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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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BFCSA: Australian Banks to blame for high Loan to Value Ratio and Risky Home Loans; Blooomberg

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Bloomberg agrees:

Australian Banks’ Risky Loans Fueling House Price Gains

By Nichola Saminather 
December 01, 2013 8:42 PM EST  

Houses in Sydney
Australia's biggest banks, whose lending standards helped the nation avoid a property crash during the global credit crisis, are raising concern with home loans helping to fuel record house prices.

The proportion of mortgages that represented more than 80 percent of a home’s value -- the loan-to-value ratio -- rose in the third quarter to the highest since the second quarter of 2009, data from the banking regulator show. Mortgages in which borrowers pay only interest also increased to the highest in at least five years, according to the figures.

The  Reserve Bank s 2.25 percentage points rate reduction in the past two years is luring buyers counting on home prices, which jumped the most in three years in the 12 months through Oct. 31, to extend gains.

As the proportion of risky loans climbs -- allowing some people to purchase homes who otherwise couldn’t -- lenders, home-buyers and mortgage insurers are more exposed to any decline in prices.

“We could be laying a potential bear trap later if the property market comes off and those investments don’t translate into as good returns as people were expecting,” said Martin North, principal at data company Digital Finance Analytics, who has been partnering with JPMorgan Chase & Co. to produce mortgage reports for more than nine years.

An increase in unemployment  in Australia or rising interest rates in the U.S. could lead to a surge in defaults, North said.

 

Rising LVRs

Mortgages with loan-to-value ratios higher than 80 percent rose to 35 percent as of Sept. 30 at Australia’s four big banks -- Commonwealth Bank of Australia, Australia & New Zealand Banking Group (ANZ) Westpac Banking Corp (WBC) and National Australia Bank Ltd (NAB) -  the highest since June 2009, according to the Australian Prudential Regulation Authority.

The average ratio at the major banks rose to 67 percent in the third quarter from 65 percent a year earlier and a low of 63 percent in the second quarter of 2009, according to Digital Finance Analytics, the data company.

“It’s not that we’ve changed any of our policies, but the mix of demand is changing,” Phil Chronican, chief executive officer of ANZ’s Australian business, said in an interview in Sydney on Nov. 27. “More people are trading up and people who trade up tend to go for higher loan-to-value ratios.”

ANZ’s average ratio increased to 70 percent in the six months to Sept. 30, from 64 percent a year earlier, according to regulatory filings.

The big four banks held 85 percent of the country’s A$1.2 trillion ($1.1 trillion) of outstanding mortgages in September, according to the banking regulator.

In 2008, after the September collapse of Lehman Brothers Holdings Inc. that helped trigger the international credit crisis, Australia’s biggest banks remained stable as they maintained their lending rules.

 

Lending Standards

“The Australian banking sector’s less fierce competitive environment relative to some of the global peers has contributed to less-risky lending standards, reflected in lower loan-to-value ratios in the residential mortgage sector,” Standard & Poor's said in a report in July 2009.

Aside from existing home owners trading up, investors are also piling in. In New South Wales, the country’s most populous state, investor mortgage approvals accounted for about 40 percent of all home loans by value, the highest since 2004, the RBA said in its semi-annual Financial Stability Review on Sept. 25. The average LVR on loans to this group has risen to about 80 percent from about 60 percent in 2009, according to Digital Finance.

Investors are betting on further capital gains after house prices started to rise in early 2013.

 

Record Prices

The average home price in Australia’s biggest cities rose 8 percent in November from a year earlier, the biggest annual gain since the year ended Oct. 31, 2010, to an all-time high of A$606,003 according to the RP Data-Rismark home value index.

Prices in Sydney surged 14 percent in the 11 months to Nov. 30 to a record A$724,628.

SQM Research Pty, a Sydney-based data company, forecasts price gains of as much as 11 percent in 2014.

Australian tax rules support investment in housing by allowing investors to offset any losses on rental real estate against other income.

Along with higher loan-to-value ratios, banks are writing a greater proportion of interest-only loans, which accounted for 39 percent of the biggest banks’ lending in the three months to Sept. 30, from 37.5 percent a year earlier and a low of 28 percent in the first quarter of 2009, figures from the prudential regulator show.

 

Interest-Only Loans

National Australia Bank has seen a “slight increase” in interest-only loans in recent months, which it attributes to investors returning to the property market, Nick Higginbottom, a spokesman for the bank, said in an e-mailed response to questions. Younger home-buyers and those who rely on a single source of income are also taking out these loans, he said.

Interest-only loans allow people who otherwise wouldn’t be able to afford it to buy, while letting others acquire more expensive properties than they could with an interest-and-principal mortgage, said Andrew Wilson, senior economist at real estate data firm Australian Property Monitors. 

“In a rising market, people become more risk-inclined, and banks are promoting” these loans because people want them, Wilson said. “There’s always a danger that if markets correct, it could present problems particularly for investors with a short-term focus.”

 

Risk-Inclined Borrowers

On top of a decline in the average variable interest rate on standard housing loans to a four-year low of 5.95, banks are offering discounts to some customers.

“Australian house prices already looked in the ‘bubble region’ even before this 2013 spring surge so why are they reaching new highs?” Brian Johnson, a Sydney-based bank analyst at CLSA Ltd., said in an October report. Aside from low interest rates, “Australian banks are aggressively offering ‘package discounts’ to headline standard variable rates, rebating cash to borrowers, lowering credit underwriting standards.”

 

Westpac is offering to reduce the headline variable rate of 5.98 percent on its Rocket Investment Loan to as low as 5.08 percent on mortgages approved before Dec. 20. NAB will reduce the 5.38 percent interest rate on its Tailored Home Loan product to 5.03 percent on mortgages of more than A$500,000.

 

Lenders are offering these discounts as their own cost of funding falls, Scott Manning, a Sydney-based banking analyst at JPMorgan Chase & Co., said in a media briefing last week.

Banks’ borrowing costs in Australia are near their lowest level in more than five years, with the average yield premium over the swap rate for financial company bonds touching 96 basis points on Nov. 26, the narrowest spread since February 2008, according to a Bank of America Merrill Lynch index.

 

Discounted Mortgages

“All of the major banks, if you borrow A$500,000 or more, have at least 80 basis points advertised” as a discount, Manning said. These are “very early signs of a quite aggressive response” as the cost of funds improves.

First-time buyers, who are seeing the biggest challenges to buy as prices climb, are increasingly taking out loans with LVRs of more than 80 percent, the highest in at least five years, according to figures from DFA.

Commonwealth Bank (CBA) requires borrowers to have a minimum deposit of 5 percent and demonstrate an ability to save, spokeswoman Tracy Hicks said in an e-mailed response to questions last week. The bank’s maximum loan-to-value ratio was increased to 95 percent from 90 percent for eligible borrowers in February 2011, she said. Westpac spokesman Danny John didn’t respond to e-mail and voice-mail messages seeking comment.

 

No Limits

Unlike other countries that faced spikes in speculative housing activity, including neighbour  New Zealand, Australia’s banking regulator is yet to impose any limit on the lending.

APRA is monitoring both high loan-to-value and interest-only home lending, and will “take supervisory action” if a lender skews its loan portfolio too heavily in favor of these mortgages, Chairman John Laker said in an Oct. 29 speech.

New Zealand required banks to limit loans with ratios higher than 80 percent to 10 percent of their total mortgage lending to curb price gains without raising interest rates. The share of new high-ratio loans fell by 50 percent to 12.8 percent in October from the previous month, central bank  figures released last week showed.

Sweden in October 2010 capped mortgages at 85 percent of a property’s value and Canada reduced the allowable LVR to 80 percent from 85 percent in June 2012.

The risks of default on high-ratio mortgages are bigger for lenders’ mortgage insurers, rather than the banks, said APM’s Wilson. Banks require mortgage insurance on loans with a loan to value higher than 80 percent to cover them if the borrower is unable to make payments. There is some easing of this requirement, with some mortgage brokers advertising mortgages of as high as 85 percent without insurance.

 

“Transferring part of the risk to lenders’ mortgage insurers does not negate your responsibility to maintain the quality of the lending book,” APRA’s Laker said.

To contact the reporter on this story: Nichola Saminather in Sydney at This email address is being protected from spambots. You need JavaScript enabled to view it." title="Send E-mail" style="color: #1b75bd;">This email address is being protected from spambots. You need JavaScript enabled to view it.

To contact the editors responsible for this story: Andreea Papuc at This email address is being protected from spambots. You need JavaScript enabled to view it." title="Send E-mail" style="color: #1b75bd;">This email address is being protected from spambots. You need JavaScript enabled to view it.; Rob Urban at This email address is being protected from spambots. You need JavaScript enabled to view it." title="Send E-mail" style="color: #1b75bd;">This email address is being protected from spambots. You need JavaScript enabled to view it.

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  • doyla66
    doyla66 Thursday, 05 December 2013

    Well, it is nine months on since I made my offer.

    http://www.bfcsa.com.au/index.php/entry/bfcsa-captain-haddock-has-his-say

    I note that no one had the courage to take me up on it. I note also that we are still waiting to see any losses emerge in the AOFM's portfolio of RMBS (which by the way, continues to perform fine and has reduced to ~$8.5 billion and shrinking).

    The offer still stands. Anyone game to take it up?

  • Denise
    Denise Thursday, 05 December 2013

    Ah we have missed you Captain Haddock. Welcome Back. You see the portfolio has decreased considerably to only $8.5 billion and shrinking. But you must have missed what occurred in February. After my speech and evidence on 8th August to Senators (re Banking Post GFC), and I had pointed out re RMBS packs that the Government cannot, ought not to profit from a fraud, the then Treasurer Mr Swan announced that the RMBS Packs purchased by the AOFM, were "one of the most profitable policies the Government had ever implemented." He then went to say despite the wonderful profits, they would not be purchasing any more. Well no surprises there - not to me at any rate. After all they were purchased with tax payers dollars. Why kill the goose laying golden eggs you may well ask? Well the gold was tarnished - the proceeds of crime......................as we pointed out in August. Perhaps by coincidence? Methinks not. These RMBS packs were a time bomb.......................but no-one realised until we rolled the word fraud down the aisle, like jaffas at the cinema.
    The big question here is why do we still have a few of these "securities" hanging around, ten months later, and in the tax payers name? Not that we really care, but we wonder who they offloaded the rest to? Who are the lucky bunny buyers? Are they international buyers or homegrown? But its a little mysterious nonetheless. There will be a lot more to unravel shortly. You see Captain, you need to stay tuned to our site for the finer details. I think you may have the wrong memo's. [email protected]

  • doyla66
    doyla66 Thursday, 05 December 2013

    And ASIC goes on YOU TUBE

    US plans new bank fraud cases in early 2014-attorney general
    The U.S. Justice Department plans to bring civil mortgage fraud cases against several financial institutions early in 2014 using as a template the case that ended last month in JPMorgan Chase's $13 billion settlement, U.S. Attorney General Eric Holder said on Wednesday.

    Play VideoAG Holder: JPM settlement inflicts painCNBC's Pete Williams reports that JPMorgan executives knew there were worthless loans being packaged to consumers.In an interview with Reuters, Holder would not say which firms or how many could face suits but said the Justice Department was in contact with them about the cases and it was hard to say whether the talks would lead to settlements.

    (Read more: Fed's Lacker: Bank 'wills' to reduce risky funding)

    "We have a number of investigations that are coming to a head at the same time,'' he said. "It is my hope that the next round of these cases will be filed soon after the new year.''

    —By Reuters

  • Denise
    Denise Thursday, 05 December 2013

    Dear Captain YOU ask why have we not answered your question:
    You wrote: Really, there are two possibilities here. Either (a) a number of arms of the government, APRA, ASIC, all three rating agencies, every major bank and investment bank, all regional banks and a number of the largest credit unions and building societies, non-bank lenders, major audit firms and the entire capital markets of Australia and offshore are complicit in a scheme to defraud the Australian public that only the readers of this website have discovered, or (b) the small number of readers of this website have been poorly advised, failed to read their loan contracts, were the subject of some level of fraud by brokers and are wrongly assuming that their example is indicative of everyone else.

    Answer is simple: For a fraud of this magnitude to work it is engineered by a few corrupted players at the top. The middle bank management cannot see the fraud and everyone underneath. The Brokers cannot see the fraud, yet they have been set up to take the blame...that much is very clear. But ask yourself the question - how did the same fraud sweep across several powerhouse nations...undetected for years. Regulators asleep or some top bids on the take?
    APRA has been kept in the dark. The audits are defined by APRA as being "into the securities." Yes the "securities" EXIST but they were obtained by deception......................The Mums and Dad Lenders do not know that. A news item referred to tax payers. I have long suggested it is in fact Mums and Dads' investment funds being "invested" in RMBS packs - my words:
    "retiree funds being on lent to pensioners." Think on that.

    Scotland Yard admit finding "gallons fo white out being used by banks................" referring to altering income details after the paperwork is submitted to bank......................WE know what they are referring to.........................the same as we discovered in 2001.

    APRA admits its stats come from Banks and passed on to Treasury and not to be released to public (their words) RBA say they get their stats from APRA. So who is checking bank's phoney figures? So why are there not more defaults or credit impaired recorded as they call them?
    They are called TOP UPS and BUFFER MONIES. Banks are blowing bubbles and miring everyone in debt......................

    Top Cop agrees with me: Yes Denise, Banks are the Engineers (top level) no doubt about it." He says: "refinancing has been curtailed....." So the music has stopped, market is actually falling. Most people in our group are reporting 2007 prices as the best they can get for their homes right now - all states.

    You cannot get away from FACT EDR complaints have enjoyed a 500% spike.................................why? As one person said recently....................."even one set of complaints can be a key indicator......." Yes indeed, there will be a price to pay as all of this unravels.

    The Banks have 85% market share of these toxic loans. People were only ever given 2 mins to read contracts and look at yellow stickers and were told "sign here." Contracts are for 30 years, yet set to implode within 4 years. The new loans under new NCCP Act...................are all the same model....................Nothing has changed.
    As property market heads south in each state, we could slip back to 2000 prices as the unravelling commences, as the top up tap is turned off. Its all going to get very ugly.

    I have a question for you Captain - we agree 3% of brokers are rogues.................so why are 100% of LAFs fraudulently tampered with after they are signed and usually by the credit assessors after LAF faxed to the bank and in CA's handwriting, not brokers?
    2nd Question: If 36% of all loans we have surveyed are written up and presented for approval by Bank Managers and bank staff, (ie no broker involved) why have ASIC failed to go after lenders? Clue: majority of these specific loans are Major Banks and 100% of those are fraudulent. Do not worry about BFCSA integrity and credibility - I have personally been breaking open these major scams for years, but I admit this is the biggest one, by far. Its designed to cause maximum pain.....a dirty banking bomb.

    As one economist put it: "I suspect the lending fraud you’ve uncovered will be the largest case of fraud ever perpetrated in Australian history." [email protected]

  • doyla66
    doyla66 Monday, 09 December 2013

    The Federal Government was seeking to reduce net debt and so terminated the purchase of new RMBS - the market was back on its feet and so the need for the program no longer existed. I am sorry but it had nothing to do with the quality of the assets. As I have stated many times, this information is publicly available. There is no mystery. The portfolio has reduced as the underlying borrowers continue to pay off their mortgages. Nothing to unravel. No bunnies.

    Not sure how comments from Scotland Yard are relevant here. You do know they are in the UK not Australia?

    Also, there is no point in quoting people like "Top Cop" and "one economist" unless you are willing to name them. Otherwise you could just be making it up. For example, I could say that a number of senators have acknowledged to me in private that your organisation is not taken seriously because of the outlandish claims made. You would simply deny it and ask me to say which senators made the comments. In fact this allegation is true. However, I am not offering it as a critique of your underlying point, merely to highlight how little worth there is in comments from nameless people.

    Your fundamental claim is that the evidence of your members proves that there has been systemic collusion to commit fraud in the Australian lending market. Let's say that your members loans in total add up to $240m of loans over the last twelve years. I have a question for YOU. Do you realise that this is less than 0.02% of the total market at the current point in time? That's right, the mortgage market in Australia is in excess of $1.2 TRILLION. In other words, your members represent probably about 0.005% of the loans written over this period of time. Now keep in mind that you actually seek people who think there has been fraud on their loan. You are therefore likely to get only those where there is some potential for fraud. Taking these factors into account, your argument simply does not hold up.

    I think you ought to look up the concept of confirmation bias. You appear to be suffering from a particularly virulent strain.

    I note also that you have not taken up my offer of a wager on the outcome of the investments in RMBS by the AOFM and potential losses. The offer remains open and will continue to do so. If you are so certain, then put your money where your mouth is. It should be a certain winner. I am offering you a golden opportunity here to prove to your members that you actually believe what you are saying. To me if you are not willing to take this bet on then you must admit that you don't really believe what you are actually saying and that you are a professional advocate who is taking money from your members under false pretences.

    Where, repeat where, is Denise Brailey - the world wonders.

  • doyla66
    doyla66 Wednesday, 11 December 2013

    Hmmm Hi Captain Haddock,
    Question for you,hypothetically if the members of BFCSA's loans are a mere $240 million and a small drop in the ocean,then why don't the lending institutions,admit the frauds and settle the loans? And get the monkey off their backs. My bet is that there are many more loans that are both fraudulent and now delinquent than the statistics show,given that the financial institutions provide their own fudged numbers.

    Its easy for " nameless people" to throw stones. Please reveal your name Captain you have to have a level playing field if you are going to denigrate a persons character,it would be courteous to respond to a person not a fish.
    Where is the real Captain Haddock the world would like to know!

  • doyla66
    doyla66 Tuesday, 24 December 2013

    Honesty, perhaps because they were not responsible for the fraud? Of course, if Denise was able to confirm the total balance of mortgages relating to members, it would be an interesting perspective on the claim of systemic fraud. Denise?

    Also, you really need to get over this idea that the banks can make numbers up about non-performing loans. They have regulators, rating agencies, auditors, equity analysts etc etc etc all over them like white on rice. Sure they make mistakes in reporting from time to time but they are never systemic.

    Re your last point, I assume you are making an attempt at humour - otherwise you would have used your name. I note that I have not denigrated anyone, merely offered a chance to demonstrate commitment to the claims of systemic fraud across the industry. It would appear Denise is quite happy to talk the talk. Where I come from that matters less than walking the walk.

  • Denise
    Denise Tuesday, 24 December 2013

    Ah Dear Captain Haddock, Always a pleasure to spar with you over banks behaving badly, fraudulent lending habits, exaggerated incomes calculated by service calculators etc. You ask for proof of systemic issues. There are several if one cares enough to look around. The first one is that we have viewed over 700 Loan Application Forms and 100% (not even 99%) contain exaggerated incomes that we now know were generated by the banks' own calculators and passwords given to brokers by the internal staffers. The income is hand-written and in most cases the handwriting is that of an internal staffer not the broker....................oops! And, placed on the internal copy after the fax. ASIC admitted they assumed banks were doing the right thing by customers. There are no audits of client files? Why not? The calculator was designed to protect banks from liability and case blame on brokers and borrowers. Nice n Neat. Regulators do not look into areas where there is self-regulation..........BIG oops. If these were casual mistakes as mentioned by you then why has BFCSA data collections found 100% have been fraudulently dealt with in the same manner involving different handlers? The total amount of the fraud is not the issue....the 100% tampering is the KEY INDICATOR of systemic fraud. You and I know that if the regulator had conducted the same surveillance and collation of data and sampled 800 files, they would say the sample size was world wide recognised as a reasonable sample. If 100% tampering was obvious then the Government would take that sample seriously as a key indicator of sub prime lending. ASIC did not do this although they received the same complaints and documents as evidenced by the 400 submissions to the Inquiry into ASIC. BFCSA did ASIC's job for them - as is normal - and are you saying because BFCSA conducted this survey and investigation over the past few years, that we should not be listened to and our findings are somehow mischievous? Really Captain, all the hallmarks of a grand fraud prevalent in the mortgage market are oozing to the service and clearly there are issues, enough for the Government to call a Roots and Branch Inquiry even if it is stacked with Banksters. You really do have to get over this idea that the banks are playing with a straight bat! Or even more bizarre is the notion that our bankers can be trusted when handling large sums of money and that we have kept our banks honest where the rest of the world has fallen for the same ponzi type scams in the banking sector. Even Father Christmas would enjoy a belly laugh at that one. "Yes Santa there is systemic fraud in the banking sector and the more this is picked up by main stream media, the more people will be asking BFCSA for help." The fraud is 100% of those looked at to date.......a worrisome thought indeed. [email protected]

  • Denise
    Denise Tuesday, 24 December 2013

    Bottom line Captain: Bankers intended to profit from the widespread effect of the Banker Engineered Fraud known as toxic loans. Of course these frauds are systemic within the banking system. And the proof is in the obscene profits from this particular product more than from any otehr facet of Banker Business. [email protected]

  • doyla66
    doyla66 Thursday, 26 December 2013

    Denise, there is nothing here you have not said before. What is the total dollar value of all the loans you have looked at, as a percentage of all lending that has been carried out over that the time that the loans were written? Given the total mortgage loan balance as at the end of 2012 was ~$1.2 trillion, and the average loan runs for ~5 years, let's assume your member loans were written over a total of 15 years. So what is the total loan balance of all your members as a percentage of ~$3.6 TRILLION dollars? Why won't you disclose the number?

    It is not good telling me you have a statistically significant sample. Even if that were true, and if you are talking 800 loans, it's not, it is self selected to borrowers who think there was fraud. I have seen my loan documentation. I can assure you there was no fraud. I have seen that of most of my family. No fraud. Anecdotal evidence means absolutely nothing - yours or mine or your members.

    Do you know what a reductio ad absurdum is Denise? If what you are suggesting is correct, we must, repeat MUST be seeing massive loan losses coming through. It is not happening. Therefore, what you are saying is not correct.

    There is a very simple way for you to demonstrate that you genuinely believe what you are saying. Accept my bet. If what you are saying is true, then you are absolutely guaranteed to win. So why not accept it unless you don't really believe it and are in fact just manufacturing an issue for your own self aggrandisement?

    Oh, and you keep talking about the profit from these so called toxic loans. Perhaps it is worth pointing out that banks can't profit from loans where the borrower defaults, they sell the property and make a loss. You can only make a profit if the borrrower repays. If the borrower repays, they get to keep the house. If the borrower get to keep the house, what exactly is the issue? Do you have any idea of the amount of management time and effort involved in managing bad loans? It is a long, long way from profitable business.

    The offer on the bet stands. Going by your form, I am guessing that you will not be accepting my wager. I think if you are going to be fair to your members you ought to have the moral fortitude to either take the bet or disclose that you are not willing to do so and state your reasons.

  • Denise
    Denise Friday, 27 December 2013

    0.4% is BIG Key Indicator of widespread looting according to experts

    My Dear Captain Haddock, yes its all for my own personal self grandiosement, that I help these people. You are not saying which area of banking you belong to. You say yours and your families loans have no fraud. You do not say if they were Low Doc Loans. I suspect they were FULL DOCS (and we find only 18% of loans with fraud are full docs - and written by bank staff) Did you see the Bank's copy of the LAF? Did you get a copy of the LAF at point of signing? Did you receive a call from the bank shortly before approval - verifying income? Hmmmmm. Gaps in your assertions Captain. You talk of a bet and I am not a gambler but I am at a loss of what it is you assert. You seem obsessed with what YOU see as figures which the mentality of a public servant would use and the very reason why we have a current Inquiry into ASIC. You seem obsessed with % of the $1.289 Trillion loan market. Statisticians know that although the sample may show a low % it could well be a KEY INDICATOR of widespread abuse and even Lawyers, Economists and Senators understand that one. One commented even one complaint can be an indicator but 800 is significant when 100% are fraudulent. Why would I lie about something like this? Are you suggesting as a credible witness in Parliament (and in Courts) I am lying to Parliament? We placed some of the documents on our website for journalists to see the pattern and make their own decisions. The point is the average age of the people are 55-90 (over 80% of the total). The average loan is approximately $600,000 but vary from $300k to $4 million and majority of these people were on incomes of $50,000 or less when the Lenders approved these dirty loans. At best its an infringement of the regulations contained in the Australian Bankers Code s25.1 re affordablity. If you work at ASIC or APRA Captain, you can now see why these regulators are being canned right now, surely? Banks are settling these loans where BFCSA Members are involved. Why would they do this if toxicity not present?

    Your wrong assumptions again surface in the idea that these are 5 year loans. Aha. Wild assumption that these were business loans. Not at all.....very few So why the Bankers' need for ABN's for a Day marketed by lenders direct to Brokers (read the emails on site)? These people are not business people. The product was twisted to fit............by the Bankers. Why use the service calculator? These people had low incomes and paid little tax. How is someone of 70 years old with a 30 year loan going to pay off loan to completion? Buffer loans were provided and refinancing deals between the banks...........picking up each other's dirty underwear. When borrower defaults, usually after 5 years of buffer monies, loans implode but appear in bank audits as "settled" as most people do not belong to BFCSA, homes seized and as long as bubbles keep going the $500k home (owner paid $100k for and had paid off and owned) has increased in value over five years and that is when banks move in for the kill. The 7% loans have jumped up to 18% in final years of default.....sounds like lost of lovely profit to me. The $350k debt within five years of gouging fees becomes a bank calculated $550k loan. That sounds like BANK PROFIT to me and worth lending in TOXIC FASHION. Bank wants to prick the property bubble and cannot. Banks control the entire market so they can prick the bubble at any time.....................executives have admitted that to me: "time to prick the bubble...." Banks do profit from defaulting loans - ask the members about their own statements. There are laws to protect consumers, but Captain this is a world wide phenomena and trust me, banks and their wretched lawyers are whacking fees to statements when four years in default. They even THEN try to cut a deal to add on 7.9% interest on to the default costs....................................Do you want me to place these documents up on site? I can do. Last point Captain...do you really believe banks are so silly, they would pay massive commissions to keep the Low Doc loans pumping through the system if not profitable?

    As to whether I have moral fortitude...................I leave that to everyone that deals with me. People are entitled to opinions. I give a few of my own but mostly I deliver FACTS and DOCUMENTS, including to the Federal Parliament.

    BTW Captain, APRA and AOFM admit only 10% of Mortgages are Low Docs, but do we trust that figure? But accepting the current version of 10%, means $100 Billion market. If, as according to our surveys of members, we have 100% of that figure as being toxic that is a very grave issue, seriously in need of an inquiry. If we have 18% of FULL DOCS are toxic, then ditto. That is for the Parliament and the Senators to delve into. We know that over $400 million worth of loans are toxic so you want to say that only 0.4% of Low Doc loans are toxic. BUT the problem that everyone learned person I have spoken to seems to understand is the WHAT IF. If 100% of loans surveyed in the sample of data we collected are toxic, and no phone calls were received and no LAF copies handed out and no service calculators surfaced, then WHAT IF the rest were manufactured as financial products and treated in the same manner? We know that banks marketed the products to INTENTIONALLY TARGET ARIPS................asset rich and income poor. This strategy was not made up by Brokers. The genesis of the target market came from the Banks.

    Why? Why did banks deliberately TARGET poor income families? Oh I see because they had an ASSET - their only asset, their home? Isn't that criminal fraud? Knowing they could only afford payments via buffer monies? That's OK with you Captain?

    Macquarie boasted a $50 Billion new market and $100 Billion was tapped into.....not my figures Captain.........bank figures.
    So do we say ah well only 0.4% have been discovered so we will not check and open all the other doors - just in case there is an elephant in each room?
    Do we say IT's highly possible, given the above the Banks have amassed $100 Billion of TOXIC SUB PRIME LOANS by targeting innocent low income older people?
    or your version that its only 0.4% and there can be no more because the person who found the sub prime activity in major banks, has no moral fortitude and is practicing self grandiosement?

    Seriously Captain, I gave all these figures to Parliament last year except that we had found 400 cases, and months later we have found double that number. Sadly, Captain there are no bets because betting is silly. We simply seek the TRUTH and what is wrong with that?
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Guest Monday, 21 September 2020