UNVERIFIED LOW DOCS AND FULL DOC Mortgage Loans a chronic problem in Australia

What is the point of having a Banker's Code of Conduct if no banker complies with its conditions and regulations?  Bankers approving fraudulent loans without verification of income to ensure "affordability," as per the Code.  This is rife White Collar Crime here in Australia.  Brokers and bank managers are merely the sellers.   Then to mask negative affordability, our sleazy banker chiefs permit extra buffer monies to be approved, so the hapless customer is given extra debt to pay mortgage payments with to mask the unaffordability.  The customer is then laden with debt and no possibility of an exit plan. Banks know exactly how to ensnare customers into a lifetime of debt when that same customer owned their own home and were debt free when the bank approached them with bad financial advice.  Chief Bankers are also earning $4 million a year in bonuses attached to wages of similar amounts for arranging sellers to sell their nefarious products, knowing its all predicated on a Ponzi structure.

What is the point of having the Australian Securities and Investment Commission (Dumb "ASIC") if they cannot tell the difference between the crooked manufacturer of faulty financial products or the seller?  

If there are 350 fraudulent loan application forms ("LAF's") as stated in the media this week, and $100 million involved, why has ASIC failed to discover the fact that the sub prime lending scandal was created by the Bankers?  Brokers/sellers did not APPROVE THE LOANS?  Two brokers are alleged to have falsified LAFs (one count each) and each of the Major Banks are involved in the APPROVAL of the dodgy loans.  In any case, $100 billion of these fraudulent loans are floating around in the breeze.

The big consumer question remains unanswered: Why does ASIC consistently let the Bankers off the Hook?

Read this article today from Broker News and our response:  The current Mortgage Product Situation of fraudulent lending is laughable......or "Lafable."

ASIC facing heat over handling of alleged broker fraud

Adam Smith, Australian Broker News 9 Jan 2015

ASIC has found itself facing heat over its handling of an alleged $110m home loan fraud case.

Najam Shah and Aizaz Hassan of Footscray Company Myra Home Loan Pty Ltd earlier this week were arrested and charged with conspiracy to defraud over ASIC’s allegations that they conspired to defraud banks by creating and using false documents in support of home loans and house and land packages. ASIC said the alleged conspiracy involved false documents for more than 300 loan applications to lenders including Commonwealth Bank, Westpac, St George, Bankwest, Adelaide BankANZ, Bank of Queensland, Choice Home Loans, CitibankNABPepper and Suncorp.

Now ASIC is facing criticism over its lag in taking action in the case, The Australian has reported. The Australian said Hassan was, until his arrest Tuesday, still operating as a licensed mortgage broker. His license was only cancelled after media coverage of the allegations, the paper claimed.

Labor senator Sam Dastyari has now called for ASIC to be brought before the Senate economics committee next month to explain its lag in cracking down on the brokers.

“This is outrageous. It’s once again a demonstration of ASIC failing to act when all the evidence is before them,” Dastyari told The Australian.

Dastyari claimed that the issue was not the regulator’s lack of power, but that it was not using the powers it already had.

“For those of us who have ­increasingly lost faith in ASIC’s ability to be the tough cop on the beat, situations like this reinforce the view, as Greg Medcraft said, that ­Australia is becoming a paradise for white collar criminals. There is this constant failure to act.”

Our Response:

The white collar crime Paradise Mr Medcraft is talking about as he well knows, is the 350 approvals by the Banks....the Lender culprits.  The Brokers were charged with 1 charge each.  There were 350 loans approved by Major Banks.  The brokers never approved the loans.  What about the obligations owed to the consumer by the Banks?  What does it take for Australia to wake up to the fact the Lenders verify nothing, shove all liability on the Brokers using a service calculator.  Are there three people's handwriting on every LAF?  Yes of course there is and some tweaking made a bad situation worse by altering the income figures inside the bank, after being sent in by the sellers of Product.  There are thousands of altered LAFs. 

Senator Dastyari needs to understand this model and not listen to ASIC's bleating and stupidity.  So what about all the other loans the banks have approved UNVERIFIED?  Medcraft admits no loans verified in Australia for over ten years.  The paper trail confirms that assertion.  And as we enter 2015, ASIC wants to suggest they are doing something.  Good one ASICKERS.  I hope the brokers have an excellent legal team, so the truth can at last ooze out.

Denise Brailey, President BFCSA (Inc)

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