I became aware of the BFCSA and Denise by accident.  I read about the deceitful practice by financial institutions of unconscionable Asset Lending where the security is the family home. I subsequently googled Asset Lending and the BFCSA web-site and Denise appeared (for which I am now very grateful).

Our story is one that makes me very embarrassed, sad and angry as I lost absolutely everything that my wife and I had worked so hard for over many, many years.  I feel a need to speak out about these frauds in banking.   I have always felt it unfair that I and my family were taken advantage of, but it’s only after looking at the BFCSA web-site and reading other similar stories like ours that I realised that I was not at fault, in fact I realised that I had been conned by the bank into a loan that was based on fraudulent false information that the bank provided so as to make the loan application "appear" correct "on paper".

Both my wife and I had previously invested in property, initially purchasing our first home in the late 1990’s. Over the next few years we worked hard to pay down our mortgage and build our equity. After a few years we made the scary move to acquire our first investment property, this purchased on the basis of being able to service both our home and investment loan. Over the next few years we slowly added a few more properties, and again these loans were based on our being able to service the loans through both earned income of my wife and I and also the rental income from the properties.

In early 2007 we then made the fateful decision to buy an expensive house in East Fremantle. We had been given the recommendation of a seller of mortgage loans (by the real estate agent) whom we then met and he presented very professionally and was very willing to help us. The house had a purchase price of $2.4m for which we had to borrow $1.5m. The loan broker did everything for us, nothing was too much trouble. At the time both my wife and I were unemployed, my wife by choice to be a stay to home to our children and I had been out of work for 9 months and remained unemployed for a further 9 months.

Excluding this new purchase we had accumulated property worth approx. $3m and had loans worth approx. $1m, so we had around $2m in equity (on paper). The loan paperwork flowed from the broker and in April 2007 we became the proud owner of our dream home … or so we thought. 

At the time I did wonder how, with our low income, we were able to afford such a large loan, I trusted the the bank and assumed that they had the final call in approving the loan. At the time I also questioned how the LAF income figure of $625,000 had been determined as it seemed incredibly excessive and incredibly wrong. The broker agent's response was that this figure was calculated by the bank included the annual capital growth of our properties and was based on the “fact” that property values always go up …. This did seem somewhat strange to me, however I trusted the broker and figured the bank would do their due diligence and confirm this figure before handing over $1.5 million to us.

We entered into an interest only Lo-Doc loan with Homeloans Ltd (the Manager) & Permanent Custodians Limited (the Lender) and received approval for the $1.5m and four line of credits (I'm not sure why there were four but again I trusted the Lender and its agent ie Homeloans and assumed this was standard practice for interest only Lo-Doc loans). 

We fell into financial difficulty in the first year with late payment penalties being incurred. The lines of credit were all consumed by paying interest on the Lo-Doc loan until there was nothing left.  We now know these are the buffer loans.

Our loan seller then suggested anoterh financial straqtegy - that we refinance on our other properties, which we did. The money from refinancing went into paying the Lo-Doc loan until there was nothing left. We were then left with having to sell our investment properties very quickly, there was little cash left after each sale and any cash went directly to Homeloans to pay never ending interest on the Lo-Doc loan. We had a further problem here because on paper the ATO was recognising we were making capital profits so we then had the ATO chasing us for capital gains tax for paper gains that in reality did not exist as all the money had been consumed by Homeloans with interest payments. Lots of incredible stress at this point !!!

The next stage was the bank imposing legal action which led to me extracting all my superannuation ($70,000) all of which went direct to Homeloans, APRA allowed me to access these funds under their hardship provision. Yet more stress and worry but this brought us a few months breathing space from the bank to the sell our last remaining asset, our home, it went to auction and sold for $1.785m, we took a huge loss but at least the pressure and stress being imposed by Homeloans was finally gone. All up this took 33 months to hand over our entire life savings, in fact we ended up in debt owing the ATO $30,000 in tax (that we could not afford to pay).

Fortunately we had a friend with a spare room that my family of five took up residence, sleeping on camping mattresses. It took about 6 months before we could afford to save enough money to get into a rental property. More than five years on we are still living in a rented property and daily life is a challenge, but we survive.

Now we reflect back on this experience we do wonder how and who put the wrong income figure on the LAF. When we recently asked for a copy of the LAF from Homeloans we noticed that the pages were incomplete with pages missing and entries on the LAF by four different people (not including my wife and I). The LAF noted that I was self employed for 7 years, I have never been self employed.

The mortgage seller had me sign a declaration that I was self employed, I did question this at the time and the broker said this was "just another form, one of many that the bank needed to get the loan approved", the broker/agent of the bank never conveyed the importance of the declaration and the fact that this would be THE SOLE DOCUMENT that the bank would use to approve the unverified loan, incredible !!.

The bank did no due diligence, the declaration was all that they relied upon to hand over a huge sum of money:$1.5 million plus and we were unemployed with three children.

Homeloans did no due diligence before handing over $1.5 million, they did not check tax returns or assessments or business financial statements or evidence of income or evidence of employment, any of which would have revealed that I was not and have never been self employed. If Homeloans had done some simple checking they would have realised that we did not have the means to service the loan (we did have assets that if sold would have paid out the loan, it would seem our $2 million equity, our super, our asset was the prime focus of the bank, falsifying the income by the seller using the bank's calculator as a tool to get the LAF in order for the bankers to take over our funds by forcing us to sell, which we reluctantly and sadly did.

The service calculator - we now know from BFCSA - was developed by the banks for sellers to enable them to have the computer program develop an exaggerated futuristic income.  We did question this.  I know they did no due diligence because I was later sent a complete copy of the Homeloans Loan Journal which notes their sole reliance on the self employed declaration, and nothing else ...   ASIC permitted this to happen.

33 months and our financial well-being and that of our children - by incorrect and harmful financial advice sent our family into stress, chaos and ruin. 

We were never going to be in a position to service this loan, over many years it has been hard to comprehend why a bank would lend such a large sum of money to a family who could clearly not service the loan. At the time of the loan we had the equity on paper to pay out the loan however this would have required us to sell our assets. Why did Homeloans lend us money on this basis ? Why didn't Homeloans carry out some simple checks to verify our inability to service this loan ?  This was purely an asset lend......and we now believe was unlawful.

We would like to see justice done. We would like to see the truth come out and have the bank brought to justice for fraudulently putting together a scheme to steal our hard earned money. My family deserves to be compensated for the criminal and deceitful act that the bank inflicted. Homeloans put my family into a position of extreme hardship and they did so willingly and heartlessly. They need to be held accountable for their actions.

I have learnt that we are not alone, that we are not the only ones conned by the banks. Through the incredible work of Denise and the BFCSA there will be justice done.  Now is the time to stand and be heard. Now, more than ever, we have an opportunity to be heard, if we do so there will be a Royal Commission and then justice will be the outcome, if we do not take this opportunity then it will simply pass and the banks will win and the banks will continue to make huge profits at the expense of hard working families like mine, and yours.