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Banking Ombudsman reports 18% rise in mortgage finance complaints

The general downturn in the economy, the ING frozen funds debacle and an 18% rise in mortgage finance complaints contributed to what the Banking Ombudsman has described as a year "unprecedented in the history" of the scheme.

Tuesday, November 16th 2010, 1:28PM

by Benn Bathgate

In its full year report the Ombudsman revealed it completed double the investigations over the 2009/2010 year than in any previous year and facilitated $14.5 million in compensation to complainants.

Over three quarters of the completed investigations over the financial year related to investments and superannuation, largely relating to ANZ/ING, and mortgage finance, an area that saw complaints increase by 18% on the year earlier.

The Ombudsman said that while mortgage finance complaints increased, the nature of the complaints changed over the year.

At the start of the year the bulk of the complaints regarded fees for breaking fixed term mortgages. By the end of the year the majority of complaints were from customers that had fallen into arrears, sold their homes and been forced to pay early repayment costs.

The Ombudsman received a number of complaints relating to a bank's removal of a discount on a floating interest rate home loan when interest rates began to fall.

Complaints over break costs "were a particular feature in late 2008" but declined dramatically when mortgage rates began to fall, however they nevertheless "constituted a large proportion of our non investment-related disputes."

Over the year the report highlighted a growth in mortgagee sales though "Our experience has shown that banks have made considerable efforts to assist customers to work through hardships and keep their properties."

The Ombudsman received 27 complaints linked to mortgagee sales, of which nine resulted in formal investigations and two led to settlements with complainants.

More than 23 complaints were lodged in relation to allegations of banks' irresponsible lending, particularly with relation to property.

However, the report said, "We note that in the post 2008 environment, most banks have considerably tightened their lending criteria and stopped the practice of ‘low doc' loans, where less rigorous documentation is required."

 

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance ▼8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 ▼5.79 ▼5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard ▼7.69 6.69 6.39 -
Heartland Bank - Online 6.99 ▼5.49 ▼5.39 ▼5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.60 6.65 6.40 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 ▼6.69 ▼6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 ▼5.79 ▼5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 ▼5.75 ▼5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - ▼5.89 ▼5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 ▼4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.19 6.49 ▼6.39 ▼6.39
TSB Special 7.39 5.69 ▼5.59 ▼5.59
Unity 7.64 ▼5.79 ▼5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society ▼7.70 ▼5.95 ▼5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.84 5.75 5.69

Last updated: 9 December 2024 10:05am

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