BFCSA Blog

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If any of you are in any doubt that Banksters considered the Broker to be their Agent to fulfill the Bank’s statutory obligations under the Privacy Act 1988, take a look at this letter from RAMS Legal Counsel.  Circa 2006.   RAMS "A Better Way?"  Not from where I am sitting!  My basket is full to the brim with dodgy RAMS' loans.   This email address is being protected from spambots. You need JavaScript enabled to view it.  ...

Get ready for some classic statements in this email From Gadens Lawyers (see Hall Of Shame) .  Here's one to get you started:  "Moreover, the court held that "provided the formalities were observed... the lender was.... indifferent to the underlying factual situation".   You can't miss it !  Enjoy! ~~~~~ From:  Gadens Lawyers E-Update [This email address is being protected from spambots. You need JavaScript enabled to view it.]  OCT 2006      ...

Struggling to find Happiness? I've got your answer.  Found it yesterday in the carpark at Officeworks. Emblazoned along the side of an orange car: "Happiness is a Bankwest Home Loan.  Talk to your broker today". There.  You didn't know it was so easy did you? Who would have thought that a quick trip to Officeworks would have solved so many people's problems!...

It is lovely to see the Brokers and BDMs having a good time.  It might be their last for a long time...  Watch this video to see them all congratulating themselves    As seen on Brokernews.com.au...

20 September 2012 Page 1 of 11 SENATE ECONOMICS REFERENCES COMMITTEEInquiry into the post-GFC banking sector Questions on Notice taken by ASIC at the public hearing on 8 August 2012 Question 1 (Hansard Ref: p. 55) Senator CAMERON: When you say ASIC will act on issues if they are raised, theevidence we had from the previous witness [Denise Brailey] was thatcorrespondence had gone to ASIC seeking some support on the FirstMac andStreetwise issues and no support was forthcoming. Is that correct? Mr Kell: I am not in a position to comment on individual matters. What I can sayis that ASIC had some complaints brought to it about low doc loans. Theseinstances have almost exclusively, from my understanding, all concerned loansmade prior to the GFC and prior to the introduction of the national consumercredit protection regime in July 2010. In some cases they involve matters where afinance broker has been charged by...

  By Caroline Dann | 12/10/2012 6:00:00 AM |  ME Bank claims a recent spike in broker loan applications is a direct result of it slashing fixed rates. Loan applications from brokers more than doubled from August to September, from 9% to 20% respectively. The bank has one of the lowest three-year fixed rates in the industry, at 5.39% for its SMHL Standard Loan. Stewart Saunders, ME Bank’s national manager brokers, also attributed the successes in the broker channel to an increased presence across aggregator panels. “We’ve now joined the panels of 11 aggregators in the last 11 months, including three new aggregators in August – Connective, Choice and Plan – bringing the total number of accredited brokers to nearly 2,000,” said Mr Saunders. Saunders hinted that the bank was in “discussions” with more aggregators.   Comment: Watch for the crumbling effect……  ...

  By Caroline Dann | 12/10/2012 6:30:00 AM | In an unprecedented move, the Irish government will pass laws encouraging banks to substantially cut homeowners' debts. The move, aimed to reduce foreclosures and help thousands who are struggling, is being closely watched by the US to see if it is a viable preventative to a housing crash. Critics argue unscrupulous borrowers will simply take advantage of the bailout and stop making payments altogether. Before we get too excited, the government is merely making a suggestion: paying off or substantially reducing the debt will not be 'enforced' according to Ireland's justice minister Alan Shatter. Too bad.   ...

By MortgageMix August 22, 2012 The RBA might have lowered the cash rate to just 3.5% earlier this year, but it has done little to alleviate concerns for homeowners that job loss or rising living costs will cause them to lose their homes. A survey about Australian homeowners' greatest fear has found more than 25% are worried about becoming unemployed, and another 18% listed rising livings costs as their top reason to worry.   Mortgage broker network 1300HomeLoan said the results revealed the responsible nature of Australian borrowers. This is also reflected in our very low default rates on loans, it said. MD John Kolenda suggested that anyone who thinks borrowers are rushing in to take advantage of easy credit is mistaken. "Australian borrowers are very prudent and cautious about taking on debt they can't repay," he added. "These results show that homebuyers are very preoccupied with their ability to make...

    By Caroline Dann | 9/07/2012   Experts believe Japan’s Sony Bank is unlikely to pose a threat to mortgage brokers, following last week’s announcement of its plans to launch in Australia.   Sony Bank is an online business which, in theory, cuts out the need for brokers with its direct-to-lender approach.   Speaking to Australian Broker Online, SAKS Consulting’s principal, Steve Patterson, was sceptical of its impact on intermediaries.   “If brokers do their jobs properly, and are there to help people through the biggest financial decision of their lives, there will always be a need for them,” he said.   “It’s a complicated process, and most people welcome someone on the other side of the kitchen table to explain everything.”   Patterson believes the Big Four have too much of a stronghold on the market to be sidelined by a foreign bank.   “Firstly, new and foreign...

This information comes from the nMB Intell magazine. http://www.nmb.com.au/nmb/intell/aug12.html It seems that someone in the lending industry has been playing with words, like "financial counselling".  When the going gets tough, the industry gets creative? We're not immune from users of misleading statements, especially where there's a dollar to be made.  The highlights are my own.    The House of Representatives on Tuesday 26 June 2012 passed the Consumer Credit and Consumer Protection Legislation Amendment (Enhancements) Bill. The majority of the provisions are expected to commence in March 2013. Changes will affect all credit providers, however key provisions have been introduced for Small/Medium Account Credit Contracts (SACC & MACC), lenders.The bill is yet to be passed by the Senate, however it is anticipated this will occur during the Spring Parliamentary sitting (Aug- Sept 12). Changes affecting lenders: Changes to hardship provisions will make it easier for borrowers to make application. The changes will see the...

http://www.bfcsa.com.au/index.php/entry/sophisticated-nonsense-from-broker-industry-asic-s-latest-trick What a bunch of prize idiots ASIC are! - and their desperado lobby mates are sneaky and nasty to boot.  The NCCP protects all, not just the consumers. It's because the financial sector has exploited the consumers to the max and been caught red handed that the industry sees the NCCP as protecting consumers while all the dirty laundry is still being collected and attended to, one grotty piece at a time. This is another Bransgroves - blatant self interest for the "poor" accused perpetrators of large scale crime, fraud and sundry legal scams. I'll hold Greg while you hit him for me too, Denise.  Well there's no risk of my situation ever being termed "sophisticated" at any stage of the game - unless they've put the Loan Service Calculator over every source of income to try to turn me into a baby Packer! Just because people have acquired (e.g....

10/5/2012 - Australian Broker Online The MFAA has called on the government to ditch some of the disclosure documentation required by the NCCP. In a submission to Treasury on the proposed NCCP amendments, the organisation has asked the government to dump the credit quote, credit guide and credit proposal required from brokers, and instead combine the forms into one finance broking contract. The plethora of documents currently required has caused inconvenience for both brokers and borrowers, the MFAA claimed. “Each of these documents is required at a different stage in the transaction. The need to do these things at different times is a significant additional cost to brokers, and inconvenience and confusion to broker and customer alike,” the organisation said. The MFAA called the requirement for the three separate documents an “unexpected and avoidable” cost to brokers. It claimed that the disclosure required by the NCCP could easily be satisfied by...

http://www.mortgagesettlements.com.au/downloads/Mortgage%20Fraud%20Article.pdf With lax lending compliances and checking systems, such as exist with No Doc and Lo Doc loans, there maybe borrowers who were taught to take advantage of the opportunity to tell the Bank exaggerated detail, or so it seems.  This opportunity was created by the banks themselves, by offering a product that didn't involve the prudent checks and balances that any reasonable person would expect from a Bank or Lender in Australia.  Then there are the borrowers in our situation: we told the truth and even offered our documentation for checking, only to discover later that our honestly declared financial facts had been changed by bank staff or brokers. Without Lo Doc and No Doc loans it would be well nigh impossible to create a fraud loan... unless I've missed something?  Strict enforcement of all codes, regs and Laws should eliminate 99% of loan fraud. Banning of Lo Doc and...

Denise says we need the services of a hand writing expert......most LAFs in her experience and a recent survey have revealed three people's hand-writing on the documents:  the Broker and two others.  She has the proof that one of these is the credit assessor.....identified via the notes. Lenders don't bother checking loan application income or in fact any detail other than a  credit check Surely lenders can tell from the Loan Application Form who committed the Fraud? Message to Bankers: check the hand writing and compare with that of your staff...but of course you know that as higher up Managers taught you...."you can even resurrect credit impaired and rejected loans....make the deal fit by maximising loan amounts borrowed."    ...

Media Release: 24 August 2012How many Low Doc Loans are unethical?Attempts to deflect a Royal Commission into Australia's mortgage finance sector by the Mortgage and Finance Association of Australia are mistaken, hollow and shrill, the Australian Democrats said today.MFAA CEO Phil Naylor rejected the Royal Commission call and claims there is very limited evidence of fraudulent dealings by brokers in a 17 August statement that only came to light yesterday. ED:  Yes Naylor would say that...but he has yet to call me.....but like the banks who did not ring the borrowers to ask income details because they deliberately did not want to know yet continued to deny evidence!"I don't know whether to be appalled or bemused by Mr Naylor's caricature of my remarks," Democrats Housing spokesperson David Collyer said today. "He has me saying all sorts of things.""The evidence put before the Senate inquiry by Denise Brailey of the Banking and Finance Consumers...

By Larry Schlesinger  Monday, 20 August 2012 http://www.propertyobserver.com.au/mortgages/banks-negligent-and-reckless-with-low-doc-loans-denise-brailey-in-senate-testimony   Most of the low-doc loans banks provided to borrowers would have been rejected if they had made a "simple phone call to the borrowers”, banking consumer advocate Denise Brailey has testified before a Senate inquiry into behaviour of the banking sector post-GFC. But she says banks chose “in a corporate decision” not to make this phone call to ascertain the true financial circumstances of the borrower. Brailey, who runs the Banking and Consumers Finance Support Association (BCFSA), brought with her to the inquiry a “small bundle” of 4,000 “falsified loan applications", which she said includes applications to every bank in Australia. “The four majors are in there. “They are all responsible, through a series of emails from banks to brokers, instructing the brokers how to get their deals across the line — 'make the deal fit' was their usual interpretation." Brailey’s views...

By Philip Soos  Tuesday, 21 August 2012 The level of sub-prime mortgages in Australia may be far in advance of what was previously assumed and provided for by banks. The story was broken on the ABC, and covered elsewhere. The revelations centred around two personalities: Kate Thompson and Denise Brailey. Kate Thompson was a licensed mortgage broker at Mortgage Miracles in Western Australia. A highly regarded and award-winning broker, Thompson disbursed a veritable torrent of credit from bank and non-banking lenders to clients wanting funds to buy property, making around $5 million a year from upfront and trailing commissions. She is now facing fraud charges for what amounts to predatory lending: providing credit to people with little to no expectation they will be able to repay the entirety of the loan. This fraud was achieved by fudging the income and assets of clients, making them appear much wealthier on paper than was...

From MORTGAGE MIX - Thankyou to Tim Neary for this good article on the Royal Commission and Lo Doc Sub Prime Debate.    17 Aug 2012 Macrobusiness published an interesting article recently suggesting Australia’s claim to having a conservative (and safe) banking sector have ‘taken a bath’ recently, as evidence emerges of our own low doc driven sub-prime lending scandal.A video link from the article suggests in the run up to the GFC, Australian banks and other home-grown lenders abused the system of low doc loans; designed for small businesses but sold “by the thousands” to pensioners, single mums and people on welfare.It might sound shocking, but opinion on the subject is firmly divided.In response to the subprime scandal reference one reader left this pointed comment: “Sub-prime???? Pffffffft you guys are so 2007…”One of the industry’s leading low doc aficionados, Pepper’s Mario Rehayem, is also thumbing his nose at the notion. He has been ever...

It's good to see Australian Broker Online tackling the big concern sending shivers through the entire Industry. Thankyou to their writers, editor and the brokers for providing valuable feedback and information about what was going on from their perspective. Here are the links to the articles and comments related to the BFCSA allegations of Lo Doc Loan Fraud.   Poll: Did banks encourage fraud during boom times? A WA broker – herself facing fraud charges – has accused the nation’s lenders of being complicit, by encouraging brokers to commit fraud to get low-doc loans approved during credit boom times. Australian Broker is asking our readers to cast their vote. Did you see evidence of banks encouraging fraud? Yes or no? Have your say here! http://www.brokernews.com.au/article/poll-did-banks-encourage-fraud-during-boom-times-142522.aspx   TV: 'Overkill' evident in bank low-doc backdown Brokers have labeled bank reticence to write low-docs as an example of a knee-jerk reaction in an exclusive...