'Bad and clunky' construction lending on the way out

by Adam Smith23 Mar 2012

NAB has touted improvements to its Homeside construction lending, which it conceded had been "bad and clunky".

NAB Broker national manager of sales performance Adrian Cunningham has told a gathering of brokers in Sydney that the bank identified construction lending as an area of improvement for Homeside.

"To be honest, construction lending at Homeside, if you've dealt with us in the past, has been really bad and really clunky. The communicaation around the process, particularly during the draw-down phase, has been quite poor. We've identified that as a real weakness we had in our suite of policies and invested time and energy in it," he said.

Cunningham said the bank had responded by appointing a dedicated team of construction case managers to handle files from unconditional to final draw-down.

"These case managers are trained on the nuances and intricacies of building construction. They're not shy talking to builders," he said.

He commented that Homeside had also made changes in the way it interacted with construction clients.

"When you have the final progress payment, we actually give the client the option to receive that cheque from a NAB branch in person. It's about keeping the client in control of the transaction and making sure they're fully comfortable with what they're doing," Cunningham said.

A major change to the Homeside construction policy has been around product, Cunningham said. He stated that this was a change about which many brokers may be unaware.

"You can now take our Homeplus product on construction loans. Previously, you had to take our Performance Line of Credit, which was priced slightly higher. The Homeplus product means your client gets access to our best rates, and it also means they get access to cheaper fees and the credit card package that comes with the Homeplus product," Cunningham said.

These improvement, Cunningham claimed, had already yielded tangible results. He said the appointment of dedicated case managers who understood the construction process made the process more efficient.

"One of the key things we've seen is turnaround times. It previously used to take somewhere around five days or longer to process progress payment requests, and now we're getting that done in 24-48 hours. It's largely because we're cutting out a lot of the driftwod and the to-ing and fro-ing in communication," he said.

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  • by Moss Stehbens 23/03/2012 10:22:14 AM

    NAB/Homeside whilst particular are well ahead of their competitors in the manner in which construction loans are handled and managed.
    Well Done.

  • by Scott 23/03/2012 10:42:20 AM

    Well about time they admit they have problems and do something about it. Although one of their case officers have called myself & my pa demanding to know what our client was doing. Only for us to tell them it was not my client! They were adamant that it was my client. Never again!!

  • by satish 3/04/2012 2:49:31 PM

    NAB construction loan is very lengthy and process is not transparent. nobody knows whats happening.
    No followups. In nutshell if you want a qucik loan dont go for NAB. I am waiting for last 6 weeks.