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Bank's Insurance Companies/Underwriters CARTEL

Posted by on in Lawyer Lies
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Whilst going through my hardships papers - the banks made note of reporting it to their insurance company. Since I have concrete proof of maladministration - would'nt it be illegal (or Insurance fraud) if they make claims to their insurance companies for losses on these fraud loans??

Should we be contacting the Bank insurance companies to inform them. Wouldn't they be losing money too because of this fraud.  In this scenario - it appears that again the banks are profiting everywhere illegally!! Shouldn't we be contacting the Insurance companies with our proof and inform them that the loan is in dispute and let them decide if they are going to cover the bank in this circumstance. Who knows? - by providing evidence to these companies - we might unknowningly provide the Insurance company with evidence that might show the bank's breaking insurance policy clauses that we don"t even know about!!

Is this line of thinking correct? Can someone tell me otherwise if not please

EDITOR:  The Banks delivered the same LAFs to the Insurer for APPROVAL......... in all cases.

How is it that the Insurers accepted the LAFs and checked no-one to verify the validity of the application in assessing THE RISK?

Question is: Is this a Conspiracy to Defraud?  Is it Criminal Collusion?  

Sounds more like a CARTEL TO ME, so what is ACCC doing about this?  ACCC is the Third Sister of Regulatory Nothingness....sharpen your pencils and start writing:  Dear Mr Chairman ACCC....re the Banker Insurer / Cartel and the two biggest suspects Genworth and PMI

Question:  Did the Banks underwrite their own Insurer?

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  • doyla66
    doyla66 Sunday, 26 August 2012

    Wouldn't this apply to tax invasion and fraud too - if they are using these loans as write -off in taxes?

  • doyla66
    doyla66 Sunday, 26 August 2012

    two banks (CBA and NAB) had what they call OPEN POLICY and what this meant is that IF they approved the loan, they didnt need to send it to the mortgage insurer for their approval. It was automatically approved. I guess that means that the CBA and NAB and the ability to wrought the system more than others. With ordinary banks, they had to send the loan application on to the mortgage insurers for their approval too. This is why I have previously said, if you cannot get a copy of your LAF, contact your mortgage insurer, they MUST have a copy as they had to approve the loans too.
    Another point about mortgage insurers is that before low doc loans, their claim rate was 0.01% of all loans written but now I reckon they would be running out of money due to too many claims. I wouldnt be surprised if they start to list themselves on the stock exchange to raise some much needed funds.

  • doyla66
    doyla66 Sunday, 26 August 2012

    Putting on my insurance broker hat

    I had written a length comment on this because it is sucha fascinating topic. Somehow I deleted virtually all of it!:(
    Below is what didn't get deleted.
    I confessed a few posts ago to having been a mortgage and insurance broker in a previous life. This post set me thinking and persuaded me to put on my insurance broker hat again, even though, for reasons i won't go into, I am no longer in the business.
    Insurance operates on the principle of "uberrima fides," or utmost good faith. First of all, it would be interesting to get hold of a copy of the policy wording. Anybody got one?
    Think about this.
    1)Fraud is a criminal act.
    2)From my research, the commission of a criminal act requires 2 things, the "Mens Rea" (guilty mind/thinging about it) and the "Actus Reus" (the doing of the dastardly deed!) You can think about robbing a bank, but unless the act follows the thought, there is no offence. All insurance policies that I know of would axclude any deliberate act by the insured. Now, if the banks have committed fraud (oh, never, banks are honourable like Brutus) it is a criminal offence since both "Mens Rea" and "Actus Reus"" are present. That being the case, the fraud is a deliberate act on the part of the insured (the bank) and, in my humble opinion, any claim that is a result of fraud should be decined by the insurer.
    There is also another significant insurance term "proximate cause." Here is a definition of "proximate casue."
    Definition
    Active, direct, and efficient cause of loss in insurance that sets in motion an unbroken chain of events which bring about damage, destruction, or injury without the intervention of a new and independent force. Also called direct cause.


    Now. what is "the proximate cause" of the loss? Surely, it is the fraud perpetrated by the bank. No fraud would have meant no loan which would have meant no loss. Any deliberate act by an insured is normally automatically excluded in any insurance policy. You have a business losing money hand over fist. You have fire insurance on the business. You hire an arsonist who sets fire to the business. What is the proximate cause? Your hiring the arsonist. What is the proximate cause of the "supposed" mortgage loss? The fraudulent activity of the bank.
    Cat Woman's comment is very relevant and covers some of what I wrote that got deleted.
    It is common practice for insurance agents/brokers (which is what the banks are here) to have "underwriting guidelines" under which any deal that fits the guidelines is automatically accepted by the insurer. I would be surprised if only CBA and NAB were the only 2 to have "OPEN POLICY." I would bet my boots that Westpac and the others have the same set up.
    A similar situation exists between insurance companies and reinsurance companies. “Facultative reinsurance” means that every proposal has to be submitted to and approved by the reinsurer. Treaty reinsurance” means any deal that fits the treaty is automatically approved.
    Both banks and insurance companies operate under a type of fractional reserve system. You put $10,000.00 into bank and it creates $90,000.00 of new debt out of thin air. You pay a premium to an insurance company and you are covered for thousands of dollars more than your premium. This is fine while it’s “business as usual,” but when a financial crisis or a Christchurch earthquake happen, it’s game over Charlie until the poor old taxpayer is summoned to bail out the banks and insurance companies, well, insurance COMPANY
    There is much more to this, example. If banks don't really lend any money anyway, because they don't have any, how can they take out LMI if thay can't lose anything because they haven't loaned anything? Just a thought.

  • doyla66
    doyla66 Sunday, 26 August 2012

    Thanks Geoff and Lisa. That information is awesome.!! Really appreciate it. Would the insurance companies have copies of all LAF's even the loans that were at 80% LVR and below.

    EDITOR: Yes in their files

  • doyla66
    doyla66 Sunday, 26 August 2012

    Chuckle, Chuckle! Look what I found!

    I probably need to get out more, but you you have a passion,you are driven!
    In my previous comment I said "First of all, it would be interesting to get hold of a copy of the policy wording. Anybody got one? " WELL, I decided to go have a ferrit round and look what I found.
    LENDERS MORTGAGE INSURANCE

    MASTER POLICY for Westpac Banking Corporation J.P. Morgan Trust Australia Limited Series 2007-1G WST Trust

    Genworth Financial Mortgage Insurance Pty Limited, ABN 60 106 974 305 ® Registered Trade Mark of Genworth Financial, Inc.
    Page 1 Genworth Financial Mortgage Insurance Pty Limited (ABN 60 106 974 305)

    LENDERS MORTGAGE INSURANCE MASTER POLICY
    You can find the whole policy at google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?.. BUT here is the interesting bit. The most important part, to me at least, of aninsurancce policy is the "EXCLUSIONS" Section. i.e., what ISN'T covered. You will see the exclusions section below. Makes interesting reading ESPECIALLY
    This Policy does not cover any loss arising from:(d) the fact that the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security is void or unenforceable; or


    (e) where the Credit Code applies, any failure of the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security to comply with the requirements of the Credit Code,
    10. EXCLUSIONS

    This Policy does not cover any loss arising from:


    (a) any war or warlike activities;


    (b) the use, existence or escape of nuclear weapons material or ionizing radiation from or contamination by radioactivity from any nuclear fuel or nuclear waste from the combustion of nuclear fuel;


    (c) the existence or escape of any pollution or environmentally hazardous material;


    (d) the fact that the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security is void or unenforceable; or


    (e) where the Credit Code applies, any failure of the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security to comply with the requirements of the Credit Code,

    Interesting EH?

  • doyla66
    doyla66 Sunday, 26 August 2012

    ouch! US enquires/prosecutions confirm 'round robin' kick backs($b's)ex MortInsurer to Banks = US felony! Affectively, the banks agreed to take back the lending risk after being paid hyper inflated fees from none other than the Mortgage Insurance Co's (Glenworth et al) as a way to purportedly (il)"legally" hand back 'lion's share' of insurance profits, $billions. . in effect, a contrived "secret commission" to avoid US strict Regulations on such activity. . .articles written on this subject (if required). . professor says, it was simply "a loop" of transactions!!!

  • doyla66
    doyla66 Sunday, 26 August 2012

    New can o' worms?

    Looks like we could have a whole new can 'o worms here Andy and others. Exclusion clearly states "This Policy does not cover any loss arising from:(d) the fact that the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security is void or unenforceable; or


    (e) where the Credit Code applies, any failure of the Insured Loan Contract, any Mortgage Guarantee or any Collateral Security to comply with the requirements of the Credit Code,

    I wonder how many "void or unenforceable Insured Loan Contracts" are floating around on both sides of the Tasman

  • doyla66
    doyla66 Sunday, 26 August 2012

    The insurers have always been the hidden beneficiaries - now the tide needs to turn with the spotlight shone right on them too.

  • doyla66
    doyla66 Sunday, 26 August 2012

    According to Geoff's Latvian mate's video, the RMBS demand pressure led to the subprime loans becoming part of the Securitisation of assets ie RMBS system. The whole deal is predicated on the insurer waving the magic policy and making silk purse investments out of sow's ear dodgy ones. Thus the insurance system must be informed about the existence of subprime mortgages. From what I've read they're the most likely loans to be insured ie. over 80% LVR, Lo Doc loans.

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