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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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Gaden's: Jon Denovan slam dunks Denise Brailey BFCSA

Posted by on in ROYAL COMMISSION URGENT
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Jon Denovan, Partner, Sydney

We summarise the key findings about mortgage lending in the Senate’s Economics References Committee’s report ‘The Post GFC Banking Sector’ tabled on 28 November 2012.

The GFC lead to significantly less appetite for credit amongst households and businesses. Banks generally tightened their lending criteria. As a result, both wholesale markets and retail markets repriced risk. One apparent outcome was an increase in the price of small business loans.

The number of disputes referred to EDR increased, with the biggest increase relating to financial difficulty. However, this increase largely arose from the commencement of the NCCP Act rather than the GFC.

The report noted some unease about certain aspects of consumer lending including for example predatory lending and higher LVRs.

A number of instances of loan fraud and inappropriate lending were discussed, and the Committee appeared satisfied that they formed a very small minority of loans.

Specific issues regarding low-doc loans were raised. The Committee heard allegations that there is a potential for a significant amount of loan application fraud and lending maladministration for low-doc loans. These allegations were principally made by Ms Denise Brailey of the Banking and Finance Consumers Support Association.

The Committee noted that the regulation of low-doc lending changed with the introduction of the NCCP Act on 1 July 2010 requiring responsible lending. The Committee was satisfied that the responsible lending obligations are having an impact. It also noted that so called low-doc loans often involve quite a substantial amount of documentation. ASIC reported that it saw improvement and continues to see improvement in relation to responsible lending.

On the specific claims raised by Ms Brailey, ASIC advised that “It has not identified widespread evidence of systemic misconduct in the banking sector along the lines suggested”. It was noted that ASIC had requested Ms Brailey on a number of occasions to provide ASIC with additional information and specific evidence of falsification of documents in the banking sector, but this evidence had not been forthcoming.

The Committee also noted that, encouraged by Ms Brailey’s website, a number of borrowers had written letters generally making broad allegations of misconduct but which do not contain any specific evidence of the alleged misconduct.

The Australian Securitisation Forum pointed out that Ms Brailey’s claims ‘lack credibility based on the absence of significant defaults arising from such loans’.

Ms Brailey also suggested that the government is holding tainted securities and profiting from them in the AOFM fund. AOFM officers advised the Committee that the vast majority of loans were mortgage insured, its portfolio was performing very well, and that less than 2% of AOFM’s investments are linked to low-doc loans.

The Committee was concerned that there had been consistent abuse of low-doc loan facilities, albeit in a small percentage of total low-doc loans issued. However they were also satisfied that the responsible lending requirements “appear, at this time, to be effective in placing much greater obligation on lenders and brokers to verify income and the borrower’s capacity to repay a loan”.

In its conclusion the Committee stated that “it wishes to ensure that the regulatory settings in the financial sector relating to business lending encourage entrepreneurial activity and allow sufficient flexibility for parties to enter into agreements that best suit the particular circumstances of the commercial operation. Rather than recommence… government intervention for small business finance, the Committee considers it would be preferable for the industry to work on solving the evident problems”. A code of practice specifically relating to lending to small businesses was recommended. The key issues should be addressed in such a code:

  • The ability to change facility terms should be clearly explained. 
  • Initial valuation reports associated with the purchase of a small business should be relied on for a reasonable amount of time, such as for the first two years of the loan, unless a major defined shock or event occurs.
  • Borrowers should automatically be provided with copies of any valuation reports they have paid for or which the lender intends to rely on to demonstrate that the borrower is in default.
  • Borrowers should have the right to challenge a bank ordered valuation by commissioning their own valuation.
  • Very short periods for repayment demands such as 24 hours are inappropriate.
  • The value of claims for small business loans at EDRs should be increased to $2m (currently $500,000).
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  • doyla66
    doyla66 Sunday, 02 December 2012

    So the points beelow have to be addressed.

    I note that "A number of instances of loan fraud and inappropriate lending were discussed"

    Question
    Is it not the duty of a lawyer to point out any fraud or to withdraw from a case if fraud is involed.
    So the question is how many cases over the years did the lawyers not report fraud? Surley not one case was found.

  • doyla66
    doyla66 Sunday, 02 December 2012

    BFCSA IS ruffling a few feathers

    UNFOUNDED:
    The number of disputes referred to EDR increased, with the biggest increase relating to financial difficulty. However, this increase largely arose from the commencement of the NCCP Act rather than the GFC.

    Trivalise Play down & minimize:
    The report noted some unease about certain aspects of consumer lending including for example predatory lending and higher LVRs.

    BullS##T Deflect & Sidestep:
    A number of instances of loan fraud and inappropriate lending were discussed, and the Committee appeared satisfied that they formed a very small minority of loans.

    UNTRUTH Deflect & Sidestep miss describe - they were shown documentary Proof:

    Specific issues regarding low-doc loans were raised. The Committee heard allegations that there is a potential for a significant amount of loan application fraud and lending maladministration for low-doc loans.

    OVERLOOK the past, the issues & problems it caused, side step:
    The Committee noted that the (NCCP) regulation of low-doc ....requiring responsible lending.
    The Committee was satisfied that the responsible lending obligations are having an impact.

    OVERLOOK the past, no doc loans were the norm. only doc required a mortgage:
    It also noted that so called low-doc loans often involve quite a substantial amount of documentation.

    Conformation of past irresponsible lending:
    ASIC reported that it saw improvement and continues to see improvement in relation to responsible lending.

    HEARSAY QUOTE someone else even if their incorrect:
    ASIC advised that “It has not identified widespread evidence of systemic misconduct in the banking sector along the lines suggested”.

    HEARSAY Lawyer Speak without background knowledge make out Denise is a liar:
    It was noted that ASIC had requested Ms Brailey on a number of occasions to provide ASIC with additional information and specific evidence of falsification of documents in the banking sector, but this evidence had not been forthcoming.

    HEARSAY Lawyer Speak without background knowledge make out that BFCSA members are crackpots:
    like were all going to front up with all our detailed evidence & sink our own boat

    The Committee also noted that, encouraged by Ms Brailey’s website, a number of borrowers had written letters generally making broad allegations of misconduct but which do not contain any specific evidence of the alleged misconduct.

    HEARSAY:
    The Australian Securitisation Forum pointed out that Ms Brailey’s claims ‘lack credibility based on the absence of significant defaults arising from such loans’.

    OVERLOOK the past, the issues & problems it caused, side step: "Well our team at Gaden's sweeps the corruption under the rug & bankrupts these people at their expense"The Committee was concerned that there had been consistent abuse of low-doc loan facilities,

    HEARSAY UNFOUNDED: albeit in a small percentage of total low-doc loans issued.

    WHERE IS YOUR CONSCIENCE John Denovan?
    The Lord Judges all by their actions "Hells Firey Gates awaits YOU!!"



    http://www.gadens.com.au/whoweare/ourpeople/PublishingImages/Jon%20Denovan%20THUMB.jpg
    Jon Denovan
    P +61 2 9931 4927
    [email protected]
    Jon’s primary focus is on regulation and compliance for the financial services industries. Many of Australia’s leading lenders rely on Jon and his team’s creation of documents and procedures manuals for their retail, commercial and corporate lending and leasing businesses.
    In recognition of his contribution to the mortgage industry, Jon was made the first honorary member of the Mortgage & Finance Association of Australia (MFAA).
    Jon is recognised as a leading lawyer in financial services regulation in the 2012 edition of Chambers Asia Pacific.
    Jon’s significant expertise makes him a trusted authority on all forms of financial accommodation, the National Consumer Credit Protection Act 2009 (Cth) and the National Credit Code (Cth), trade practices and fair trading legislation. Jon is Australia’s leading authority on non bank lending, third party distribution agreements and mortgage and loan servicing.
    Complementing Jon’s finance expertise is his significant experience in the property industry. Many of Australia’s major property developers have benefitted from his structuring of some of their largest property projects and his thorough, yet straightforward, documenting of their complex joint ventures and other commercial arrangements. In doing this, Jon also applies his significant knowledge of taxation, stamp duty and GST.

  • doyla66
    doyla66 Monday, 03 December 2012

    Creative Bank$$$$ster

    Got to enjoy the quote: "Australia’s leading lenders rely on Jon and his team’s 'creation of documents'...YES Gadens very creative indeed...

  • doyla66
    doyla66 Sunday, 02 December 2012

    Sorry Jon Denovan, you're speaking in the same language of soft defensive generalities that we've heard from so many bureaucrats, in an effort to downplay the need to do something concrete and measurable to ensure that loose lending practices are not occurring, nor are breaches of the Banking Code.
    These illegal and ill advised lending practices did happen and from my own experience in 2010 they were certainly still happening, even if with a different Loan Application Form which appeared to be suitable for more accountability.
    Problem was that the broker made what could be described as a collection of risks based on his own assessment of probability. Without a diligent appraisal by the Bank in question - as banks took the word of the brokers, unbeknownst to me - the necessary checks and balances were not in place and I was the one who suffered for it until I found FOS and subsequently Denise Brailey. I have reported the details to the Bank, of course, and the matter is under discussion.
    If you happened to see either the Senate Estimates Committee or the Senate ERC Inquiry asking the most basic questions of representatives from ASIC you would wonder why anyone would hand years of serious research and reporting to them for a mature and honest appraisal. I certainly lost what little faith I had in the Chairman of ASIC and Commissioner Kell when I watched their "performance". I have experienced first hand more than one instance of ASIC mishandling of my carefully documented and researched complaints about 3 investment companies, a bank and a non-bank lender. I would not bother complaining to ASIC again until I was satisfied that they were actually going to take the complaint seriously enough to achieve a real result for me. I was totally misled by their "advertising" on the ASIC home page. I did receive an answer to two of these - 2 out of 5 is a pretty bad score even by ASIC standards.
    ASIC have downplayed the amount of Lo Doc Loan Fraud and Document Falsification evidence and correspondence they have received from borrowers. Mine was neither vague nor generic. One contained copies of specific documents, marked up for ease of error identification. Nothing waffly - just the facts. Naturally I will be taking that to the Police - along with the rest of my case files. Quite a lot of fraud for one person. Very clearly I didn't do it myself. How could I be so unlucky? Well, that's the nature of systemic fraud and my situation was gold standard AAA rated target market for both investment companies and lending institutions. What a collection! I'm still getting over the concept that Banks are committed fraud and I didn't see it coming and that regulators, Government officers, politicians and lawyers like yourself apparently think this is acceptable. I took every precaution possible including back up plans for loans and income. All failed, due to a culture of misconduct and deception, not just by banks but also by some in the legal profession as well. Totally amazing, I can tell you. Now I have to dig my way out of this latest complex web of shady deals where my long time legal adviser did something very wrong and lost my trust completely. Not a pleasant experience and quite an expensive matter to clear up.
    I know I'm just one person, but I was not a gambler nor a total fool with money, and even I was caught out by trusting Banks, AFSLs, ASIC and too many professional people on whom I had relied for years.
    I have come to the conclusion that there is something really wrong with Australia's lending and investment industry if I can get into so much trouble without noticing it happening.
    Don't worry - I'll work my way out of this using all the resources available to people like me: BFCSA research, FOS, COSL and disability support services to assist me in getting a job that I'm able to do.
    There are many more like me in BFCSA. Sadly there are many more to come.
    Could you suggest to the Banks that they take particular care to ensure that all income documents are checked properly and that all their staff are taught, as I was, that application forms are legal documents and must not be written on by lending staff as a general practice? That would have helped many of us to avoid the pitfalls of unsuitable lending practices. I'm sure, as a lawyer, that you would understand the importance of reducing risk and responsible lending. It's in the interests of both the banks and the borrowers and the Banking Code and the Law enshrine these assumed values.
    As for securitisation a good sized sample of borrowers have shown the relative and actual risks associated with inadequate auditing and recording of the details of the paper trails involved in the sequential processes. That's another area that could use a bit of old fashioned records management and respect for documentation like loan contracts. The consequences for investors is that they could very well end up with a Heinz 57 varieties of accurately and inaccurately rated securities. I don't consider that fair to them. Nor do I consider it fair for such dealings to go unbeknownst to me and without my consent, thereby increasing the risk to myself and to my home. There is no pretending it was otherwise (old loan from the early 2000's) nor that I "should have known".
    You and both can see there are areas where Banks can certainly tighten up further. I think they should be keeping a really close watch on all those new brokers and many of the older ones too, just to make sure there is nothing whatsoever that would breach the Banking Code going on. For all our sakes.
    As a future borrower, I think that's something I will be staying well away from. The risk factors are too high. Just like my father and my grandfather before him in business, if we can't pay cash we won't be buying.

  • Denise
    Denise Sunday, 02 December 2012

    Patience Jonno, your comments are consistent with your 2006 diatribe. All will be revealed. Just keep COSLing up to ASIC, that's a good boy. Do you really think I would take on your beloved Banksters, Parliament and the Regulators without the evidence? The reason we asked for a Royal Commission was to have a proper forum to dump the evidence on the table with an almighty bang.

    Ah well, we will do the same on the world wide web instead. At least there, it won't collect dust.

    Who knows, you may even see the funny side of the BIG REVEAL. At least the long suffering consumers could have a LAF at your expense.

    I have been waiting for you to enter the ring..... Come in spinner. [email protected]

  • doyla66
    doyla66 Sunday, 02 December 2012

    Australian Securitisation Forum Members List.. - Any familiar names in it???

    The Australian Securitisation Forum pointed out that Ms Brailey’s claims ‘lack credibility based on the absence of significant defaults arising from such loans’. Check out the ASF member list below:

    AFG
    AIMS Home Loans Allen & Overy AMAL Asset Management AMP ANZ Aquasia Ashurst Australian Ethical Investments Australian Executor Trustees Bananacoast Community Credit Union Bank of Queensland Bank of America Merrill Lynch Barclays Bloomberg Bluestone Capital Management Challenger Financial
    Citi Clayton Euro Risk Clayton Utz Clifford Chance Commonwealth Bank Credit Suisse Credit Union Australia CUSCAL Cygnus Advisory Deloitte Deutsche Bank Equitable Financial Solutions Ernst & Young FIIG Securities Firstfolio Capital FirstMac Fitch Ratings Flexigroup Fox Symes Genworth Financial Gilbert + Tobin Greater Building Society Henry Davis York Herbert Smith Freehills Heritage Bank IMB ING Direct Interactive Data Intex Solutions Investec Bank Australia J.P. Morgan Australia King & Wood Mallesons La Trobe Financial Laminar Group Liberty Financial Lloyds International Macquarie
    ME Bank Minter Ellison Moody's Investors Service Morgij Mortgage House of Australia MyState Financial National Australia Bank Natixis Norton Rose Australia Pari Passu Pepper Australia Perpetual Peter Hodgkinson
    PricewaterhouseCoopers QBE LMI Queensland Treasury Corporation Realm Investment House RedZed Lending Solutions Resimac RP Data Standard & Poor's Stargate Corporation Group State Street Bank & Trust Company Suncorp Bank The Royal Bank of Scotland Toyota Finance Australia Tyndall Capital UBS Victorian Mortgage Group Westpac Banking Corporation Wide Bay Australia

  • doyla66
    doyla66 Sunday, 02 December 2012

    Of course they are going to say there are no fraudulent loans,they are the only ones that really know.
    Judging by the list above.
    By the way they are probably not counting our loans as lo doc,we borrowed way less than 80% LVR,it was a home loan on their books but classed as an investment loan for court purposes,just another little angle.
    Mr Denovan happy to send you a copy of my documentation,but as Gadens represented the Bank against us you already have them all,I urge you to have a read of the affidavits supplied by Mr Bankster and the supporting documentation,the solicitors also have a great deal to answer for.This was supposed to be a simple possession case remember that while reading.

  • doyla66
    doyla66 Sunday, 02 December 2012

    Gadens
    Acting on behalf of the MFAA advising lenders, aggregators, mortgage managers and brokers on all aspects of the National Consumer Credit Protection Act and Code.
    That means they:
    Lie
    Cheat
    Steal
    Fraud

  • Denise
    Denise Sunday, 02 December 2012

    A typical Denovan Quote: "Many lenders go to significant trouble to ensure the loans they make are not regulated by the UCCC.........unregulated are riskier than regulated." Well you and your colleagues would know what your lender clients were up to........we are now on clean up duty....cleaning up the mess made by your Maxed out Mates. Sounds like you were warning broker/agents perhaps, to take on the unregulated favorites for obvious reasons? Feel free to deliver and updated explanation to those targeted by your firms clients.....particularly those aged 70 and over.... [email protected]

  • doyla66
    doyla66 Sunday, 02 December 2012

    This sentence by Gadens is a VERY MISLEADING, in fact LIE. "....a number of borrowers had written letters generally making broad allegations of misconduct but which do not contain any specific evidence of the alleged misconduct." This is a total LIE.

    IMPORTANT NOTE : Gadens are also trying to play down the seriousness of our complaints by changing the wording to 'MISCONDUCT' rather than calling it the FRAUD that it is.

    Please note for the record: We are not making 'broad allegations' of 'MISCONDUCT', we are making specific, very serious, formal complaints of FRAUD.

    FRAUD is a CRIMINAL OFFENCE. JAIL terms of 10 - 15 years are applicable.

    We have ALL the DOCUMENTARY EVIDENCE of FRAUD which has been documented & numbered in my affadavit to the Australian Federal Police, who are investigating this CRIMINAL OFFENCE.

    I state this again for clarification purposes & for any undecided or disbelievers of our cause:
    WE have ALL the DOCUMENTARY EVIDENCE of FRAUD.

    We are happy to have this DOCUMENTARY EVIDENCE of FRAUD examined & analysed by any police force, lawyers or courts in the country.

    We have nothing to hide - the Banks have everything to hide.

    This bank corruption must be stopped. The attempted corruption by the Lawyers must be stopped.

  • doyla66
    doyla66 Sunday, 02 December 2012

    Wasn't it Jon's emails over the years to brokers that we used as evidence to FOS to establish that the broker was the agent of the banks? Ah Yes it was..!!!

  • doyla66
    doyla66 Monday, 03 December 2012

    Hello Jon, What are your actions as a lawyer when there is full blown fraud involved?

    Oh, that's right. You remain actively engaged & involved because you foolishly believe that your clients are way too big to get busted by a seemingly insignificant federal government! I'm fairly sure I have gotten that right.

    It says an awful lot about your scruples as both a person & a lawyer. Snake's belly? How much lower can you go?

  • doyla66
    doyla66 Monday, 03 December 2012

    Went to Broker News as this was published on their website too. Hmmmm..!! Interesting not only NO comments about his article on there, but it did not even rate in the most discussed topics area. Jon - I think the broker's have woken up to you and your antics. It is evident they no longer trust anything coming from your mouth and think it is not even worth commenting on. Good on you brokers!!

  • Denise
    Denise Monday, 03 December 2012

    Broker News readers are bored with Denovan's drivel. WE are not surprised there are no comments. [email protected]

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