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BFCSA
MORTGAGE
DISTRESS SOS

What BFCSA Does...

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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BFCSA Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Recent blog posts
APRA demands banks, insurers act on climate risk Australian Financial Review Mar 20, 2019 1.52pm James Fernyhough   It is no longer good enough for banks, insurers and superannuation funds to disclose climate risks, they must take action to address them, the Australian Prudential Regulation Authority has warned. APRA, the regulator charged with overseeing the soundness of Australia's financial system, said on Wednesday it would "increase its scrutiny" on how financial services companies were changing their businesses to protect themselves against the physical, regulatory and economic effects of climate change. "The world is rapidly transitioning to a low carbon economy, driven principally by the decisions of governments, business leaders, investors and consumers. Companies that fail to respond to these forces risk being left behind," APRA's head of insurance Geoff Summerhayes said. "Gaining an understanding of the risks is an important first step for entities, but APRA wants to see continuous improvement...
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ANZ scraps sales targets for tellers Australian Financial Review Mar 20, 2019 2.30pm James Frost   The performance of ANZ's bank tellers will no longer be measured against sales targets as the bank extends a successful trial to scrap financial targets across it network of 600 branches from April 1. ANZ has been running trials that removed sales targets on and off for almost five years, but the feedback from a trial held last year across an entire city was overwhelmingly positive. An email obtained by The Australian Financial Review says the change will allow bank staff to perform their roles without the distraction of sales targets and will be rolled out on April 1. ANZ's general manager of retail distribution, Paul Presland, said in the email to staff the bank had come a long way in improving the customer experience and scrapping sales targets was the right thing to do....
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Downturn crunches SME loans, top regulators warn Australian Financial Review Mar 20, 2019 11.34am Patrick Commins   Financial regulators are concerned that tighter mortgage lending standards and falling house prices are further crimping the ability of small businesses to access credit. "Members observed that new lending to small businesses has slowed over the past year," a statement released Tuesday by  the Council of Financial Regulators statement read. "For many small businesses, personal and business finances are intermingled," the statement read. "As a consequence, the higher standards that lenders apply to personal borrowing are affecting some small business loan applications." The CFR is the peak coordinating body for the country's most powerful financial regulators. It meets every three months and includes representatives from the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission, and Treasury and is chaired by the Reserve Bank of Australia. Sydney house prices are now 13 per...
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Sydney prices could fall up to 30pc Australian Financial Review Mar 19, 2019 3.50pm Su-Lin Tan   Sydney's house prices could fall by up to 30 per cent when the downturn is over if its decline doesn't slow down by the third quarter of the year, BIS Oxford Economics warns. In its bi-annual forecast in Sydney on Tuesday, the research group says given the negativity of the housing sector, house prices could fall between 20 to 30 per cent in nominal terms, or up to 35 per cent in real terms, especially if quarterly price falls in June and September this year remain at around 2 to 2.5 per cent or more. The full peak to trough price fall of 25 per cent over the full downturn - with the peak in June 2017 - has been bandied about previously. AMP Capital chief economist Shane Oliver has long held that Sydney...
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RBA urges lenders to loosen up, but downplays risk of credit crunch The Australian 2:35pm March 20, 2019 Paul Garvey, David Rogers   Reserve Bank assistant governor Michelle Bullock has urged the nation’s “stingy” banks to “loosen up” their lending practices amid the slowdown in Australian housing and credit markets. The call came as she downplayed the risk of a credit crunch in Australia. Speaking at an Urban Development Institute Australia function in Perth, Ms Bullock said the RBA was trying to encourage the banks to take on more risk and step up their lending to would-be property buyers. “My hope, now that the royal commission has finished, and now that APRA has finished and is removing its benchmarks, that banks will start to lend again.” She added: “I don’t have any silver bullet, unfortunately. “All I can do, all the bank can do, is continue to encourage the banks ......
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Bond markets ignoring wages pick-up: RBA Australian Financial ReviewMar 19, 2019 6.29pm Jonathan Shapiro   Reserve Bank assistant governor Chris Kent says bond markets are underestimating the risk of wages growth stoking higher inflation, as long-term Australian bond rates fall towards historically low levels. Last week, the Australian 10-year bond rate declined to below 2 per cent, prompting some economists to suggest the markets had lost faith that the central bank could restore the inflation rate to within its target band of 2 per cent to 3 per cent. But Dr Kent said lower Australian bond rates were part of an "international phenomenon", as data showed global growth was slowing while a lower oil price had kept headline inflation rates down. "There is just no risk built into these rates for any increase in inflation and yet we see wages growth trending up around the globe in a situation of fairly...
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Australia could be ‘first domino to fall’ in next GFC news.com.au March 19, 2019 4:01pm Frank Chung   Australia could be the “first domino to fall” in a global economic crisis for the first time in its 200-year history. That’s according to economist John Adams, Digital Finance Analytics founder Martin North and Irish financial adviser Eddie Hobbs, who argue Australia’s economy is looking increasingly similar to Ireland’s prior to the 2007 housing collapse. For nearly three years, Mr Adams has been predicting a looming “economic Armageddon” in which a vulnerable Australia is overwhelmed by an overseas financial crisis due to property, household debt and net foreign debt bubbles. But as house price falls across the country begin to pick up steam, the former Coalition adviser has revised his view. “Australia has never been the first economic domino to fall during a global economic crisis,” he said. He points to previous downturns...
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120 labour market researchers sign an open letter calling for intervention to boost wage growth ABC News19 March 2019 Stephen Long   An open letter signed by more than 120 labour market experts has urged policy action to boost wages growth in Australia, amid perceptions that stagnant wages are threatening the economy and increasing inequality. The letter, endorsed by 124 economists, lawyers and specialist labour market researchers, has called for the adoption of measures to raise minimum wages, strengthen collective bargaining, relax wage caps on public sector workers, tackle pay inequity and constrain the outsourcing of "normal employment responsibilities". "If those proposals are implemented, in whole or in part, we expect they would support a moderate but meaningful improvement in wage growth in future years, lifting wage increases back above consumer price inflation and towards traditional benchmarks (of 3.5 per cent to 4 per cent per year)," the letter said. "The...
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Lenders defy market heat with smaller deposits and longer fixed terms Australian Financial Review Mar 18, 2019 3.45pm Duncan Hughes   Lenders are defying the market heat with new loans that reduce deposits a borrower needs to qualify, lower rates for borrowers with low deposits, or double the fixed-rate term, according to analysis of rates and conditions. Industry fund-owned ME Bank, Macquarie Bank and ANZ are improving their offers to marginal borrowers as analysts claim market sentiment continues to sour, causing sellers to rush to the exits amid "fears of not getting out before prices fall further", or FONGO. "Just when we thought banks were finding the kitchen a little too hot, lenders are encouraging borrowers at the higher end of the loan-to-value ratio," said Steve Mickenbecker, group of financial services for Canstar, which monitors rates ane prices. Lenders are attempting to juggle the need to boost net interest margins from...
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Sydney and Melbourne house price fall sharpest in five downturns since 1965 Australian Financial Review Mar 18, 2019 3.53pm Su-Lin Tan   The fall in Sydney real house prices is close to hitting its average downturn decline at only halfway through the average downturn cycle, setting it up for the sharpest drop for the city since 1965, a BIS Oxford Economics study shows. The average downturn for Sydney house prices is 14 quarters and the average total real price decline each downturn is 21 per cent. The current downturn has progressed through six quarters to December 2018, but real median prices – taking out the effects of inflation – are already down 16 per cent. This could mean Sydney house prices have either dropped faster than average downturn cycles – five cycles since 1965 were analysed – or it could bode tougher times ahead with more price falls to come, BIS...
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APRA warns against super fund activism Australian Financial Review Mar 18, 2019 10.30pm John Kehoe, David Marin-Guzman   Super fund boards must put member's interests first and manage investments "free from influence", the Australian Prudential Regulation Authority has warned in response to Coalition alarm about unions pressuring funds to take sides in workplace disputes. In response to a letter from the Treasurer, APRA chairman Wayne Byres said the regulator was strengthening the intensity of oversight of governance weaknesses that could hurt retirement incomes, in the wake of the Hayne royal commission. Mr Byres agreed with Josh Frydenberg's March 3 letter that super fund trustees were legally required to invest in line with the best interest duty and sole purpose test. "APRA therefore expects that trustees will carry out their role and meet their responsibilities free from the influence of sponsoring organisations or any other external parties," Mr Byres wrote in a...
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Westpac nears deal on financial planners with Viridian The Australian 12:00am March 19, 2019 Joyce Moullakis, Bridget Carter   EXCLUSIVE  Westpac Bank is set to decide the fate of its financial planning unit and dealer groups this week, as it inches toward a complex transaction with boutique Viridian Advisory. As revealed by The Australian online yesterday, the parties are said to be putting finishing touches on a deal that would see Viridian acquire a large portion of Westpac’s planners and include dealer groups Magnitude and Securitor. A divestment would see Westpac chief Brian Hartzer, the most committed of the major bank bosses to wealth management, jettison the businesses alongside a long-term referral arrangement. Unlike the other big four banks, Westpac has retained its life insurance division and Mr Hartzer has emphasised a belief that banks should forge ahead in wealth despite some parts of it plagued by scandals and limited profitability....
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Westpac: We're no Storm Financial Australian Financial ReviewMar 18, 2019 11.00pm James Frost   Westpac is digging in over a stoush with the corporate cop by rejecting a Federal Court finding that standards at the bank's superannuation arm were comparable with those at Storm Financial. The bank is giving no quarter as it prepares to face off against the Australian Securities and Investments Commission for a second time over an aggressive campaign that netted the bank $650 million in superannuation funds. Westpac won the case on its first hearing but argues that some of judge Jacqueline Gleeson's conclusions in December last year were wrong – including the finding that the bank's actions were unethical and that it failed to do all things necessary to ensure it provided financial services efficiently, honestly and fairly. While many believe Westpac sailed through the Hayne banking royal commission, its appetite for litigation has seen the...
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UK regulatory expert backs call for higher bank capital Australian Financial Review Mar 17, 2019 11.00pm Tony Boyd   EXCLUSIVE  The former head of bank regulation in the United Kingdom has backed the New Zealand Reserve Bank’s plan to force the big four banks to hold about $12 billion in additional equity capital. Lord Adair Turner, who was chairman of the UK Financial Services Authority from 2008 to 2013, said all the world’s major banks should hold common equity tier 1 (CET1) capital of 15 to 20 per cent. The RBNZ wants the New Zealand subsidiaries of the big four to hold CET1 of 18 per cent. Bankers have warned that the consequence of higher capital is likely to be higher interest rates for borrowers. But Lord Turner said the trade-off for banks having higher capital requirements could be simpler regulation. This could include a winding back of the complex array...
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Banks' big retreat may go too far, warn corporate advisers Luminis Australian Financial Review Mar 18, 2019 12.15am Sarah Thompson, Anthony Macdonald   EXCLUSIVE  Australia's big banks are in the middle of a giant retreat, selling and spinning off businesses worth billions of dollars in an effort to simplify and re-focus on their core purpose of writing loans and banking deposits – but they'd better be careful not to go too far. That's the view of some of Australia's most senior corporate advisers, the partners at boutique firm Luminis Partners, who are watching with interest the fallout from the banking royal commission and strategy shifts at the big four banks and other financial services companies. "In 10 years' time, people will look back and say 'why did they exit some of these businesses' and I wouldn't be surprised if in 10 years' time the cycle returns and they go back into...
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Hayne incites confusion over industry codes Australian Financial Review Mar 17, 2019 6.21pm John Kehoe   EXCLUSIVE  The Hayne royal commission has confused the government, regulators and finance lobby groups over how to implement its recommendation to make industry codes more legally enforceable. Existing self-regulatory industry codes for general insurers, life insurers and other non-banking financial services are not legally or contractually enforceable, creating a gap the Hayne report appeared to be concerned about. Treasury on Monday will publish a consultation paper, seen by The Australian Financial Review, asking a range of questions on the enforceability of financial services industry codes, in response to the royal commission. Stakeholders are uncertain how to proceed and believe policymakers need to be careful to strike the right balance to avoid deterring the banking, insurance and financial advice sectors from imposing self-regulation on their industries. "No one really knows what Hayne meant with that recommendation...
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Economy, small business may be hit by housing slump: Treasurer Sydney Morning Herald March 17, 2019 12.05am Eryk Bagshaw, Shane Wright   EXCLUSIVE  Treasurer Josh Frydenberg has raised fears the property downturn in Sydney and Melbourne could flow into the broader economy, hitting small businesses that have taken out loans on the value of their family home. The comments, in an interview with The Sunday Age and Sun-Herald in Canberra, a fortnight out from his first budget mark a shift from the top levels of the Morrison government which has prided itself on using a "scalpel" to treat over-heating housing markets but now faces price falls largely beyond its control. "Now the issue is different," said Mr Frydenberg. "People are concerned about the impact of lower prices on the future of the real economy and particularly that spill-over into household consumption and into the ability of small business to grow and...
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Sellers with FONGO race to beat property clock Australian Financial Review Mar 17, 2019 3.36pm Nick Lenaghan   Some investors are acting decisively to beat the the property clock, dropping their reserve prices to meet the market before it falls any further and wipes out whatever gains they have made on their investment. Following the revelation in AFR Weekend that the property downturn has left the buyers of as many as 450,000 properties in Sydney and Melbourne with homes worth less than what they paid, weak weekend clearance rates point to the emergence of FONGO, or the fear of not getting out before prices fall further. On preliminary results, the national clearance rate was at 56.1 per cent this week, increasing from last week's final clearance rate of 47.8 per cent, according to CoreLogic Final clearance rates are typically several percentage points lower than the preliminary numbers. One year ago, a...
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NAB breaks ranks on small business terms Australian Financial Review Mar 15, 2019 5.16pm Misa Han   National Australia Bank will boost the number of small business borrowers that will be extended greater protections, designed to relieve the power imbalance that favours lenders, in a move that breaks ranks with the three other big banks and the sector's lobby group. The embattled bank, which is still reeling from the exit of its chief executive and chairman last month, said on Friday that it supported 72 of the 76 recommendations put forward by Commissioner Kenneth Hayne in his banking royal commission final report. Interim NAB chief executive Phil Chronican, who was confirmed as chairman last week, said NAB was in the process of implementing 26 of the recommendations. The bank disagreed with six recommendations in critical areas such as mortgage broker commissions, the definition of small business and the banking executive accountability...
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Credit crunch is damaging the economy beyond property The Australian 8:11am March 15, 2019 Robert Gottliebsen   When there is a serious downturn just over the horizon, a pattern of apparently unrelated events provides the advance warning. And right now, veteran bankers are on the alert. They can see that their new lending criteria, which has slashed loan availability by between 20 and 30 per cent, is having an impact that is much wider than the property market. This week I ran into commercial banker who was shocked. Two of his retail clients had confronted a major shopping centre owner and said “lower the rents or we are out”. For as long as the banker can remember this major shopping centre chain would never countenance a rent reduction. But this time there was fear in its eyes, and it came to the party. For the banker, that meant that he can...
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More than 800,000 homes could end up being worth less than what they were bought for Australian Financial ReviewMar 15, 2019 10.00pm Ingrid Fuary-Wagner   The property downturn has left the buyers of as many as 450,000 properties across Sydney and Melbourne with homes worth less than what they paid for them and this figure will almost double if the market continues to fall, putting further pressure on household budgets as the RBA tries to fire up a slowing economy. An exclusive analysis by CoreLogic for AFR Weekend shows the potential scale of the downturn, which could, nominally, leave the buyers involved in 830,000 property sales in the two biggest cities under the water, if prices fall 25 per cent from peak to trough. The property clock has already wound Sydney prices back to June 2016 levels with values falling 13.2 per cent since they peaked in July 2017. In Melbourne,...
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Investment reporting shift understates debt The Australian 12:00am March 15, 2019 David Uren   The government’s net debt is being understated by as much as $70bn because of the way the share investments of the Future Fund and other government investment funds are reported. The Parliamentary Budget Office has called for a review of how investment funds are treated on the government’s books amid concern that ministers are favouring them as a way of getting around tight budget spending constraints. The office says that if a government were to set a fixed target for reducing net debt, it could be met simply by restructuring the way investments are held. “As the government’s balance sheet has expanded and it is being used more actively for fiscal policy purposes, transparency around these evolving structures and the impact on key fiscal indicators is important to understand underlying trends,” the PBO report says. While the...
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When it comes to tax, it’s Virgin by name and Virgin by nature michaelwest.com.auMar 15, 2019 Michael West   Virgin Australia founder Sir Richard Branson actually resides in a tax haven. He even has his own island, Necker Island, in the infamous archipelago of tax secrecy, the British Virgin Islands. You don’t get more tax-haveny than that. Some may quibble that rival airline Qantas dodges far more tax. The national carrier has paid no tax on $62 billion in total income over the four years of Tax Office transparency data. Virgin, with its $18 billion in income and zero tax payable, is piddling by comparison. Yet, as explained in the methodology attached, the rankings are not only based on sheer magnitude of total income but also on how much taxable income the company managed to wipe out. Qantas still produced $336 million of taxable income (on which it still paid no...
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Two towers, two fires - but both signed off by same engineering firm The Age March 14, 2019 10.47am Clay Lucas   EXCLUSIVE  The fire safety engineering firm found by a tribunal to be most to blame for a 2014 flammable cladding blaze in Docklands also signed off on Neo200, the Spencer Street apartment tower that caught alight in February. Last month the Victorian Civil and Administrative Tribunal found that safety engineering company Thomas Nicolas, whose sole director is Con Nicholas, was responsible for the largest portion of the almost $6 million it will cost to reclad the Lacrosse apartment tower on Latrobe Street. That building started to burn about midnight on November 24, 2014, when it caught alight due to flammable cladding – the same type as in London’s deadly Grenfell tower fire. In the Lacrosse fire, French backpacker Jean-Francois Gubitta left a cigarette burning on the balcony of the...
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Apartment buyers could face a 20pc fall in valuation in upcoming settlements Australian Financial Review Mar 14, 2019 11.00pm Su-Lin Tan, Nick Lenaghan   Buyers of off-the-plan apartments could be "out of the money" by as much as 20 per cent as settlement falls due in coming months, raising the risk of greater defaults, according to UBS analysts. The issue of settlement and apartment values has now become acute for those buyers who contracted for off-the-plan apartments at the peak of the market around 2016 and 2017. With prices falling and banks' tougher stance on borrower scrutiny, fresh valuations ahead of loan approvals for settlement could sink as much as 20 per cent below original off-the-plan purchase prices, according to UBS. "What we are seeing now is that apartments are increasingly out of the money. That's where you get settlement issues," analyst James Druce said. Companies such as Mirvac are particularly...
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