ST Forum : Feeling vulnerable and unappreciated after home loan episode

Jan 14, 2010

Feeling vulnerable and unappreciated after home loan episode

MY RECENT experience to refinance my home loan was exasperating. Through a broker, I explored the best offers and settled on United Overseas Bank (UOB).

The UOB officer was young and eager and offered us a letter of offer (LO) in July last year, four months before the expiry of my existing loan's lock-in period.

In mid-November, the bank said my loan would be released later that month. However, in late November, my lawyer told me the bank's lawyers were unable to release the loan based on the LO because the loan structure was incorrect.

I had to come up with $140,000 in cash to continue, failing which UOB would have to apportion the full amount into housing loan and term loan, effectively changing the terms of the LO.

I agreed to amend the LO but was shocked and disappointed that the amended LO was at a higher rate in the third year and I had to bear the cost of the amendment.

I insisted that the rates, terms and conditions should be the same as the original LO. Reluctantly, the bank agreed to change the rates. However, after pursuing this issue at the next level, it still insisted on charging me $200 for the amendments.

I was then advised that the loan would be disbursed last month, but again it did not happen.

The experience has been frustrating and infuriating, and the intra-bank finger pointing over whose fault it was has not helped.

I am stumped and cannot decide whether to proceed.

The issue boils down to the bank having poor knowledge of its product. It failed to verify internally the terms of its LO to the extent that it cannot fulfil some of these terms. Rates and terms and conditions in the LO are changeable and so create unnecessary doubt and worry in the customer.

Worse, there seems to be neither regret nor apology to the customer for an oversight.

As a customer, the episode has made me feel small, vulnerable and undervalued.

Han Chao Juan