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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.

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400%+ higher than Disclosed.......True rate of home defaults & repossessions are hidden........ 90% are forced sales

Posted by on in Bankers A Law Unto Themselves
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.........more weapons and Kryptonite I bring....... from the Vault!.....

 

 

 

True rate of home defaults hidden

THE number of home repossessions around the nation is up to four times higher than reported figures because lenders are disguising the nature of forced sales to prop up property prices.

Australia's biggest private debt collector, Prushka, yesterday said about three-quarters of sales forced by bank and non-bank lenders were co-ordinated with the consent of home owners, meaning they were not recorded in court repossession figures.

"By far the most popular way for lenders is to sell the property with the consent of the borrower to avoid advertising the property as a forced sale," Prushka chief executive Roger Mendelson said.

"The idea is to work with the seller because if they sell the property as a mortgagee in possession that will slaughter the price because you're going to attract the bargain hunters."

Mr Mendelson said statements by Peter Costello yesterday that Australia had a low home loan "default rate" - where borrowers can't meet mortgage repayments - failed to address the impact of increasing unreported levels of repossessions.

During a discussion about US default rates hitting an all-time high in the first quarter of 2007, the Treasurer had told Macquarie Regional Radio: "The default rate in Australia is much, much lower than it is in the US ... in fact, we have one of the lowest default rates in the world."

Experts said rising interest rates, coupled with the prevalence of low-documentation loans that do not force borrowers to disclose their income, had caused a spike in mortgage defaults in Australia.

Ian Graham, chief executive of PMI Mortgage Insurance, which insures about one million home loans, said Australia had no register for compiling total home repossessions.

"We would like to see a register introduced - I think the Reserve Bank would be one body in particular that would benefit from more complete data," Mr Graham said.

State "writs of possession" registers record only sales where lenders are forced to apply for repossession orders.

Sydney's outer western suburbs are being hardest hit by the surge in repossessions.

In NSW, 5363 writs of possession were issued last year - up 10per cent on 2005.

Figures from the Victorian Supreme Court show there were 2791 repossession claims lodged last year, up from 2578 in 2005. The figure has more than doubled since 2003, when there were 1225.

"In southwest, west and northwest Sydney, property prices are weakest and in forced-sale situations property price declines of between 20 and 25 per cent are not unusual," Mr Graham said.

Dara Dhillon, principal of Dhillon Real Estate in Ingleburn in Sydney's outer southwest,
said 90 per cent of properties coming to the market were forced sales, and the number of homes hitting the market was rising.

"It's actually getting worse by the month - in one family I was working with, the elderly mother had to return to work to keep a roof over their heads," he said.

But he said that with high employment and healthy wages growth, it was last year's interest rate rises and lax lending policies of non-bank lenders - especially "low-doc" loans where borrowers are not required to prove their income - that were to blame for the current fallout.

"It's a joke - if it was my money I wouldn't lend it but I believe lenders are still doing it," he said. "Low-doc, no-doc, whatever doc - doc doesn't even come into the picture."


 

.....more knowledgeable you have become.......use the Force........

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Comments

  • doyla66
    doyla66 Monday, 10 December 2012

    So now I know why the banks are allowing me to sell may properties without it being forced, I
    thought they were trying to help me by not reposssing.(At least that is what they said)
    HOW STUPID AM I??
    How smart are the banks..lowest default rate in the world...any wonder there's no need for a Royal Commission.
    I am learning so much reading these blogs..........

  • doyla66
    doyla66 Monday, 10 December 2012

    Yes Maria.. everything is in the banks favour we are learning daily now from bfcsa blogs.. now even loopholes in the reporting of mortgage defaults. I am also aware that Banks sponsor all the economic expert tv personalities to keep us citizens thinking and confident that Australia escaped the GFC...you can see kochie and the rest of them babble on with spin.

  • doyla66
    doyla66 Monday, 10 December 2012

    Whatever the banks do, you can be sure that it's for their own benefit. The more we read the wider our eyes open.
    No more are we the innocent trusting souls who got caught in the evil bank trap. This is where we need Asic to give Fos the jurisdiction to investigate all fraudulent loans and if Asic won't do their job, then it's up to the Politicians to force their hand and be honest for once.

  • doyla66
    doyla66 Monday, 10 December 2012

    I read an article somewhere recently, (may have been one of the Broker websites) where one lending official was claiming that it was a problem for the industry that not enough people were selling up and moving home which meant there was a slowdown affect on the lending industry. He went on to say that they needed to 'encourage' more people to move to remedy this. I took it to mean (cynic, that I am) that foreclosure and repossession would be among the methods of encouragement to which they would resort. Does anyone know where the source of this may have been? I have looked but can't seem to find it again. Someone else on BFCSA may have it and be kind enough to post it in this thread.

    There seems to be some method and pattern tied to the securitisation model that requires a steady and increasing rate of property sales to continually sure up the securitisation / re-securitisation / re-re-securitisation of these pooled derivatives and resulting credit default swaps. Not at the bottom of it all yet but I'm looking and pretty sure I'll find it. I urge other members to do the same as an explanation of this point would go a long way to showing why foreclosure is so common and why it is moved on so quickly by lenders when the borrower, who was generally in it for the long haul - 30 year relationship - falls slightly behind. I know some borrowers must be a genuine nightmare for lenders as they never had the means and avoid communication with the lender, other bad practices, etc, - but that's not all of us by a long shot.

    The other thing I've been trying to figure out is, with a non-bank mortgage which has been securitised, what is it that commonly seems to significantly drive up the interest rates in years 3,4 and 5 to the point that the home owner finds it very difficult to maintain payments? I believe it has to do with the trustee's need to fund the ongoing re-securitisation of the mortgage and provide profits to investors. Need more info on this.

    Have other BFCSA members with bank loans experienced a significant upturn in the interest rate curve during years 3,4 and 5 or is it limited to only non-bank deals?

  • doyla66
    doyla66 Monday, 10 December 2012

    You also need to add to this new real ongoing % defaulting loans
    1) all those that are refinanced externally
    2) and those that are renegotiated/refinanced from within
    i.e. (hardship, equity taps, amortization of arrears, etc)
    (this is in the banksters annual returns & road shows)

    So full docs is likely closer to 6-8 % :p
    So lo docs is likely closer to 11-15 % :p

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