Major bank announces lending restrictions for foreign buyers

by AB29 Jul 2015
Westpac has announced changes to its lending practices governing foreign buyers, in response to APRA’s push to rein in the levels of finance being supplied to investors.

The major bank is attempting to curtail lending to foreign investors by writing to mortgage brokers to tell them that all applicants must have an Australian visa and confirm to Foreign Investment Review Board (FIRB) requirements.

The bank issued the advice in a letter to brokers last week that was leaked to the Australian Financial Review.

“All future home lending applications that you submit to Westpac must contain a primary application that has an Australian residential address,” the letter read.

According to the AFR, the letter was sent to brokers identified as having a high proportion of clients who do not reside in Australia.

In a statement to the AFR, a Westpac spokesperson said the bank was reminding brokers to operate within the FIRB rules.

“It's just a reminder to brokers with a higher percentage of non-resident lending that when submitting owner-occupied applications [they] should contain an Australian residential address.”
 

COMMENTS

  • by Chris C 29/07/2015 9:28:57 AM

    A 'reminder' for brokers to operate within the rules ??? Westpac is obviously accepting and approving these loan applications and FIRB rules are quite explicit - Westpac may need to remind themselves to operate within the rules rather than shifting the blame onto 3rd parties. Although the Broker should of course recognise and act accordingly with any FIRB positions, the Bank has the ultimate responsibility to approve or decline loans - not the Broker.

  • by Don 29/07/2015 10:48:56 AM

    @Chis when I can't get a client through the keeper, I send them direct to a Westpac or NAB branch to get it approved within a day. The banks play their own "rules" within the branch.

  • by Jenese Malone 29/07/2015 12:31:08 PM

    Very short sighted as the investment buying frenzy is restricted to mainly the chinese and in Sydney. Why punish other areas and countries?