First Home Buyers Swamping Banks
LENDERS are struggling to keep pace with an unexpected increase in applications from first-home buyers, taking as long as a month to approve loans, which has led to some buyers missing settlement dates.
Strict new lending criteria are adding to delays, as is the inexperience of new home buyers having trouble navigating a maze of paperwork.
Banks are being forced to add staff to mortgage processing divisions, which they had previously run down.
In a recent note to mortgage brokers, seen by the Herald, St George Bank’s head of intermediary distribution, Steve Heavey, said the bank had hired additional staff to cope.
“Our processing area continues to be under increased pressure as we clear our pipeline following our recent campaigns,” he wrote. “We ask for your patience during this period and request that you manage your customers’ expectations during this difficult time.”
Mr Heavey also raised the issue of borrowers missing settlement dates if documents were signed incorrectly.
“The additional time required to reissue and re-check documents can inhibit the bank’s ability to meet a customer’s required settlement date, and in some instances result in settlement dates being missed.”
First-home buyers have until June 30 to qualify for the increased first-home owners grant, worth up to $24,000 in NSW for a new home and $14,000 for an established one.
A spokesman for the Commonwealth Bank, Steve Batten, said the bank had also taken on extra staff in its mortgage processing division. .
He said about half of all applications received by the bank for the first-home buyers grant in NSW required “a rework” because of insufficient or incorrect information provided on the forms, adding to delays. The figure was 90 per cent in Queensland.
“There is a massive volume at the moment of people trying to get into the market,” Mr Batten said. Staff were working at weekends to clear the backlog, and waiting times for approval had been reduced from 20 days to 10.
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