National Australia Bank breached its responsible lending obligations when it provided an investment loan to two sisters in 2018, AFCA has ruled.
The bank failed “to properly verify both [one applicant’s] income declarations and the declared rental income for the property.
“Further, I am not satisfied the complainants’ expenses or the value of the property (as it impacted the Loan-to-Value Ratio (LVR)) were properly considered” the AFCA ombudsman ruled.
“The lender did not meet its obligations as required by law, industry codes and good industry practice to lend responsibly. However, the complainants gained some benefit from refinancing an existing loan at a better rate.”
AFCA directed NAB to restructure the loan and gave the complainants six months to repay the loan.