Questions from the Port Hills Red Zone Workshops

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Questions from the Port Hills Red Zone Workshops

BANKING

Value of the property

If the red zone property is mitigated against rock fall risk to an acceptable life risk level, how will the banks treat the value of the property?

ASB Provided full insurance can be obtained with no exclusions, we would ask

for a registered valuation to confirm value and risk, together with an

engineer’s report to confirm the rock fall risk has been mitigated, and a geo tech report.

Westpac If the Crown decides that the mitigants enable the property’s zoning to be

changed from red to green, we will value the property the same way as we would a property anywhere elsewhere in the country, for example, the same as a house on a hill in Auckland. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ The offer documents indicate mitigation is unlikely to result in removing the

Port Hills Red Zone hazard notification. Therefore, BNZ would rely on the services of an appropriately qualified valuer to advise the value of the property, factoring in the evidence of mitigation.

Financial cover

Would all banks look at individual properties that fall below the life risk according to individual analysis?

ASB Provided full insurance can be obtained with no exclusions, we would ask

for a registered valuation to confirm value and risk, together with an

engineer’s report to confirm the rock fall risk has been mitigated, and a geo tech report.

Westpac If the Crown decides that a property is within the green zone, we would

treat it in exactly the same way as we would a property anywhere

elsewhere in the country. The bank does not assess individual analysis of red zone-related risk. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

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Will the banks provide new mortgage cover for red zone notified hazard land?

ASB Provided full insurance can be obtained with no exclusions, we would ask

for a registered valuation to confirm value and risk, together with an

engineer’s report to confirm the rock fall risk has been mitigated, and a geo tech report.

Westpac If the Crown decides that a property is within the green zone, we would

treat it in exactly the same way as we would a property anywhere

elsewhere in the country. The bank does not assess individual analysis of red zone-related risk. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ BNZ considers all mortgage lending on a case-by-case basis. If the

mortgage was used as bridging finance pending acceptance and completion of the Crown’s Port Hills Red Zone offer then we would consider new borrowing in this case. Other factors BNZ may consider include the availability of insurance, a registered valuation and an engineer’s report.

Will the banks provide current mortgage cover for red zone notified hazard land?

ASB By mortgage cover we presume we are referring to the fact a bank holds a

mortgage security over the property at present. If we have the mortgage over the security now, then we would continue with the mortgage.

Westpac Yes, given the mortgage is already secured against the property, we would

continue to support customers who are in this position. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ BNZ does not anticipate removing current mortgages in place in the Port

Hills Red Zone.

Will banks recall mortgage on red zone properties if the owner stays?

ASB No - as long as the current mortgagee continues to make payments in line

with the agreed loan contract.

Westpac No, not due to it being Red Zoned, we continue to support customers in this

position. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ It is unlikely that BNZ would recall a mortgage in place simply because of

the Port Hills Red Zone, provided the borrowing continues to be repaid as contracted. Any additional or increased borrowing against that mortgage will be reviewed on a case-by-case basis.

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If you have guaranteed insurance cover, will the banks lend against the property?

ASB We will consider each application on its merits. The insurance policy would

need to have no exclusions, and the property would have to have an appropriate geo tech report and engineering report.

Westpac Yes, although insurance is just one factor we consider, along with normal

lending criteria. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ Yes, BNZ would be happy to consider using security in the Port Hills red

zone property that is insurable. We may also require an engineer’s report or registered valuation.

Do banks have guidelines/policies on these issues already or are they relying on meetings such as this to provide then with material?

ASB We are currently reviewing our policy on the properties in the Port hills Red

Zone. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

Westpac We’ve done a lot of work to understand our changing environment and to

support our customers through the rebuild. We seek information from many sources, including meetings such as these, and continue to review our guidelines and policies as well as continually up skilling our teams. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ Yes BNZ has policies on these issues already. BNZ has been lending in

New Zealand for 153 years. We have robust guidelines and policies that enable us to confidently lend in our challenging environment. The concerns raised at public meetings in Christchurch mirror those we discuss and resolve with our local customers every day.

Are banks still providing reduced interest rate mortgages for properties affected by the red zone?

ASB We will work with customers to understand their needs and current

situation and tailor a package accordingly.

Westpac Westpac has developed a number of packages to respond to the differing

groups of Canterbury Customers. A number of these packages have the ability to include interest rate discounts. Talk to us about your situation. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ Yes, BNZ is providing reduced interest rate mortgages for red-zoned

properties. However, the Port Hills Red Zone hazard notification is different to the flat land. BNZ would be willing to assist Port Hills Red Zone property owners by waiving charges and reducing interest rates as appropriate.

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How would a bank support a red zone owner who is going to cash settle, to progress and ensure they meet the rising building costs?

ASB We would assist them as much as possible, similar to the process we used

for Flat land Red Zone customers in 2011 (bridging finance). Again each situation can be different and we will work with customers to understand their needs and tailor a package accordingly. Please contact our

Earthquake Support Specialist Tim Challies - 03 3716 392.

Westpac We would work with the customer to:

• Gain a fast pre-approval so they know what they can afford (pre-approval is for 12 months)

• Have one of our construction specialists work with them and the building company they choose to lock in pricing of the build

• Structure the loan to suit their situation

• Provide the opportunity to fix portions of the loan during the build Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ One of the best ways to support Port Hills Red Zone homeowners to

progress and meet rising building costs is to enable them to move as quickly as possible. That is why BNZ would be happy to discuss your personal circumstances and look for ways to help you make an informed decision.

How would banks support Port Hills red zone homeowners with mortgage options affected by rising interest rates, due to delays with Port Hills zoning review?

ASB As above. We would treat them on a case by case basis.

Westpac We have a full range of fixed, floating and capped interest options, a

number of customers have already taken advantage of these. For those who haven’t, we will work through a solution to suit their situation. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ There are several ways BNZ would assist Port Hills Red Zone homeowners

including waiving fees, discounting interest rates, giving access to advice to make a fully informed decision, providing access to funds immediately the decision is made to accept the Crown offer and also providing increased borrowing if requested.

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Will the bank support red zone Port Hills with bridging finance to help them move on before CERA settlement date?

ASB Yes, the same as we assisted customers in the Flat land Red Zone areas

in 2011.

Westpac Yes, we will look to provide further funding (subject to normal lending

criteria) pending the payment from the crown. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ Yes BNZ will.

If a red zone Port Hills homeowner has commenced a build with a future end date can you lock in a mortgage rate during the process?

ASB This is treated as a construction loan and the loan is at the variable rate

until it is fully drawn down. It can then be locked in at that point.

Westpac We can fix in portions of the loan during the build. Talk to us about your

situation. Please contact our Earthquake Support Specialist Tim Challies - 03 3716 392.

BNZ Yes. There are ways to lock in a mortgage rate with BNZ. While there are

conditions, we can provide this facility for an extended time. All lending is subject to BNZ’s normal lending criteria and terms and conditions and fees.

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