1 Comment 1 Commentby Jenny Ruth
ASB Bank is one of the few that have. "We’ve been talking to the building industry professionals and they’ve given us very good advice on what type of buildings are likely to have a higher probability of having leaking problems," ASB’s head of retail banking Barbara Chapman says.
Where necessary, the bank now asks for a report from a suitably qualified building inspector before agreeing to provide mortgages on such properties.
"What we’re finding is that customers themselves are being quite cautious" and many more are getting building inspections before purchase in any case.
HSBC is the other bank to institute a formal policy. It now requires registered valuations for mortgages on all apartment and terraced house developments. Where the valuer raises any doubts, it requires a full building inspection. For all houses of "Mediterranean" style with no eaves and monolithic cladding and which were built in the 1990s, it requires a full building report.
It also won’t lend on developments already publicly identified as having leaking problems.
Both ANZ Bank and Bank of New Zealand are still reviewing their lending policies but haven’t come to any decisions yet.
Other banks, including AMP Banking, TSB Bank, National Bank and Westpac don’t have any formal policies but will encourage, although not require, borrowers to seek a building inspection where necessary.
"We’re not sure there are enough people available to do inspections and we don’t want to put extra costs on people unless they’re likely to be at risk," National Bank spokeswoman Cynthia Brophy says.
Westpac spokeswoman Jane Anderson says it isn’t uncommon for mortgage holders to come up against non-scheduled maintenance problems that they can’t afford.
"We’re always happy to talk to customers about how we can help them, particularly where, if the maintenance isn’t done, the value of the property will decline," Anderson says.
William Cairns of non-bank lender Cairns Lockie doesn’t agree with a blanket ban on lending to affected buildings. If leaking problems on a particular property cost $20,000 to fix and the buyer can get a $40,000 discount on what would otherwise be the market price, "it’s probably still a good deal," he says.
Some people are panicking unnecessarily about the publicity and worrying about much older buildings which clearly aren’t affected, Cairns says.
Neither Wizard Home Loans nor its insurers have yet felt the need for special policies but may request a building inspection if the valuer’s report raises concerns, says New Zealand head John Grant.
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Further investigation reveals that this lender is the only one which, as a matter of course, requires vacant possession of it's mortgagee sales prior to putting them to auction and will get a court order demanding this if the mortgagor resists or wants to hold over.
Would it be cynical to think that this mortgagee is being somewhat less than ethical and using the fact that a mortgagee can sell a property at auction with no risk of comback and has no duty of disclosure as to weathertightness?
Yes, caveat emptor is the prime rule when purchasing at mortgagee sale but to blantantly attempt to disguise evidence of a leaking home and trying to pass the problem onto some other possibly naive unsuspecting purchaser is a bit beyond the pale in the current market when people are losing their homes.
And of course, to point out that this mortgagee was very closely linked to some of the shinanegans on Wall Street that lead to the current financial collapse would also be unfair. NOT.
Check out C/T NA139D/307 Lot 2 DP 211786