Beware of home loan salesperson tactics

This is the story of my encounter with a dodgy home loan salesperson. I am writing this to expose all the ugly tactics she employs (yes i’ve just intentionally disclosed her gender). In fact, i will expose her name later as i think she deserves to be named and shamed.

This is the 3rd home loan i have signed up for, so by now i am fairly familiar with the process. It should be as easy as deciding on the package you want, providing all the supporting documents, getting the approval and finally signing the agreement. All went well up to the point of signing the agreement. When i flipped to the second page of the agreement, i noticed the home loan package quoted isn’t what i asked for. I took up this loan through my property agent, who communicated very clearly the package i chose. How could it be that the agreement was prepared for a different package? Allow me to enumerate all the tactics, pretence and lies she employed.

Tactic #1 – Prepare the agreement for the home loan package that pays the highest commission regardless of what the customer say they want (especially if communicated through the property agent), and assume customers are idiots who know nothing about home loans.

I really wonder how many victims have fallen for this tactic of hers. When i voiced out that the agreement wasn’t what i thought it should be, she just pretended to be ignorant of the package i was talking about (pretence #1). How is it possible that a home loan salesperson not know all the home loan packages that his/her bank offers? I went on to quote the exact interest rates of the package i wanted, and she must have stared blank for a minute or so, wondering what to do to still close the deal. Finally, she went aside to make a phone call (a phony one no doubt, pun not intended, just to buy time – pretence #2). When she came back, she said if i wanted to change to the other package, i will lose a $500 legal subsidy incentive (lie #1). She went so far as to calculate and show me that even with the savings in interest i get if i take up the other loan package, i will still stand to lose $300+ because of losing this incentive (lie #2). She then attempted to divert attention (tactic #2) by asking if i knew what SIBOR is. Hmm.. lets see, i have a website advising people the difference between SIBOR and SOR, and home loans in general. Do i know what SIBOR is?? I took a glance at the agreement and saw that the criteria for getting this incentive was to simply sign the agreement within 2 days of it being offered. Obviously, if she prepared the agreement afresh for the other loan package that i wanted, i will still have 2 days to sign it. So i suggested doing a re-application. Her reply to this was that my loan will not be processed on time (lie #3).

Processed in time for what?? I have almost all the time in the world to get a loan. Basically, she is trying to get me to sign the agreement no matter what. This is the first time i have encountered a home loan salesperson who doesn’t give the customer what they want! Isn’t it the right of the customer to choose whatever they want, and upon indicating the choice, to be served accordingly, even if it means you have to redo the agreement, especially if it was your mistake in the first place?! Of course, it wasn’t a mistake in this case. It was all planned for.

She went on to try to convince me that the package is attractive, by showing me how much installment i will be paying per month. Here’s another tactic she used:

Tactic #3 – Use a financial calculator and pretend that the calculation is very complicated.

I seriously don’t know what parameters she punched in, but everything was grossly under quoted. Before this, i had already done a comparison of some loan packages which had comparable interest rates to this one, and the monthly installment worked out to be around $1.1k+. The figures she came up with were $940+ (lie #4). Such a figure is only possible if you stretch the number of years of loan to at least probably 35 years instead of 31 as stated in the agreement. I also remarked to her that there is a huge jump in interest rate between the first and second year (0.5%) and i felt this was going to make a significant difference in the interest incurred. She then showed me that i would be paying only $970+ in the second year, a mere $30+ increase per month (lie #5). I couldn’t stop raising my eyebrow throughout as everything looked suspicious. From experience, i already know that even a 0.1% increase in interest can be significant. I didn’t do my own calculations on the spot and i really should have. The formula is simple – Interest incurred per year = Interest rate (in percentage) / 100 X Amount Owed. In my case, the second year interest would increase by about $1700 (corresponding to the 0.5% increase in interest rate). Now $1700 / 12 = $141, which is a far cry from the $30+ increase she was showing.

Finding this very strange, I told her i have experienced quite a drastic jump in my current home loan monthly installment when the interest rate went from 1.2% to 1.7%. She went on to show me that i would be paying $1.3+k for the installment when in actual fact i was paying $1.8k! I’ve already made it clear that it was a loan i was servicing (for which she should be able to infer that i would know the exact monthly installment i was paying), but of course, the lie must go on.. she has to pretend she’s right (pretence #3, almost forgotten to count) even though i can easily show her my bank statement.

She also mentioned that the package she offered had the lowest first year fixed interest rate (lie #6). As i have never considered taking up a fixed rate package, i did not do any research beforehand and could only take her words for it. Eventually when i checked up later, i found out that it was a blatant lie. Another bank offered much better first and second year fixed rates (1.28% and 1.68%) compared to what her bank offers (1.45% and 1.95%). Given that these are fixed rates, i would definitely cough up almost $1.2k MORE over 2 years by taking up her inferior package. This drove me almost to the boiling point. As you can infer by now, i actually signed up the package. I fell victim to the hard-sell, even though every cell in my body was telling me the whole thing was going wrong.

Anyway, the next day, i sent her an email, presenting facts that clearly shows she told at least 2 lies, and requested for a change of the package. She finally returned a call and said she will try to appeal. Never did she apologize for the trouble i have to be put through. I mean, regardless of the package i take up, the bank will earn minimally $12k (and i’m being conservative here) in interest over the 3 years i have to stay with them to avoid having to pay back the legal fee subsidy. $12k and i get such service?? Quite appalling.

And what was the cause of this whole incident? greed, unfortunately. For 1k more in commission (ok this is a speculation, but i’m guessing it cannot be more than 1k), this lady was willing to trade away her soul. I mean, what meaning is there to life if you’re willing to constantly compromise your integrity for materialistic gain? “What good will it be for a man if he gains the whole world, yet forfeits his soul?”

I hope by now you would agree with me that this person deserves to be named and shamed, so here goes: J. Phua, Standard Chartered Bank, HDB Hub.

Stay tuned as i await the outcome of the appeal.

Update: the bank has agreed to change the package (can’t imagine it’s possible for them to decide otherwise). Gonna keep this posting up here for a while for the benefit of everyone.

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