Thought the following might be of interest to a few disgruntled pensioners.
Commonwealth Bank Reneges on Reverse Mortgages for Pensioners
“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can continue to manage loans as we do now; the facility to meet future needs and contingencies has been summarily withdrawn.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.