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Leon, Solicitor
Category: Australia Law
Satisfied Customers: 42323
Experience:  BEc Dip Ed, Dip Law (SAB) MTax (UNSW)
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Good morning My Name isXXXXX am a company Director

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Good morning My Name isXXXXX am a company Director of Chyco Holdings Pty Ltd
& L&T Trust A.B.N 77 649 241 728 I have Mortgage Loan with Citibank for 1,144.000. fix interest rates at 6,09%.
Citibank have sold their commercial portfolio to Pepper Home Loans and I don't want to deal with Pepper I have and a proved loan to pay out my mortgage and Citibank is no longer the owner of my commercial loan at the stage they are the care taker on behalf of Pepper and they want to charge me braking costs $28,935.61 calculating and using the present Swap rates of Citibank at 3.8%.
My Legal question can Pepper the present owner of the commercial portfolio and my mortgage loan charge me braking cost using Citibank's the Swap Interest rates!!!!?
Good Morning

Thank you for your question. To Introduce myself I am a sydney based Solicitor and will do my best to provide you with relevant information to assist you.

Are you saying you wish to refinance to citibank again?

They wish you to pay break cost fees to undertake the refinance?

Customer: replied 3 years ago.
Citibank. They sold the commercial portfolio and they don't have any more commercial lending the refinance money is from ANZ Bank they have approved the loan repayment to Pepper.
Pepper Home Loans is the owner of the portfolio and Citibank is the caretaker at the moment collecting the money on their behalf please call me if you can't follow my explanation. "Pepper is using Citibank's swap interest rates to charge the braking costs of the loan" That's the my legal question and my concern that can they penalise customers that they don't want to deal with Pepper. my mob:61412024535
Good Afternoon,

I now understand.

Unfortunately when the loan was transferred to Pepper home loans, terms and conditions were exactly the same as what they were when they were with Citibank.

You are still covered by the same terms and conditions and if you wish to refinance the loan you still need to pay the break cost fees that originally applied when Citibank owned a mortgage.

It is exactly the same as if you had refinanced from Citibank to ANZ.

Unfortunately in the mortgage documents you signed, Citibank had the right to assign its mortgage to any 3rd party, and the terms and conditions of the line continued with a 3rd party.

Pepper home loans have the right to charge the break cost fees but they must charge them in the same way that Citibank would have if you are refinancing from them.

Unfortunately the fees must be paid as they are part of the loan agreement.

The reason why you are leaving is not relevant. Pepper home loans are enforcing the contract as it was when you executed with Citibank as they are now the owners of the line and the contract terms and conditions.

Do you believe that if you are refinancing from Citibank at the break costs would be less?
Customer: replied 3 years ago.

No Citibank they charge me the brake costs on behalf of Pepper the question is about the interest rates my present interest rates is 6.09% and this rates is Citibank's rates when I sign the contract with Citibank. Now that my mortgage loan is with Pepper can Pepper use Citibank's Interest rates at 3.8% to charge for the brake costs.
The average present Commercial interest loan is 6.4%.
And Pepper they want to Charge me the difference of 6.09%-3.8% = 2.9% that's what I want to legally now can Pepper use Citibank's Interest witch are way below the present commercial interest rates? Wood Pepper lend money at that Rate "3.8%" 3.8%!!!!
Good Afternoon,

The break interest costs are charged at the current rate of your loan and if you look at the loan agreement there is a formula on how they calculated.

Is that formula that they must use when calculating the break interest costs.

In the disclosure statement of the loan it talks about the break interest costs and they have a formula explaining the figures that the users and the timeframes.

Do you still have a copy of that agreement?
Customer: replied 3 years ago.
Yes I have the Contract, on the contract there is a close that Citibank can sell their portfolio but it doesn't allow or there is a proviso that however bays the commercial portfolio has the right to use Citibank's Interest rates.
Good Afternoon,

I do not understand the last sentence after the word proviso.

Are you saying that whoever takes over the commercial portfolio has the right to use Citibank's interest rates?

If that is the case then they will use the same formula that Citibank would use if they still own the line.

Now in the actual schedule of the loan they should be a formula that will be used in calculating the break interest fees.

This is the formula that must be used by the current owners of the loan.

Can you see that formula in the documents?
Customer: replied 3 years ago.
No I am saying the Contract that I have sign there isn't any legal wording witch gives "Proviso" the right that the purchaser of the Portfolio has the right to use Citibank's Interest Swap if in the contract it's not disclosed that the purchaser has the rights to use the seller's "Citibank's" Interest rates, Pepper mast use their on existing commercial rates.
Good Afternoon,

With the contract for the loan you should have also received a memorandum of mortgage which is registered with the land titles office in NSW.

Under the memorandum there is a section called assignment. It is under that section that says that Citibank and assign its rights and interests to a 3rd party.

This is what you need to rely on.

are you able to send me the section you're referring to it may make it easier to have it infront of me
Customer: replied 3 years ago.
I do not have a copy of the registered contract with the land titles office. What should I do should I go to the NSW Land Title office and ask for a copy. NSW
Good Afternoon

It should have been provided to you when you got the loan documents.

What I would suggest you do, is contact the party that has provided you with the break interest fee and ask them to provide you with confirmation of their entitlement to charge that amount.

We advise that you do not agree with the calculation and that if they cannot provide confirmation by referring to the agreement contract the signed, they will be taking the matter to the financial services ombudsman and reporting them.

I think this will be the quickest way to get this matter resolved and you make them do some work and provide you with information.

If you still have details of the people you are dealing with at Citibank, should be able to contact them and request a copy of the memorandum that is attached to the loan and they should be able to provide you with that as well.

Generally under the memorandum they can assign all the rights and interests in the loan to a 3rd party, and it is as though you borrow the money from that 3rd party initially.

I'm happy to provide you with further assistance if there are further questions but at the moment is nothing further I can assist you with.

I hope this is of assistance. If I have missed anything, or you have any further questions please let me know before leaving any feedback.

If I have assisted please do not forget to leave me with positive feedback.

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