Have your say: Property investors fear 'top up' requests from banks
4th May 09, 10:17am
The Sunday Star Times carried an interesting report about how ASB had written to some property investors asking for 'statements of position', which some believe is a precursor to asking for equity 'top ups' (ie loan repayment) to get loan to value ratios back down after price slumps.
Residential property investors have become worried banks could start asking them to top up their loans, and there are signs it may be beginning. One mortgage-broking source, who did not want to be named, told the Sunday Star-Times that ASB Bank had written to some investors asking for "statements of position" including up-to-date valuations. The fear is that was a precursor to asking investors whose equity in their properties had fallen to reduce their borrowings, but ASB Bank said asking for such statements was nothing new. In a statement, the bank said: "ASB has made no changes to its policy relating to `Residential Property Investors'. We have always reserved the right to request updated information which may take the form of an updated statement of position or in certain instances a registered valuation for securities."Your view? Are you seeing any signs of this with other banks? Should residential investors be topping up anyway? Are there that many rental investors who are that highly leveraged?