A big deal: Ollie Lum

by Ollie Lum24 Aug 2021

Ollie Lum is residential loan manager at AAA Financial Group. Trained by commercial broker John Macalyk, Lum approaches residential loan scenarios as if they were a commercial loan transaction. He recently helped a client obtain an interest-only loan involving 22 securities.

The scenario

A Google enquiry I received turned into a home visit within two hours of receipt to go through the client’s scenario. After an initial conversation it became apparent that the client could use a total review and restructure of his portfolio, not just an improvement in rate on two of the securities, which he had reached out for. The client had 29 securities, all with ANZ. Two of the securities were combined with those of his adult son.

The client had tried Commonwealth Bank previously to move the $11.5m bullet loan and obtain a small equity release. However, he had not found any traction or the correct fi t for him on a banker level.

The bulk of the client’s income was from SMSF and rental payments only and was not enough to service the debt on the face of things.

The solution

Quickly it was realised that we needed to involve a private banker. Enter Nancy Ma from Westpac Private – hi Nancy. She was able to understand the complexities of the bullet loan and servicing piece to separate the loans to stand alone per security. This meant that the clients could sell down the portfolio if required and also assist in the estate planning for their adult children’s future inheritance.

We worked out a split to include one $7m bullet loan secured by 12 securities, with the remaining 10 securities on residential term loans to 60% of the individual security value. All loans were interest-only terms for five to 10 years.

The cash-out component was slightly reduced, and the security list was examined thoroughly to plan for what to put in and leave out of the bullet loan. The adult children’s input increased at this point to ensure that the sell-down strategy worked for all parties.

The takeaways

This was a complex loan deal, and the initial credit manager was not supportive. We had to do some internal dancing within the bank process to have the fi le reassigned and to gain support from an alternative credit manager.

We also obtained support from the NSW head of department at Westpac Private Bank. This of course took time and some ‘passing of the baton’ backward and forward. Plenty of momentum and energy between the broker, banker and the client was essential to get this complex deal over the line.

The difficulties that the 22 securities and servicing shortfall created on both a logistical and processing front meant that many visits to the client’s home, accompanied by the banker and broker, were also essential. The entire team at Westpac Private was also needed, and we think it was a record in relation to the amount of securities done in one transaction.

In the end, it was people and relationships first that ensured we managed to get the deal over the line – it took six months from start to finish.

We are now all heading out to dinner when lockdown is done to have the celebration bubbles. Thank you, Nancy, and your team at Westpac Private NSW.