decision to withdraw his money.

"They can lose $110 million with LWR but turn down a normal customer who has never missed a loan payment," he said. "If they don't have the trust in me after 25 years, there's a problem for Westpac."
Click to expand...

Mr Griffiths' protest comes after a series of embarrassments for Westpac. On Tuesday its former Alexandra bank manager admitted defrauding the bank of more than $400,000, and it has been left red-faced over the slip-up that allowed $10 million to be wrongly credited to a Rotorua service station co-owner who had since fled to China.
Click to expand...
 
martinmsj said:
To add more insult to injury, anyone notice the other screw ups the bank has done?
Click to expand...

Yeah it's amazing... good on this guy, he'll be a helluva lot better doing business with a more serious bank... OTOH, Someone's head is about to roll because of all those fuckups in that bank...
 
Good for him! I have family friends that are self-employed and they have had similar issues with loans here in the US. Considering his assets, this is just ridiculous.
 
I know someone that was denied for a multi million house just because he was self employeed, though he was worth several hundred million
 
Climber said:
Good for him. I understand that banks have loan criteria, but come on...200k in cash assets, another 110k in recreation vehicles, and a flawless 25 year credit history with them and they say that doesn't meet their criteria? what a bunch of asshats.
Click to expand...

Devil's Advocate: Something is not right here. In one part of the article it mentions he has 190k, then mention he has 200k. Either way, if that's all he has and he wants to use it all as a deposit where is his monthly payment going to come from? What if he doesn't sell some paintings.

However, the bank is also stupid. Obviously the guy believes the $310k deposit would be best route. So now, the bank only has to front up $75k. If this guy defaults, the bank makes at least $200k (assuming bank sells foreclosure at less than 80% of retail). If the guy doesn't default the bank, makes $40k. Either way, it is a win-win.
 
Reminds me of a story I heard about something similar happening in Spokane WA once.
Customer goes in to bank to get his parking validated (bank was downtown in a mall area and validate parking for customers as it didn't have it's own lot) Clerk wouldn't do it unless he made a withdrawal or deposit. Clerk wouldn't budge. Customer says fine, I'll make a withdrawal and close my accounts.

To the tune of 1 million bucks.

Don't know how true this is, but it makes for a good laugh.
 
Ok here is what I do not understand about the story.

If you have 190,000 in cash/liquid assets why would you take on a loan? It is not like savings or MMA accounts are returning more than 2 percent in this market. Even the S&P is likely to give a Rate of Return of 3-4 percent until we are out of the recession.

So why the hell did he need a personal 80,000 loan? To me it seems like he was going to move his assets anyways and just wanted to see if he could get approved for a loan.
 
roaf85 said:
Ok here is what I do not understand about the story.

If you have 190,000 in cash/liquid assets why would you take on a loan? It is not like savings or MMA accounts are returning more than 2 percent in this market. Even the S&P is likely to give a Rate of Return of 3-4 percent until we are out of the recession.

So why the hell did he need a personal 80,000 loan? To me it seems like he was going to move his assets anyways and just wanted to see if he could get approved for a loan.
Click to expand...

He had 190k, that is probably what he uses for money between jobs. Remember he doesn't have a steady income, so maybe one month he makes $20k, the next two nothing, the next $50k..... So he isn't going to want to take every cent that he has and put it into the house. Instead you take out a loan and pay it off. Might only take him a few years to pay that off by it would be better than draining himself of all his money.
 
roaf85 said:
Ok here is what I do not understand about the story.

If you have 190,000 in cash/liquid assets why would you take on a loan? It is not like savings or MMA accounts are returning more than 2 percent in this market. Even the S&P is likely to give a Rate of Return of 3-4 percent until we are out of the recession.

So why the hell did he need a personal 80,000 loan? To me it seems like he was going to move his assets anyways and just wanted to see if he could get approved for a loan.
Click to expand...

Didn't read the article did you? He was trying to buy a $385,000 house.

He had $190,000 in savings and a $110,000 RV that he was selling.

$190k + 110k = $300k. So he was about $85k short.
 
So why the hell did he need a personal 80,000 loan? To me it seems like he was going to move his assets anyways and just wanted to see if he could get approved for a loan.
Because he was wanting a $385,000 house and only had about 210,000 to put down on it. lol.
 
I would seriously consider moving to China for ten million too.:D
 
lol my friend is a banker... just a funny story old lady that "i know chase bank's owner" story..

500k in retirement savings, thats it.
-husband is dead

-wanted to take out 200k loan...
-denied

why take out a loan if you have the money and no new income?
if she had 50k/year coming in... yes get a loan and get approved.

since she did not and only has 500k she is an idiot. you would take out a 200k loan, and in the end owe more money than you have (over 500k in the lifetime of the loan payments)

err people
 
Monkey34 said:
I would seriously consider moving to China for ten million too.:D
Click to expand...

Not Me, I don't know anyone there, Big Bear or somewhere in northern Arizona(I like pine trees more than I do Desert), sure. But I'll take what I can get, As It's better than nothing at least. :D
 
Exavior said:
He had 190k, that is probably what he uses for money between jobs. Remember he doesn't have a steady income, so maybe one month he makes $20k, the next two nothing, the next $50k..... So he isn't going to want to take every cent that he has and put it into the house. Instead you take out a loan and pay it off. Might only take him a few years to pay that off by it would be better than draining himself of all his money.
Click to expand...

ryan_975 said:
Didn't read the article did you? He was trying to buy a $385,000 house.

He had $190,000 in savings and a $110,000 RV that he was selling.

$190k + 110k = $300k. So he was about $85k short.
Click to expand...


Both of you fail to realize that the loan is short of the cash down. Both of you agree that he has a un-steady income, so why would he spend all of his savings plus his other assets?

Once you go all in with your liquid assets and you rid yourself of all your collateral, there is no other assets left for the bank to lean on.


So yeah, I agree with the bank. The guy has no income that he can depend on, but he wants to take a 80k loan and dilute all his collateral with nothing remaining to lean the mortgage.
 
Ockie said:
Both of you fail to realize that the loan is short of the cash down. Both of you agree that he has a un-steady income, so why would he spend all of his savings plus his other assets?

Once you go all in with your liquid assets and you rid yourself of all your collateral, there is no other assets left for the bank to lean on.


So yeah, I agree with the bank. The guy has no income that he can depend on, but he wants to take a 80k loan and dilute all his collateral with nothing remaining to lean the mortgage.
Click to expand...

We have no idea what other assets he has. The article only mentions the money he was putting forward to buy the house, and it also mentioned 500/week the commercial property included with the purchase was going to pull-in. So that right there is $2,000 / month of steady income. I'm pretty sure a mortgage on $80k isn't going to be near that.
 
jroe52 said:
lol my friend is a banker... just a funny story old lady that "i know chase bank's owner" story..

500k in retirement savings, thats it.
-husband is dead

-wanted to take out 200k loan...
-denied

why take out a loan if you have the money and no new income?
if she had 50k/year coming in... yes get a loan and get approved.

since she did not and only has 500k she is an idiot. you would take out a 200k loan, and in the end owe more money than you have (over 500k in the lifetime of the loan payments)

err people
Click to expand...

Pretty simple really. You generally get 6-10%+ return on stocks. Depending on what the loan was for, you can get a 4-6% interest rate. Leaving your money in stocks would technically give you a better return (save more money). Of course, that is dependent of stocks keeping 8-10%. Not only that, but the 500k is still available for other needs. (You do have to pay taxes on the money made from the stocks though, so figure that into the percentage)

This explains why most people really don't know how to manage their money well.
 
ryan_975 said:
We have no idea what other assets he has. The article only mentions the money he was putting forward to buy the house, and it also mentioned 500/week the commercial property included with the purchase was going to pull-in. So that right there is $2,000 / month of steady income. I'm pretty sure a mortgage on $80k isn't going to be near that.
Click to expand...

Well I'm going with what we do know. He does not have a steady income and he was unable to prove that he can provide a steady 500/mth income.


I'm not sure where you pull $2,000/mth from.


However, if he's buying a house and has that all in savings, I can assure you he probably does not have other assets he can lean on.
 
Ockie said:
Well I'm going with what we do know. He does not have a steady income and he was unable to prove that he can provide a steady 500/mth income.


I'm not sure where you pull $2,000/mth from.


However, if he's buying a house and has that all in savings, I can assure you he probably does not have other assets he can lean on.
Click to expand...

$2,000 a month is what $500 a week gets you.

And how can you assure me? Some people DO save up for things like houses. and considering he had a $110,000 RV (that from the sounds of it was paid off), I doubt all else he had to his name was $190,000 cash.
 
Climber said:
200k in cash assets, another 110k in recreation vehicles
Click to expand...

SpeedSlayer said:
Obviously the guy believes the $310k deposit would be best route.
Click to expand...

Wow, after reading about the bank, the guy's the even dumber one here, if he was going to keep all that money at that bank:

http://www.fdic.gov/deposit/deposits/insuringdeposits/

"Historically, insured deposits are available to customers of a failed bank within just a few days. Since the start of the FDIC in 1933, no depositor has ever lost a penny of insured deposits."

I certainly wouldn't keep more than $250K there...

It's amazing reading about the people that lost money in the financial collapse, some of them business owners (meaning they knew better)... The FDIC actually had to go on the defensive to state that no one lost FDIC INSURED money... If you kept more money there than was insured, well, how does it help to get on tv and cry about it?

If you have money that losing it is worth crying over, spread it around different banks...

My first job was for a bank, and I've also worked for insurance companies... Neither is worth having any loyalty to whatsoever...
 
I think this was really a plot to get a free sports bag to carry the money in. :p
 
ryan_975 said:
$2,000 a month is what $500 a week gets you.

And how can you assure me? Some people DO save up for things like houses. and considering he had a $110,000 RV (that from the sounds of it was paid off), I doubt all else he had to his name was $190,000 cash.
Click to expand...

So the article left out prior or existing assets in the sake of sensationalizing it? You don't think it would have mentioned another home?

I'm not really going to argue much further here, I've been in this arena for quite some time and own my own home so I know what it takes to make this work. Obviously this tool did not have it.

GJSNeptune said:
God-damn. How do you protect yourself walking around with $190k in cash?
Click to expand...

You act normal and don't worry about it, you don't need to do much more than that.
 
But...

"Hey, what's in that huge bag?"
"Um. Confetti and breads for Mardi Gras?"
"Oh, oka--hey, wait, it's July."
"RUN!"
 
Ockie said:
So the article left out prior or existing assets in the sake of sensationalizing it? You don't think it would have mentioned another home?

I'm not really going to argue much further here, I've been in this arena for quite some time and own my own home so I know what it takes to make this work. Obviously this tool did not have it.



You act normal and don't worry about it, you don't need to do much more than that.
Click to expand...

far be it from an internet article to sensationalize it. And where did I say he had another home. Maybe his RV was his home, who care, people sell their current houses to buy another all the time.

And yes, my dad and I bought a house before as well, with zero assets other than the 20% down payment, his disability check and my part-time job.
 
And it's precisely how to get out of it. Just be smarter this time. No appraising fraud.
 
ryan_975 said:
far be it from an internet article to sensationalize it. And where did I say he had another home. Maybe his RV was his home, who care, people sell their current houses to buy another all the time.

And yes, my dad and I bought a house before as well, with zero assets other than the 20% down payment, his disability check and my part-time job.
Click to expand...

If he had another home then where does that come into the equation? See what I mean? All these things are weighed.

You are simply arguing for all the unknown variables.... hell, maybe I should say that he's declared bankruptcy twice in the past... I mean you're pulling shit out of your ass why can't I?

So you say he makes 2k per month with a property plus hovever else he makes money, and he needs an 80k loan? Talk about a major ass red flag.


Your dad lived his entire life without any type of assets? I find that hard to believe. Secondly, I'm sure you didn't buy a 385k house on your part time job either.
 
roaf85 said:
Ok here is what I do not understand about the story.

If you have 190,000 in cash/liquid assets why would you take on a loan? It is not like savings or MMA accounts are returning more than 2 percent in this market. Even the S&P is likely to give a Rate of Return of 3-4 percent until we are out of the recession.

So why the hell did he need a personal 80,000 loan? To me it seems like he was going to move his assets anyways and just wanted to see if he could get approved for a loan.
Click to expand...

RTFA
 
GJSNeptune said:
And it's precisely how to get out of it. Just be smarter this time. No appraising fraud.
Click to expand...

Banks are making way too much money now with their new rules and their fresh government check... fuck the people (that's their logic right now)
 
Ockie said:
If he had another home then where does that come into the equation? See what I mean? All these things are weighed.

You are simply arguing for all the unknown variables.... hell, maybe I should say that he's declared bankruptcy twice in the past... I mean you're pulling shit out of your ass why can't I?

So you say he makes 2k per month with a property plus hovever else he makes money, and he needs an 80k loan? Talk about a major ass red flag.


Your dad lived his entire life without any type of assets? I find that hard to believe. Secondly, I'm sure you didn't buy a 385k house on your part time job either.
Click to expand...

what am I pulling out of my ass? all I said is that the article only discusses what he used to try to get the loan with.

And I didn't say he makes 2,000/month. I said the property he was trying to buy had a commercial side that was going to bring in $500/week, and that it would surely cover the mortgage in the month that he wasn't making money.
 
You must log in or register to reply here.
Back
Top