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Which bank just screwed pensioners – again?

Commonwealth Bank Reneges on Reverse Mortgages for Pensioners

By Phil Gorman

“Equity Unlock Loan for Seniors, The Commonwealth Bank’s Reverse Mortgage, is a flexible financing solution for homeowners aged 65 and over. It lets you use the equity in your home to supplement your income without limiting your lifestyle or selling your home. This is designed to help with personal expenses such as buying a car, home improvements, paying a medical bill or supplementing a pension payment.”

On October 22nd the bank mailed a confusingly worded notice to clients whose retirement plans depend on their Equity Unlock Loan for Seniors.

“From 1 January 2019, new EQFS loans and increases to the limit to existing EQFS loans will no longer be available. As you already have an existing EQFS loan it will remain open and you can continue to manage your loan as you do today.”

There is no way clients can continue to manage loans as we do now; the facility to meet future needs and contingencies has been summarily withdrawn. The bank has broken its promises to us.

Also, on 22nd October the bank printed a document called the Reverse Mortgage Independent Financial Information Certificate. It was not sent to clients.

This retrospective Catch 22 requires clients scrambling to top up their loans before 31st December to engage a Financial Planner to certify that they understand, “… the financial impact of a reverse mortgage.” Anyone already in the scheme went through a similar process with their solicitor plus an independent adviser, when they first took out the loan, and again on making top ups.

The big catch is in the cost. The Financial Adviser is now obliged provide a full-blown financial plan costing up to $4,000. This is an insurmountable obstacle.

The financial plans we already have in place are derailed by this act of sophistry. We will no longer be able to top up our loans as required to age in place.

The Bank has reneged on its promises to existing clients. We are left in the lurch.

No explanations, apologies, assistance or alternatives are offered.

Despite recent revelations and promises to do better the predatory leopard has not changed its spots. This is unconscionable conduct towards vulnerable people.

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7 comments

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  1. New England Cocky

    Only a fool or a brave person takes a housing loan with the Commonwealth, the bank that fore-closes on small investors while propping up the major borrowers.

  2. ChristopherJ

    Such loans should never have been offered in the first place, Phil. And now that the remaining equity is disappearing, the bank is understandably getting anxious that it will be able to recover any loaned funds.

    As for reneging on promises, you need to gather enough people together to bother them. Writing in this space about it won’t get you any traction.

  3. paul walter

    Ugly stuff, the exchange between Comyn and counsel at the RC.

    Still reeling at the utter arrogance on display from the CEO

  4. ChristopherJ

    Got a link, Paul? TY

  5. paul walter

    My bet is it would be at utube, since it was on every news service I watched last night.

  6. Josephus

    Class action? 4 Corners report? Interest Labor Party? Interest Greens MPs? Or independents?

  7. Phil Gorman

    Yes Josephus; all of the above and an appeal for everyone else dudded by the same tactics to come forward.

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