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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; Who says this is a healthy mortgage market???

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Following the Money

Wednesday, 21st August 2013
– Buderim, Queensland
   By Nick Hubble

  • The following are extracts from Nick Hubble's newsletter relating to Banking

--"Australia’s corporate behemoths are publishing results left right and centre. It’s tough to know what to make of the deluge of information, and there’s a lot of shuffling going on. But a few clear trends are emerging...."

--"It’s not just the mining industry that’s looking shaky.

--Suncorp Group’s statutory net profit fell 32% after making a $632 million loss on the sale of its bad loans to Goldman Sachs. Why would a bank take a $600 million plus hit on loans in a healthy mortgage market? It wouldn’t.

--Meanwhile, QBE upped its mortgage insurance premiums big time. The reason for the 9% increase is fear. The company is forecasting ‘volatility’ in the housing market in the next few years. And we know what can happen to financial insurers during ‘volatility’ in the housing market, don’t we AIG?

--Banking Day is reporting that QBE will stop offering mortgage insurance in New Zealand altogether. Given the collapse of the debenture market over there, that’s not a surprise. As Greg Canavan asked in an email round robin this morning, is New Zealand the canary in the coalmine for Australia’s mortgage market? We’re getting enough hints from failing debenture companies here in Australia. And now a major bank and a mortgage insurer are twitching.

--In case you’re wondering, mortgage insurance protects banks from loan defaults. Part of our story on the LAF scandal is that mortgage insurers are being shafted. They think they’re insuring bundles of prime loans based on the mortgage paperwork, when all that paperwork is fiction. As a UK mortgage broker admitted, mortgage brokers were specifically trained in how to turn their subprime borrower into a prime one by falsifying income. One imaginative method includes inserting a ‘1’ in front of you borrower’s $30,000 income, suddenly making them able to afford a $400,000 loan. The same is going on here in Australia.

--So when vast amounts of borrowers begin defaulting, who will pick up the tab? Will the insurance companies go after the banks and mortgage brokers for misleading them?

--If there’s going to be ‘volatility’ in the housing market, the builders will suffer too. Surprise, surprise, Boral’s statutory net loss came in at $212 million. It’s our biggest building materials provider and it’s struggling in an economy with overpriced housing.  In every other market, high prices boost supply and profits for suppliers...."

"--So the miners and banks are showing signs of a slowdown while gas is becoming rather profitable.

--Then again, all this is just accounting. To illustrate how much you can trust earnings information, here are a pair of headlines from the Age and Business Day:

  • Boral posts $212m loss
  • Cost cutting buoys Boral profit"




Nick Hubble+
for The Daily Reckoning Australia  

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