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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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NEW ZEALAND Bank Practices 'Predatory' BFCSA

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NZ bank practices 'predatory'

RICHARD MEADOWS

Last updated 05:00 25/08/2012

http://www.stuff.co.nz/business/industries/7545253/NZ-bank-practices-predatory

           

An Australian consumer rights activist claims New Zealand banks used predatory lending practices to profit from widespread mortgage fraud.

Denise Brailey has sparked calls for a royal commission into the Australian banking sector on the same issue, and hopes to head to New Zealand this year to continue her crusade. Addressing the Australian senate this month, she outlined the systematic abuse of “low-doc” loans during the pre-financial-crisis property boom.

Brailey has documents alleging the asset-rich and income-poor were specifically targeted by lenders in a grab for title deeds, with application forms doctored to push the loans through.

Brailey, the Banking and Finance Consumer Support Association founder, has "no doubt" the fraud occurred on both sides of the Tasman. Four of New Zealand's major banks are Australian-owned.

Of the hundreds of indebted New Zealanders she met on a visit in 2008, many were retirees whose loan applications had been falsified to inflate income details or to say they were self-employed.

Most had no real means to repay the loans, which were often taken out to buy into property investments such as the failed Blue Chip scheme.

“It appears the banking industry believes that the customer should be blamed for purchasing the faulty product [low-doc loans] in the first place,” Brailey said.

Major banks no longer advertise low-doc loans, and consumer law is being amended to strengthen responsible lending practices.

But it was a New Zealand mortgage broker operating locally who originally helped Brailey piece together a key part of the puzzle, she said.

He described bank officers visiting brokers to make sure they were using debt servicing figures on loan forms that would meet lending criteria.

“I was told if you didn't do it that way, you didn't make any money,” Brailey said.

This month a former award-winning broker in Australia admitted to the same fudging of figures. Kate Thompson, now facing fraud charges, said she received big commissions for inflating asset and income details to get loans approved.

"Hook me up to a lie detector test and hook them up," Thompson told ABC News. "I'll lay my evidence on the table. They will fail a lie detector test miserably. They are corrupt. They are protecting each other."

Australian senator John Williams has called for a royal commission, but New Zealand authorities have remained inactive.

Brailey met then-Commerce Minister Lianne Dalziel four years ago. “I can't say categorically to Dalziel that she did nothing, but it didn't go anywhere,” she says.

Lenders have been able to distance themselves legally from often grossly irresponsible lending through a chain of intermediaries.

The loophole was cemented in New Zealand by a landmark case between GE Money and Whangarei pensioners Bruce and Dorothy Bartle, who were lent $630,000 for a Blue Chip investment.

Like many others the Bartles' application form had been altered by a third party in order to secure a loan they had no hope of repaying.

An early victory in the Court of Appeal ruled the contract oppressive, but it was overturned by the Supreme Court, which said it would be wrong to hold GE culpable.

Bankers' Association chief executive Kirk Hope said New Zealand banks were responsible lenders, and had reduced their reliance on the mortgage broker channel.

“It's simply not in banks' interests to lend to people who they know are unlikely to meet their commitments,” he said.

- © Fairfax NZ News

 

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  • doyla66
    doyla66 Friday, 24 August 2012

    Great to see the word getting out to Kiwis. There will be much more said about this in light of fraud loans already being quashed in NZ.

    I hope no one over there believes the nonsense about it not being in the banks' interest to loan to those who are unable to pay. If they have a browse through the BFCSA website or a chat to any of the Senate Committee looking at the conduct of Australian Banks they will see how the banks benefit from the title deeds regardless of what the borrower does - and they still are. Banker Associations in Australia and New Zealand are talking what sounds like commonsense, but it's not the whole truth.

    If Banks around the world want anyone to trust what they say then they had better start telling the whole truth, not just the old standard lines. It won't wash with any of us now. It's too late for Banks to con us. We know.

    So hand over the title deeds, extinguish the fraud loans and get out of our lives. Over and over again the Banks have cost all of us so much more than money.

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