Recently, my friend bought a property valued at RM 350k and in the bank letter of offer, it was mentioned that from its panel of valuers, the bank willing to lend 67.7%, which is RM 234,500. However, after signing the letter of offer, the real valuation was done and found that the property is actually valued at RM320k, and the bank is now willing to give up the loan of RM 216,640 (67.7% of RM 320k). There is a shortage of fund of RM 17,860.

The question is: the bank can do so - of lowering the loan amount? can my friend take action against the bank?

but, from my own experience, I think the bank has the right to do so, because in the letter of offer, it was mentioned that the loan amount cannot go above a % of the actual property value.

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This post has been edited by jelen: Oct 26 2011, 12:34 PM

until what stage the loan process progress? Has the redemption sum being disbursed and loan agreement signed?

loan agreement signed, not yet disburse...

I think the bank has the right to adjust the valuation amount before the letter of offer is signed. Perhaps just request for a higher MOF.

Your friend can ask the banker to appeal to adjust the margin of finance. It should be done easily as the MOF is not high.

Yes they can as the LO is NORMALLY subject to official valuation. I know this first hand as I went thru the same prob for my 3rd prop.

Learnt my lesson here, so all my other purchase I make sure there's at least 2-3 banks can support the same valuation and provide the LO so there wont be anymore nasty surprises......