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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: Major Banks permit 107% LVR Mortgage Loans but crackdown on Parent Guarantees

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ANZ cracks down on loan guarantors, despite affordability woes

by Julia Corderoy21 Jul 2016
ANZ has cracked down on lending policies governing loan guarantors, limiting the leverage that family members can take on to assist first home buyers, despite new data showing housing is more unaffordable than ever.

In a note sent to mortgage brokers, the major bank said it would be limiting who can act as a guarantor to family members only from August 1, as well as limiting the number of family guarantors a borrower can use to just one. Previously the security guarantee was available to anyone.  

Loans will also be capped at 107% of the property price, including stamp duty and transaction costs, and total lending against the guarantor’s property will be capped at 70% of the fair market value of the property. 

The changes will also require the maximum amount of limited guarantee to be 50% or less of the fair market value of the property the guarantor is providing as security. This means guarantors who own their home outright can only use up to half of the house’s value.

The bank said it reviewed its security guarantee policies to “help ensure more first-home buyers can access the property market sooner” but also to protect the security provider “in case something goes wrong with the first-home buyer’s finances”.

However, these changes come despite The Household, Income and Labour Dynamics in Australia Report (HILDA), released yesterday, showing that entry-level properties are more expensive than ever and home ownership is dropping. 

The report revealed that the number of owner occupied households dropped to 64.9% in 2014, from 68.8% in 2001. Home ownership among Gen Y – those aged between 25 and 34 – declined from 38.7% in 2002 to 29.2% in 2014. 

In addition, the 10th percentile of homes – or the cheapest in the market – had grown 108% in value between 2001 and 2014, compared to a 47% growth for 90th percentile properties at the top of the market.

“An implication of this finding is that housing at the ‘affordable’ end of the distribution appears to have become relatively less affordable between 2001 and 2014,” the report states.
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