Man Withdraws $190,000 in $20 Bills After Being Denied A Mortgage
A New Zealand bank irritated the wrong customer by declining his application for a mortgage. After hearing the reason for his rejection, Roger Griffiths decided to make life difficult for the bank and withdrew his savings — $190,000 in $20 bills.
From the Nelson Mail:
Mr Griffiths, a loyal Westpac customer for 25 years, decided to withdraw his money after the bank rejected his application for an $80,000 mortgage. "It's about time normal people took a stand."
He said the bank turned down his application because he did not have a regular income as an artist. However, he was a successful artist, exhibiting his paintings at the World of Wearable Art complex, in Christchurch and New York, he said.
He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.
That more than met the bank's criteria for a 20 per cent deposit, and the property which included a home and commercial premises would have returned $500 a week, he said.
The bank says that if he can provide evidence that he can make regular payments, they'd be happy to have him back. Hey, at least he got a free gym bag out of the deal.
$190,000 withdrawn in $20 bills [Stuff.co.nz] (Thanks, Jonathan!)
(Photo:MARTIN DE RUYTER/ The Nelson Mail)
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Comments:
I'm surprised he wasn't mugged ten minutes later.
All that and the bank still has to be snarky? F them, take your business elsewhere.
Good for him, and to hell with that bank. And, probably all banks. Shoebox under the bed FTW.
he should probably tell all his kids where he's going to hide the money. ya know, so they don't surprise him with any new mattresses or anything...
Mr. Griffiths is my hero. Every time I make this threat to my bank, they laugh at my paltry balance.
But it was in kiwi dollars.
I used to work for a bank and would love to know what kind of branch would refuse a loan for less than half of what a customer has in their savings account. Do they not have credit histories in New Zealand or something? Plus, 25 years? That kind of status is worth something, at least at the bank I used to work for.
Won't all those bills weigh a lot?
$20 bills? Psh. He let them off easy. Should have asked for $1 bills. Or coins (the kiwis have those, right?).
Hey, looks like the Professor finally got off Gilligan's Island!
You have to provide income, that's one of the reasons the U.S. is in out current mortgage crisis. If you don't have a regular income (like this guy, or you own your own business, or work 100% commission, etc.) all you have to do is provide 12 months of deposits, and the bank will average your income.
A couple of years ago people were selling their $150k house, and using the $75k profit as down payment on a $300k house. They had a lot of money in the bank, had a nice down payment, and still defaulted. It's about history.
Even though it is more fun to dump on those greedy basterds!!
Amusing, but I feel bad for the teller at the bank he deposited it in.
What is he torturing the local bank tellers for? It's not going to "teach them a lesson".
NZ has had incredible home price appreciation in the last few years, just as in places here in the US. Any prudent bank is clamping down on home loans, and it's not like it's one person who approves or denies your application, such that any measure of personal retribution is effective.
Does he really think that withdrawing his savings in $20 bills hurts the bank? Or will make them think before doing it again?
Hurrah for empty, stupid gestures.
You have to be kidding!!!! The banks in this country are screwed up because they gave money to anyone with or without a pulse or a way to pay the bills but someone who actually had the DEPOSIT and they declined him because they were concerened of his ability to pay the amount? Banks here were giving away mortages with zero down payment and someone who the cash was turned down? I don't feel sorry for the teller and he should have asked for the amount in coins? Different country, same crap.
So making things crappy for some teller somehow impacts the bank as a whole? If banks in NZ are facing the same kind of circumstances and liquidity requirements that banks in the US face what he did helps the bank more than hurts it. When a bank is in trouble, and at risk of no longer being adequately capitalized they intentionally "run off" deposits by offering low rates in hopes that people will take their money out. Shrinking the amount of deposits shrinks the dollar amount of liquidity that the bank has to maintain. Basically, if you have $100k at bank of America earning whatever the going rate for interest is, unless you have some loans or use wealth management services, you are a less valuable customer than Bucko the Turd polisher who overdraws his account every month and pays a bunch of fees for always being broke. If times are good, and the bank wants to grow, they will want your $100k back. The way things are now - most of them don't want it.
I mean capitol requirements
@kepler11: Yeh... let's all just bend over, grab out ankles and... well, you know the drill. Sometimes empty stupid gestures are all you have.
This one wasn't all that empty anyway... the bank is now out their share of the interest on a fairly sizable (for people in my neck of the woods anyway) deposit.
@kepler11: If this bank won't give someone a mortgage with a ~80% deposit, why would someone with only a 20% deposit even try to apply for a mortgage there? There's surely no way they'll be approved. And because of the new coverage generated, there is likely a few people who won't even try to get a mortgage through that bank.
All he did was annoy the teller, but the news of why he did it is what will lose customers for the bank.
To be fair, he wasn't going to have that $190,000 in the bank anymore after he spent it on the property.
@pupu: Wait...isn't that $190k capital?
Sure the bank no longer needs to have 10% (or whatever) of his deposit as capital so they need $19k less...but they just lost $190k.
What am I missing there? (Seriously, not being saracstic.)
@grebby: That was my thought. The article said he had $200,000 for a down payment, so he was just withdrawing the cash he would've spent anyway.
Sorry right now stated income loans or loans for self employed people without a 2 yr history of self employed income are a tough sell on the secondary market. I'm sure the bank which denied him wasn't going to hold onto the paper or else they would have written it. They most likely were going to turn around and sell the servicing of the loan on the secondary market which means it wouldn't be worth it to them.
@pupu: Yes, it does affect the bank as a whole. That's 190k less that the bank now has on hand to use to make money for themselves. It's a sizable figure. Besides, that's one of the things the teller is there for. Like when I worked retail, and someone came to the register with a thousand dollars worth of CDs a half hour after closing (they had just won the lottery and were splurging). Yeah, it was time consuming, and a bit inconvenient for me, but that was kinda why I was there, so I took it as just part of the job.
The problem is that once he had the $80,000 mortgage, he would have no assets left besides the property. He wouldn't have the camper, and he wouldn't have the savings, so the bank probably decided in all likelihood there was a good chance he'd default on that 80 grand seeing as he has no steady income. I wonder if he had only offered to drop half of his savings account on it, they would have given him the loan.
@Stephen Perry: He was going to use that savings are part of the purchase of the property. So the bank would have been without that money in an account, either way.
@RecordStoreToughGuy: Story like that makes me want to be wealthy. Just so i can withdraw millions from BoA (constrictor)
I think it's amazing that everyone is harping on this guy for making work for a couple of tellers. Except, that's what the tellers are there for!
What we don't see when we aren't in the branch is the tellers counting night deposits, counting ATM receipts and cash to go in, counting coins, counting for each other when there is a discrepancy, and counting the minutes until lunch.
This guy probably made the day for a few tellers who now have quite the story to tell! And, yes he certainly did make a statement. This guy is my personal hero; he voted with his dollars!
@kepler11: Unfortunate that tellers had to take the collateral damage - but the fact that we're all talking about this proves that this is not an empty gesture at all.
More people should do this .
@youbastid: What about the "commercial premises that would have returned $500 a week"? That's enough to pay the mortgage.
@knacko: What are you even talking about? He applied for an 80K loan...
He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan.
That more than met the bank's criteria for a 20 per cent deposit.
The banks criteria was 20%. Didnt you even think before writing that 80% is a bit pointless as a deposit requirement?
If someone already has 80% of what they want to borrow, wouldnt they just borrow the remaining 20% and put in a deposit from the original 80%?
I think that is what makes their case reasonable, he was paying too much deposit. There are a number of laws about what they can and can't repossess, and while I'm not sure what they are in NZ - I have been told that if you owe less thant 25% of the value of the property they bank can't forclose or repossess the property. So if he had no savings, not assets (except the property) and no income to pay the loan, the bank would be unable to collect on it's mortgage.
Having said that, it could easily be structured so that it was more flexible. Perhaps taking a loan for 80% of the property value and putting the cash in an offset account. And given that a portion of the property could be rented for $500 p/w I think he was in a decent position to borrow. The bank really stuffed up on this one.
@grebby: "He wanted to buy a $385,000 property in Mapua, had $200,000 in cash and was going to sell his $110,000 campervan."
So he only need the loan to complete the deal without using the money in the bank.
@MostlyHarmless: You are missing knacko's point. The bank required 20%, but he was putting down approximately 80%. If the bank turned down a mortgage for the 20% left then what chance does a normal person have putting down only the 20% and wanting a loan for the 80%?
The bank wasn't REQUIRING 80% and knacko wasn't saying they were, just pointing out how others won't want to apply for a mortgage at this bank, believing it pointless.
What a baby As if asking for twenties instead of a check is hurting anyone other than the teller. Arrogant fool
@JeffMc: Wait...isn't that $190k capital
Not for the bank. For the bank Assets are cash, investments, and loans that people owe the bank. Deposits (the guys $190k) are liabilities just like money the bank owes suppliers and employees (because the bank has to pay them out if requested) The banks net worth is the assets minus the liabilities. Basically if every depositor took out all their money this is what would be left over. To determine if a bank is well capitalized you divide the net worth of the bank by the total assets. The result has to be 7% or higher, if the result is less than 6% the government will say that the bank has failed and take it over. SO - if a bank has assets of 1 million and liabilities (deposits etc) of $900k the net worth is $100k. and the capital ratio is $100k/$1m or 10%. If an depositor pulls out $100k the banks assets go down to $900k (because cash is paid out) and the banks liabilities go down to $800k (because the bank paid that guy his $100k - so the bank no longer owes him $100k) Then if you calculate the new capitol you take the $100k net worth / $900k (new asses amount) and the capitol ratio has increased from 10% before the withdrawal to 11.11% after the withdrawal. If a bank has taken a buttload of losses (like mortgage loans that are not paid) that comes out of the net worth - so WHEN a bank is in danger because it has suffered losses and it is getting close to that 7% mark the bank is better off NOT having the deposit! If times are good and people are paying their bills and the bank wants to grow then they need and want deposits. But the way things are these days - if the situation in NZ is anything like in the US the guy actually did the bank a favor by taking his money out!
@Coles_Law: Well it appears the 5 cent coin is not in production anymore ( [www.rbnz.govt.nz] ), so the worst you could do is get it in all 10 cent coins, 1,900,000 10 cent coins at 3.3g would come to 6270 kilograms (over a ton), but $1 bills will be much closer to 1g each (thats the number i get for US bills, i expect New Zealand to be close), which would work out to ~190kg (~480lbs), you won't hit a ton without going into coins.
I'm sure they'd be happy to have him back. bastards.