John Kovar - Victim of La Trobe Financial

Bank Story Overview: 

La Trobe Theft and Fraud regulators won't look at

John Kovar (JK) La Trobe Financial

Case Summary

History

• JK and friend bought a house with finance from La Trobe Financial
• JK 4 years later buys the friend out with finance from La Trobe Financial.
• JK told by a broker it had to be a business loan. JK questions the broker as applications states "business loan only if funds are predominantly used for business purposes" and he already had a mortgage on the house.

Wrong loan set up

• 2007: JK told by La Trobe's solicitor, it has to be a business loan and JK has to sign a non-coded loan form

$27,000 theft

• Loan settlement $494,000 la Trobe charge $63,000 exit fees to change the mortgage security and make a further error in calculations that robs him of approx $27,000, adding to a total of $90,000
• 6 months after application and negotiations, JK accepts a reduction of $60,000, couldn't work out where $30,000 of his money had gone to. Missed summer business trading.
• JK's income reduces by over $100K and he missed a payment

Exorbitant fees

• La Trobe puts JK straight into default with a late payment fee $25,000 (5% of loan amount)
• Over the next 31 months although payments were intermittent, JK pays an average of $5,300 ($5,294.04) per month, the mortgage was $4,000 ($4,051.16) per month
• The fees charged since taking on the loan average out to $6,295.16 per month

Interest only costing full loan in 5 years

• JK would have had to pay La Trobe $10,000 per month to keep his home. That's a total of $320,365.11 for 31 months (loan was for $494,000), or he loses his home (which he did lose)
• Continuing at a monthly rate of average $5,900 at that rate at 5 years the loan would cost $491,000 about the same as the loan amount $494,000. And that's an interest-only loan with fees charges and un-fixable miscalculations (THEFT).

House sold $230K under price

• 2011: La Trobe sold JK's property that he bought for $765,000 for $530,000 (loan amount plus agents fees) leaves no equity for JK.
• La Trobe tried to make JK pay them another $54,000, which they say he still owes them.

Regulator not interested

• 2013: JK went to Financial credit Ombudsman, nothing JK said was dealt with or looked at. All JK got was "La Trobe is a professional company and can do no wrong."

Outcome

• JK ended up with nothing, living in his car on Newstart allowance, (still on it now) eventually JK bought a caravan from the tip for $150, and that is still his home.
• JK believes La Trobe owe him the equity and assets (approx total $500K) he had when he bought the house... plus interest.
• Also the social loss and income loss he has experienced because of them. The property JK lost to La Trobe is worth about 1.6 million now.