Bank not responsible for last-minute change to loan structure

Categories:

Service problems, Delays, Lending,

Summary:

Anita and her husband Anthony had a home loan with the bank through a trust. In August 2024, they bought another property and asked the bank to restructure their lending. Anita asked the bank to move the original loan from the trust to a business, and to set up a new loan for the second property in their personal names. However, she said the bank was too late in sending the loan documents to their lawyer to make the changes, forcing them to continue with the trust as the borrower.

Published:

September 2025

Our investigation

We found Anita gave the bank instructions on 30 July 2024, which the bank followed. The bank quickly set up and verified the business account. It set up the loan documents, as requested on 7 August. However, Anita’s lawyer did not have enough time to move the loan out of the trust, so Anita asked the bank to change the loan documents back to the trust. In our view, the bank provided the loan documents to Anita as instructed. She did not make the bank aware in advance that her lawyer needed time to make the changes.

Anita said the bank was supposed to contact her after settlement to restructure the loans. The bank said it was not aware until a month later that she wanted to change the structure of the loans after settlement. In our view, it was up to Anita to notify the bank about any changes she and Anthony wanted made to the loan structure after the loan was advanced, although the bank acknowledged it was best practice for a lender to contact the customer after settlement to offer any help. We considered the bank’s offer of $1,000 more than compensated for this inconvenience, especially since the bank offered to restructure the loan. We suggested the bank increase its offer to $1,500 to help cover the legal cost of preparing the loan documents.