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Thread: Citibank is unilaterally rasing the spread on its existing Sibor loan customers !

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    Default Citibank is unilaterally rasing the spread on its existing Sibor loan customers !

    Guys just heard from a close friend: Citibank is unilaterally raising the spread for its existing Sibor "throughout" rate customers ! His Sibor package was taken in 2011, the Citi's deal then was spread over Sibor fixed for the entire tenor. He just received a letter from Citi telling him the "throughout" spread will be raised after 31 March.

    Can you believe it ? A bank rescinding its commercial terms ? Can it even do that ?

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    Quote Originally Posted by amk View Post
    Guys just heard from a close friend: Citibank is unilaterally raising the spread for its existing Sibor "throughout" rate customers ! His Sibor package was taken in 2011, the Citi's deal then was spread over Sibor fixed for the entire tenor. He just received a letter from Citi telling him the "throughout" spread will be raised after 31 March.

    Can you believe it ? A bank rescinding its commercial terms ? Can it even do that ?
    Please double confirm. Usually the first 3 year spread is smaller compare to 4 year onward.

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    I believe threadstarter misinterpret.
    first 3 years probably 0.75 + sibor
    4th year maybe 1.25 + sibor
    Thereafter 1.25 + sibor

    Read the terms and conditions again!

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    His friend must have offered a raw deal then if this is true. Sibor spread at that time will likely to have same spread througout the tenure and not an increase of spread after the 3rd year/subsequent increment in later years.
    Quote Originally Posted by MortgageGuru View Post
    I believe threadstarter misinterpret.
    first 3 years probably 0.75 + sibor
    4th year maybe 1.25 + sibor
    Thereafter 1.25 + sibor

    Read the terms and conditions again!

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    I got mind in 2012. 1 mth sibor + 0.75 throughout. Didn't receive any letter about the change.

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    Quote Originally Posted by BigBoy View Post
    I got mind in 2012. 1 mth sibor + 0.75 throughout. Didn't receive any letter about the change.
    You have better deal than mine. I get 1 month sibor + 0.75% for the first 3 year. After that I will get 1 month sibor + 1.0% for the rest. I get it from SCB.

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    Quote Originally Posted by MortgageGuru View Post
    I believe threadstarter misinterpret.
    first 3 years probably 0.75 + sibor
    4th year maybe 1.25 + sibor
    Thereafter 1.25 + sibor

    Read the terms and conditions again!
    No I did not misinterpret. If you do not believe you can check your Citi contact directly. I have checked with another mortgage broker, he has confirmed this with his Citi contacts.

    My friend's deal was Sibor + 0.65% throughout. Citi sent him a letter saying now it will be updated to Sibor + 0.85%.

    Citi told him all customers with 0.65% throughout are being "revised".

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    If this is true, then CITI has back out of its commercial agreement unilaterally!
    We should NOT allow such thing to happen in Singapore!

    Could some reporters write something about this in the newspapers to raise awareness of such disgusting unfair business practise and ensure that no other bank will follow suit quietly on the sly?

    Also, what are the recourse for CITI housing loan clients in such case?


    Quote Originally Posted by amk View Post
    No I did not misinterpret. If you do not believe you can check your Citi contact directly. I have checked with another mortgage broker, he has confirmed this with his Citi contacts.

    My friend's deal was Sibor + 0.65% throughout. Citi sent him a letter saying now it will be updated to Sibor + 0.85%.

    Citi told him all customers with 0.65% throughout are being "revised".

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    https://www.citibank.com.sg/global_d...pa/hms_tnc.pdf
    Citibank's terms and conditions
    Clause:
    6.14 We may from time to time review, alter and/or cancel the Credit Facilities and/or the Adjustment
    after giving reasonable notice to you.

    My intepretation: It is catchall for the bank to do anything.

    I believe other banks should also have the same catchall clause to protect their backsides. (i didnt check the other banks though).

    Remember GS recalling loan facility in penny stock sage? GS only gave 90 minutes. to GS, 90 minutes is a reasonable notice

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    DBS
    http://www.dbs.com.sg/iwov-resources...rtgageloan.pdf

    13 Right of Review
    13.1 We shall, at our absolute discretion, be entitled to review the Facility at any time and from time to time and to decide whether:
    13.1.1 the Facility shall be cancelled, reduced or repaid; or
    13.1.2 any terms relating to the Facility shall be varied in any way,
    and such cancellation, reduction, repayment or variation shall be effective at the time that we issue a notice to you.

    So in what way, is the statement "A bank rescinding its commercial terms ? Can it even do that ?" true?

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    Quote Originally Posted by hopeful View Post
    https://www.citibank.com.sg/global_d...pa/hms_tnc.pdf
    Citibank's terms and conditions
    Clause:
    6.14 We may from time to time review, alter and/or cancel the Credit Facilities and/or the Adjustment
    after giving reasonable notice to you.

    My intepretation: It is catchall for the bank to do anything.

    I believe other banks should also have the same catchall clause to protect their backsides. (i didnt check the other banks though).

    Remember GS recalling loan facility in penny stock sage? GS only gave 90 minutes. to GS, 90 minutes is a reasonable notice
    I like your language. Of course, GS, what do you expect.

    Back to loans, yes, all banks' loan T&C will have catchall terms to protect them. The contract is bullet proof.

    For example Citi's T&C in your link, no need to look far, read the very 1st line, it says:

    1 Interest
    1.1 We may vary the interest rate(s) from time to time at our discretion after giving reasonable notice to you.

    First line already cover Citi totally for any interest rate revisions. what sibor, what spread, what fixed rate.

    I feel bad for my friend. I was the one who recommended that package to him. As far as I know, all these years, no other bank has ever invoked that term to change a promised spread/rate just like that. Well done Citibank !

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    Quote Originally Posted by amk View Post
    ..As far as I know, all these years, no other bank has ever invoked that term to change a promised spread/rate just like that. Well done Citibank !
    luckily for non-citibank mortgagees, banks are not like petrol stations...........yet

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    Maybe can report to case like what they did to the petrol stations.
    Even if cannot do anything the publicity generated will be enough.

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    To protect us just spread the word as much as possible. As long as we are spreading the true. Sure after that people will think first before choosing Citibank.

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    Relax relax..interest rate gonna to fall..

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    Quote Originally Posted by 2824 View Post
    Maybe can report to case like what they did to the petrol stations.
    Even if cannot do anything the publicity generated will be enough.
    Yes I told him the same, plus also asked him to complain to MAS and contact straits times too. I strongly feel this thing needs to go public to get MAS's serious attention. At the very least, every one needs to be educated that ALL mortgage rate promised can be "revised" at will, and there are banks that actually are doing that. Citi should be punished with a public outcry. I wonder why Citi made such a decision. How much profit can it make from this ? Miserably small for a bank. And Citi is totally not afraid of the public outcry, that people will not trust its mortgage offering any more ? Or Citi is thinking ppl are ignorant and will forget what it did ?

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    Does Singapore's LEMON LAW and ANTI-COMPETITION LAW apply to all these massive terms and conditions unilaterally set by banks that are all the same?
    They should, because it is an obvious case of manipulation and amounting to cheap their clients?


    Quote Originally Posted by hopeful View Post
    DBS
    http://www.dbs.com.sg/iwov-resources...rtgageloan.pdf

    13 Right of Review
    13.1 We shall, at our absolute discretion, be entitled to review the Facility at any time and from time to time and to decide whether:
    13.1.1 the Facility shall be cancelled, reduced or repaid; or
    13.1.2 any terms relating to the Facility shall be varied in any way,
    and such cancellation, reduction, repayment or variation shall be effective at the time that we issue a notice to you.

    So in what way, is the statement "A bank rescinding its commercial terms ? Can it even do that ?" true?

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    I believe what CITI did is challengeable, given that in black and white in the main housing loan contract and letter, they would have stated the loan is "SIBOR + x.x% fixed spread..." and all other terms and conditions they invoke to change the fixed spread are hidden in that T&Cs and which are not highlighted to their clients! (just that ordinary people individually or in a small group do not have the "muscle" to do!!!!!!!!)

    Should consult Shanmugam, and he will find some laws hidden in the law book to deal with CITI?

    May be can invoke LEMON law, or ANTI-COMPETITIVE law to deal with CITI or something else to deal with CITI?
    - The main reason: MAIN MORTGAGE AGREEMENT LETTER states "...SIBOR + x.x% fixed spread...".
    - CITI invoked some clause hidden in their massive T&Cs to change the fixed spread, and MOST IMPORTANTLY, this clause is NOT STATED IN THE MAIN MORTGAGE AGREEMENT LETTER and IT CONTRADICTS MAIN MORTGAGE AGREEMENT LETTER! As such, the clauses in T&Cs can be invalidated and amount to cheating of their clients by imposing such UNFAIR clauses in T&Cs that CONTRADICTS MAIN MORTGAGE AGREEMENT LETTER?

    Quote Originally Posted by amk View Post
    I like your language. Of course, GS, what do you expect.

    Back to loans, yes, all banks' loan T&C will have catchall terms to protect them. The contract is bullet proof.

    For example Citi's T&C in your link, no need to look far, read the very 1st line, it says:

    1 Interest
    1.1 We may vary the interest rate(s) from time to time at our discretion after giving reasonable notice to you.

    First line already cover Citi totally for any interest rate revisions. what sibor, what spread, what fixed rate.

    I feel bad for my friend. I was the one who recommended that package to him. As far as I know, all these years, no other bank has ever invoked that term to change a promised spread/rate just like that. Well done Citibank !
    Last edited by teddybear; 05-03-15 at 19:50.

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    Quote Originally Posted by amk View Post
    Yes I told him the same, plus also asked him to complain to MAS and contact straits times too. I strongly feel this thing needs to go public to get MAS's serious attention. At the very least, every one needs to be educated that ALL mortgage rate promised can be "revised" at will, and there are banks that actually are doing that. Citi should be punished with a public outcry. I wonder why Citi made such a decision. How much profit can it make from this ? Miserably small for a bank. And Citi is totally not afraid of the public outcry, that people will not trust its mortgage offering any more ? Or Citi is thinking ppl are ignorant and will forget what it did ?
    praise

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    Quote Originally Posted by teddybear View Post
    Does Singapore's LEMON LAW and ANTI-COMPETITION LAW apply to all these massive terms and conditions unilaterally set by banks that are all the same?
    They should, because it is an obvious case of manipulation and amounting to cheap their clients?
    Haiz, we consumers can't fight it unless the press is involved and MAS is paying attention. To me, this is a clear unfair contract term which should be invalid by default. Just msged him. He managed to talk to some reporters, hope he can convince the reporter to print this story. He said MAS no response.

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    It would help if he get a letter in black and white from CITI that they are unilaterally changing the "fixed spread" despite what is stated in the mortgage loan letter.

    Otherwise later CITI can clarify to reporters and just say "administrative mistake" and they had sent the "wrong letter" to him?
    "administrative mistake" becomes such a good LAME excuse these days, like the lawyer over-billed the doctor, just give excuse "administrative mistake", lo and behold, no penalty, no fault of them!

    Quote Originally Posted by amk View Post
    Haiz, we consumers can't fight it unless the press is involved and MAS is paying attention. To me, this is a clear unfair contract term which should be invalid by default. Just msged him. He managed to talk to some reporters, hope he can convince the reporter to print this story. He said MAS no response.

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    Whatever happens to sanctity of contract?

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    i doubt very much we have a case


    during the lehman crisis, when USD funding rates shot thru the roof.

    Libor was fixed say at 2 pct for 12 mth, the actual mkt was trading at 2.75 to 3.25 pct.

    Corporate customers pulled out their credit facilities letter and drew down max amt of 12mth at Libor plus, say 0.5pct.
    Which means they are getting their funds cheaper than the actual mkt.

    banks were scrambling to cover the funds in the mkt and lost tonnes of money...

    before long, the banks started to change the facility agreement, new and existing ones, to Cost of funds + 0.5 pct...

    There was nothing the customers could do... neither did the central banks did anything...

    the corporate customers LL had to accept it ...

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    Some here are congratulating themselves on getting a good deal from citibank. "I am a big fxxking hero, get 1M sibor + 0.65".
    Yet when terms change, now they are crying victimhood here? Wahbiang.

    When u apply for loan, u r given letter of offer valid for some time, u can compare with other competing letter of offer from other banks. Study the t&c
    And nobody ever forced u to accept the letter of offer. The contract is signed on willing party basis is it not?

    You signed it, u owned it.

    whatever happened to sanctity of contract?
    (Even though the terms are stacked heavily in favor of banks, a contract still must be honored)

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    Quote Originally Posted by amk View Post
    ...As far as I know, all these years, no other bank has ever invoked that term to change a promised spread/rate just like that. Well done Citibank !
    When rates go negative, cimb sent a letter stating there would be a floor on rates.
    so cimb already used the clause to change the mortgage contract.

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    amk, just a thought:
    can your friend switch to other banks?
    or will he fail the TDSR test?

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    Quote Originally Posted by hopeful View Post
    When rates go negative, cimb sent a letter stating there would be a floor on rates.
    so cimb already used the clause to change the mortgage contract.
    yes true, I forgot about the negative rate case. for that one, consumers dun feel that unfair as it is indeed extraordinary.
    nobody is doubting the legality of the move. As I said, contract is bullet proof. however legality is one thing, unfair term is another. I feel the public should be at least made known there is a bank doing this. and Citi should be at least reprimanded by MAS for invoking that kind of term liberally. Citi should be shamed publicly, pretty much the same as GS giving ppl 90mins "reasonable time" so every one knows what kind of bank GS is. SG is too small. I am sure in Europe or US the bank can be sued.

    Case in mind, the IB CHF story. You know that right ? IB can requote the price after the contract was done because again it is in his T&C. Ppl are being asked to pay hundreds of thousands, for Singapore client. However, in Germany, IB absorbed the loss and did not ask the client to pay, because in Germany there is this unfair contract terms clause, IB knew it would be challenged. Only in SG, there seems to be little protection.

    proud owner: I guess you know for corporate loans, say APMLA format, the complete doc is something like 70-100 pages, with "Increase of Cost" prominently displayed and explicitly spelt out as a valid reason to revise the rate, in the same font, size as in any other terms, there is no separate booklet "T&C" separately, so it is more "fair" than consumer loan T&C where "I can do whatever I want" is a "hidden" clause in small print. In addition, corporates have lawyers vetting through contracts and they are not afraid of suing the bank for contract discrepancy, whereas consumer is always not at a equal position as a bank in terms of resources. (This is why US has class action legal recourse for consumers.) Whether or not he has a case, depends entirely on whether MAS wants to make it a case.

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    Quote Originally Posted by hopeful View Post
    amk, just a thought:
    can your friend switch to other banks?
    or will he fail the TDSR test?
    I dun know if he will pass the TDSR. But I know he has a good job, and this is his only house.

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    Quote Originally Posted by amk View Post
    ......
    Case in mind, the IB CHF story. You know that right ? IB can requote the price after the contract was done because again it is in his T&C. Ppl are being asked to pay hundreds of thousands, for Singapore client. However, in Germany, IB absorbed the loss and did not ask the client to pay, because in Germany there is this unfair contract terms clause, IB knew it would be challenged. Only in SG, there seems to be little protection.

    proud owner: I guess you know for corporate loans, say APMLA format, the complete doc is something like 70-100 pages, with "Increase of Cost" prominently displayed and explicitly spelt out as a valid reason to revise the rate, in the same font, size as in any other terms, there is no separate booklet "T&C" separately, so it is more "fair" than consumer loan T&C where "I can do whatever I want" is a "hidden" clause in small print. In addition, corporates have lawyers vetting through contracts and they are not afraid of suing the bank for contract discrepancy, whereas consumer is always not at a equal position as a bank in terms of resources. (This is why US has class action legal recourse for consumers.) Whether or not he has a case, depends entirely on whether MAS wants to make it a case.
    We both know big fish eat small fish, i accept it, but my guess is all know it, but most dont really accept it

    This (para-phrased) message by an unknown is always at the back of my mind:
    "how long does it take for you to accumulate, $200k, 300k. To the majority of you, to accumulate that amount take a few years of your life, your hard work, your blood and your sweat.
    Yet I would confidently say most of you would not spend the few hours, not to mention days, to look through the contracts, to look at the terms and conditions, to ask around, to ask for advice and opinion. Or if you asked around, you asked your friends and relatives, who are in no way qualified to give you any sort of advice.
    This is not called doing your homework, you are only fooling yourself, so that if the deal turns sour, you can comfort yourself saying you have done your homework, you have done your due diligence.

    Remember, it takes a few years to accumulate that amount, and you spend only a few hours to gamble it away. Most here would denied they gambled, instead calling it an investment, but i would called it gambling."

    I cannot put the it as well as the original speaker, but i hope forummers here get the message.

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    Quote Originally Posted by teddybear View Post
    It would help if he get a letter in black and white from CITI that they are unilaterally changing the "fixed spread" despite what is stated in the mortgage loan letter.
    Citi sent him a letter telling him the spread is changed. No, not admin mistake. Legally Citi is covered.

    hopeful: hmmm.. slightly different here. you do not have a choice here, all banks have catchall clause. So the only mistake he made is trusting Citi to be an ethical bank. Again, you may say he made a mistake: banks are not to be trusted, case in point: GS 90mins "reasonable" time. Well, before this we dun know, now we do, at least Citi is not to be trusted. So ppl should place yet another factor on the trustworthiness of the bank when considering loan packages. Lowest rate is not always the best deal: will the bank honor it ? (Hey that's a line for all the mortgage broker here, another way to sell you deal : "my package may not be the best, but my bank will honour it not like others" )

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