2015 - 2016

Lending

Property lending

Mrs C applied for a loan from her bank to purchase an investment property.  The bank considered her application and declined it, telling her she was too reliant on boarder rent for income.  She applied to the same bank several months later and this time her application was approved.  Mrs C believed the bank had mishandled her original application by miscalculating her weekly income and expenses and not advising her that she could break her existing loans and reduce her credit card limits.  She wanted the bank to pay her $50,000, which she believed was the average increase in property prices in her area.  The bank declined to do so and Mrs C brought her complaint to our office.

We explained we could not consider a complaint about the bank’s commercial judgment in declining her original application, but could consider whether the bank had made any errors when it assessed her application.  

We were satisfied the bank correctly calculated Mrs C’s expenses, based on the information she provided.  We also found the bank’s responsibility was to consider her application and advise her of the outcome.  It was not her financial advisor and did not have a wider duty to advise what additional steps she could take to have an application approved in the future. 

We noted Mrs C’s second application was approved due to a change in her income and expenses – not because the bank mishandled her first application.