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LMI issue

Posted by WarwickS WarwickS
Message 1 of 3 754 Views
I have had a mortgage with bankwest for 2.5 years.

2.5 years I paid for service 30 years in advance called 'lenders mortgage insurance'.
This was paid due to not having plenty of savings (more than 20%).

Circumstances have now changed where I have a baby on the way so I need a bigger place.
I'm sure this is a common scenario

I obviously need another mortgage and have now discovered that the service I paid for 30 years in advance is now going be void where you'll be double dipping for a service from people who have not much money in the first place where you deny them of any rebate whatsoever.

Your ethics in double dipping from people for a service purely for people who don't have a lot of money and keeping their funds being non transferable or rebate is pure disgusting.

I spoke to one of your representatives on Saturday who informed me "other banks do it".
Which is your justification apparently.
Because someone else steals money doesn't make it acceptable.

It was also said that I could have been entitled to a 20% refund under a year.
If this is another attempt to look great, please....

You turning your heads on ethical procedures and taking money for a service 30 years upfront and not full filling that for the duration of time on the poor is absolute disgusting.

There's more I could go on about but you get the drift.

I'll be soon writing an email to the local parliament, today tonight and a current affair, newspapers of this often overseen as "just the way it is" procedure you repetitively feed of the poor from gets addressed.

Maybe think of what happens if you pay car insurance or registration a year or so in advance.
Do you think it's ok not to receive that money back?
If so I'll let all insurance companies and register of vehicles know that all bankwest employees are happy to forfeit their remaining monies paid.
This also is the same of who pays council rates and when they sell their house.

I'll let each council in Australia know that bankwest employees are happy to forfeit the remaining monies paid upfront in rates aswell.

It's quite the same but worse as the reason who have been paid this fee is from people who don't have a lot of money to begin with.
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Re: LMI issue

Posted by SarahF SarahF
Message 2 of 3 735 Views

I understand your frustration with this @WarwickS however here are some details on Lenders Mortgage Insurance (LMI) which will help clarify a few points - when, why and how this is charged.

 

Importantly, this insurance isn't the same as typical car insurance which is based on an annual premium which covers you for 1 year of insurance. In the case of LMI, the length of the loan is irrelevant to this premium, and lasts for the 30 years of the mortgage or only a portion of that if the loan is paid out sooner. LMI is payable by customers who need to borrow more than (typically) 80% of the value of the property and is in place to protect Bankwest due to the increased lending risk. So LMI enables our customers to borrow more than 80% - whether the loan lasts 2.5 years or 30 years.

 

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Re: LMI issue

Posted by WarwickS WarwickS
Message 3 of 3 733 Views
You have bypassed the main issue here and said it's not the same where it is quite similar.

As you said, it protects for the duration of the loan (30 years).
This "protection" will soon be ceased in quite a early period into the loan.
Which is a common scenario. Where bankwest think it's acceptable to pay for this coverage in a large period of time.
30 years in fact.

The duration of the loan has ceased where it's ethical for this money paid to be transferable or refunded.

I understand insurance and saying it's totally different is quite bizarre.

It's clear by your response that you don't wish to accept the rort in this procedure and continue to bite the hand that feeds.

I think this going public will put a stop to your unethical, greedy and double dipping procedures.

I would understand the total fee being forfeited if a loan defaulted etc.

There's no point in trying elaborate and explain this.
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