Bank On It
'They (the Ivy League establishments) will give you an education the way banks will give you money - provided you prove to their satisfaction that you don't need it' - Peter de Vries FINALLY I've worked it out. At last I know why money-mad locals look up to, admire - worship is nearer the mark - those who rip banks off for millions.
Not only do I know. I share their admiration. After what I've been through lately with banks, I am in awe with respect for a bunch of people some might call crooks.
The wonder is not how do you borrow huge sums and not pay it back; the question is how do you borrow it in the first place? This takes real genius.
See, I've got this problem. Well, it was not a problem until last week when my bank manager pointed it out. I'm grateful.
The problem is that I am basically honest and in 16 years I have hardly ever borrowed from my bank. Credit card companies love me. They keep sending me junk on how I can get more cards, more credit than Alan Bond (and maybe win a BMW convertible) and at interest rates Macau loan sharks would consider unethical.
Last week I was diligently not getting into debt for the 17th successive year, when the phone rings. Someone's assistant at the bank called my accountant to tell her my overdraft facilities had just been made seriously null and extremely void.
Instantly I was overcome with feelings of what might be seen - in someone less placid and understanding - as desk-smashing, head-bashing, spine-snapping fury. These feelings were articulated - via a fax to my bank manager - in a range of colourful pejorative phrases. He called me.
'Mr Sherwood, we withdrew your overdraft facilities because you never use them. If you want an overdraft facility at any time, just call me.' I'm serious. He actually said that. He even put it in writing.
So I called him. 'Hi, it's me again. I'd like an overdraft please.' 'An overdraft?! When would you propose to clear it? You must understand we can't lend money just like that. We have no way of knowing how you can repay it.' He whimpered indignantly like I was about to steal his children. Maybe I should; it would make borrowing a lot less harrowing for the both of us.
I am an optimist. I must be. Only a true optimist would buy Australian property. This usually requires a mortgage. There's another down side: a mortgage means having to talk to more bankers.
Bankers are not optimists. If they were they would not be bankers; they'd be doing something useful like selling used cars. Australian bankers are beyond pessimism; most of them these days are manic depressives.
When you call an Aussie banker, you don't expect a euphoric welcome. Like a lot of Aussies in Hong Kong, our only joy is to compare our country to Bangladesh and contemplate the southern Pacific Ocean as a vast toilet with the island continent of Oz spinning (is it clockwise or anti-clockwise in the southern hemisphere?) right down it.
'You want a loan to increase your mortgage by five per cent? I don't know. First we have to get a valuation on all your properties. That will take three weeks and cost you $6,000 but first you must complete our application forms and provide a letter from your employer guaranteeing, blah, blah, and of course you will be required to leave your entire family and life savings with us for safe keeping.' 'Listen, I've dealt with your bank for a decade. You valued my properties exactly one year ago. According to your reluctant assessment I hold about 60 per cent equity.' Phone calls, days, faxes and letters later it's done. I am reluctantly given the loan.
Bankers only ever approve loans reluctantly, as if you're not paying them outrageous interest and they do not hold a lien on the assets of all your living relatives.
Valuations as vital to this exercise as testing for gravity must then be concluded in accordance with bank policy. This is so they can make a few bucks and not call it theft.
I happen to know how these valuations are carried out. It's a complex investigational study. Someone's secretary phones the local real estate agent.
'G'day Reg. Got a place at 97 Nice House Street, Dingo Flats. She's a three bedder with a bonza view. Whaddaya reckon?' 'I'd give ya about two twenty love.' 'Good on ya Reg. See ya later.' That takes three weeks, which for Australia is about right.
I can have my loan, well, sort of, I was told that with the Aussie dollar plummeting I might be asked to 'top up my mortgage' - with the same amount I am borrowing.