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Democrats ask: How many mortgages are fraudulent?

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Democrats ask: How many mortgages are fraudulent?

Media Release Monday 13 August 2012

The Australian Democrats call for a Royal Commission into Australia’s mortgage finance sector following criminologist Denise Brailey’s recent revelations to the Senate select committee on Economics.

“Her testimony of widespread, systemic financial fraud is credible and must be tested by the judiciary,” David Collyer Australian Democrats Housing spokesperson said today.

“There is a great deal at stake in this matter, not least the solvency and prudent management of Australia’s big four banks.

Ms Brailey gave evidence to senators that prospective borrowers sign a 3 page summary document to which bankers add their own calculations to make around 11 pages. That became the 'loan agreement' for legal purposes and for use by the Lenders Mortgage Insurance companies. She says borrower incomes and assets are regularly and systematically inflated to make the loans appear appropriate and repayable. The final full document is deliberately withheld from borrowers, even though it is the largest financial commitment in the lives of most citizens.

“Ms Brailey has uncovered many instances of bankster fraud. The USA precedents – called ‘liar loans’ - are well understood and have always been denied in Australia by the banks and our regulatory agencies.

She told the Senate committee: “…the government has bought $14 billion worth of RMBSs since the GFC and I understand has committed another $4 billion to further purchases. The Fitch ratings say that eight to 10 per cent of all these RMBSs (Residential Mortgage Backed Securities) are low doc and approximately are loans obtained by fraud, and the government is holding tainted securities and profiting from that fraud. We believe there is about $57 billion involved.”

Mr Collyer said: “The Australian people, regulatory agencies and parliament cannot be certain this figure is the upper limit of the bankers’ malfeasance. If the 11 page mortgage documents mentioned above are what bank examiners draw their confidence from, that opinion is based on a lie.

“Borrowers are fully liable to repay loans, even though these loans were extended by the banks with the knowledge borrowers would never be able to meet these heavy obligations. If Ms Brailey is correct, our banks have destroyed the financial future of an entire generation,” Mr Collyer concluded.

Australian Democrats Housing Spokesperson
This email address is being protected from spambots. You need JavaScript enabled to view it.
0413 248 193

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  • doyla66
    doyla66 Tuesday, 25 September 2012

    I have e-mailed David Collyer to confirm widespread LAF FRAUD. May I suggest that all members also do the same.

    Dear Mr. Collyer,
    Thank you for having the decency and ethics to call for a Royal Commission into the Banking & Finance industries.

    We must have a ROYAL COMMISSION immediately into the fraudulent activities of the banks.

    We too have been conned & deceived by the COMMONWEALTH BANK & Mortgage Broker using FRAUDULENT Loan Application documents, in both 2005 and 2007.

    This is a common business practice used by the Commonwealth Bank of Australia
    where they corruptly lend money using grossly falsified Loan Application Documents (that the client's have never seen),
    & conspiring with Mortgage Brokers (that the clients has never met), & going through Finance Companies (that the clients didn't know about), with the sole aim of the Bank being able to take the clients home.
    (Asset Lending).

    Then the bank tries to cover it all up, even refuses to supply copies of the Loan Application Documents,
    - Quote: " We can't give you copies as it would leave the bank open to prosecution."

    After 3 years of trying, I have all the other documentation, including the falsified Loan Application Documents.
    They were fraudulently falsified in our 2005 loan and even more so in our 2007 loan re-finance.
    Fortunately for us they were dumb enough to send us the 1st set of grossly altered documents - by mistake!

    I have also discovered that the bank (or the broker) even used FAKE Low doc declarations that they photoshopped/ cut & pasted together to get around the normal loan policies! I also have copies of these.

    One of the most shocking things about this is that the Financial Ombudsman Service (FOS) -who are supposed to protect the public from illegal or unethical banking practices - has disturbingly decided that : even though the bank may have known that the documentation was false - THE BANK WAS ENTITLED TO RELY ON THAT FALSE DOCUMENTATION!
    The FOS are blatantly biased in favour of the Banks. They have ignored key documentary evidence & overlooked much of the fraudulent information.
    My wife and I even discussed the possibility of 2 of the FOS investigating officials being bribed, such was our level of disbelief at the way they were constantly trying to justify the Bank's actions!
    At one stage, they stated that they knew that the income details had been falsified as we were receiving Family Assistance so therefore could not have been earning the income stated on the loan application, and were suggesting that the Bank should enter into a settlement conference, and were waiting for the Bank to respond. The next letter we had from the ombudsman was the final decision - in favour of the bank!
    Even more sinister the ombudsman also put in a clause stating that : if we accept the decision that we were to agree not to take any further action against the bank! This is how they try to protect the Banks, they are certainly not protecting the public against this fraud.

    We were actually advised by one of the FOS Investigating Case Managers who realised that important matters in the investigation were being overlooked in favour of the bank, to go to the State & Federal Police to make an official complaint against them for fraud, which is what we will be doing shortly.

    We are now at the stage where we have our Local MP backing us on this and we are currently talking to our State MP, before making an official complaint. We also have the full support of Mr. Russell White, of the National Federation of Independent Business. (NFIB.)
    (07) 5630 4432 0408 981 242

    I can send you a CD documenting all the evidence, or send you paper copies of the fraudulent documents, if you require.

    This widespread fraud must be stopped. It is a crime against the Commonwealth, it is a crime against the People of Australia.
    The bank executives must be held accountable for instigating this fraud & allowing the corruption to continue.
    Fraud is a criminal offence, therefore they must be prosecuted to the full extent of the Law.

    yours sincerely
    Wayne & Carol Styles
    0431 630 447
    (07) 5520 2071

  • doyla66
    doyla66 Tuesday, 25 September 2012

    Great letter, Wayne. Your case underlines the incompetence still occurring in the FOS, part of our great "justice" system. The competence of FOS staff is patchy. There must be consistency in their decisions across all such cases, surely. No wonder you'd be thinking they're on the take from the other side!

  • doyla66
    doyla66 Tuesday, 25 September 2012

    A lot more evidence has come to light since David Collyer wrote this.
    There is NO EXCUSE for the failure of our parliament to attend to this serious matter of FRAUD LOANS.
    Denial will not work. It will only get them into more trouble than they are already.
    Covering up and shredding the evidence, as some have, will not work.
    Everyone around knows about it.
    This is real.
    We have the evidence.
    So do FOS, COSL, ASIC and many others.
    The media have seen the evidence.
    The Australian courts have seen the evidence.
    The judiciary have seen the evidence.
    History will judge harshly the fools in public office who failed in their duty to the people of Australia.


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