Bank not obliged to help customer in arrears

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Bank not obliged to help customer in arrears

Categories:

Lending restrictions,

Summary:

In early 2022, Bailey complained that the bank was acting unreasonably and unfairly by demanding she refinance her home loan or sell her home, making no allowance for her difficult circumstances. The bank agreed to give her more time to refinance or sell, but otherwise stuck by its position. Bailey was unhappy with this and asked us to investigate.

Published:

March 2023

Our investigation

We learned the bank had given her help with her loan on a number of occasions in the previous years, but was unable to assist further because she lacked sufficient equity in her property. She was well behind on her loan, when the bank issued a PLA notice under the Property Law Act 2007 which demanded that she pay $40,000 of missed payments in full by a due date to remedy the notice. The PLA noted that if she did not do so the bank would have the right to take steps to sell her property. Bailey had asked the bank to re-fix her interest rate which she believed would enable her to get back on track with her loan, but the bank had no obligation to do this given that she made the request after the PLA notice had expired unremedied.