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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The 47 scandals that prove governments would be mad to go soft on banks 19th November 2015 http://www.ianfraser.org/why-well-all-end-up-paying-for-the-feeble-response-to-the-banking-crisis/ In an important speech given at the Finance Watch conference in Brussels on Tuesday,Robert Jenkins — a former member of the Bank of England’s financial policy committee — highlighted the dangers of a two-tier justice system in which senior bankers are effectively ‘above the law’. He also said that 47 banking scandals and the feeble nature of most post-crisis financial reforms suggest that governments around the world would be ill-advised to cave in to the demands of bankers and finance sector lobbyists seeking a return to ‘business as usual’  .........As you have heard I had the honour to serve at the Bank of England. It was an exciting time. The banking system was undercapitalized. Greece threatened the eurozone. The eurozone threatened the banking system. The bankers threatened the politicians – lest the politicians threaten the bankers....
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Date December 1, 2015 Clancy Yeates http://www.smh.com.au/business/banking-and-finance/nab-anz-and-westpac-cut-deposit-interest-rates-20151201-glcegq.html   Three of the country's big banks quietly cut interest rates for online savings accounts last month, as lenders try to limit a crunch on their profit margins being caused by stiff competition and soft economic conditions. National Australia Bank, ANZ Bank and Westpac all reduced rates for popular online savings accounts in November, the same month in which customers also started paying higher mortgage rates ANZ Bank cut the base rate on its online saver account by 0.2 percentage points to 1.8 per cent, while NAB reduced its iSaver base rate by 0.1 percentage point, also to 1.8 per cent, interest rate comparison website Mozo said. As well as cutting base rates – the long-term rates paid to customers outside "bonus" or limited-time promotional offers – lenders also cut their limited-time "introductory" rates used to lure new customers. NAB reduced its four-month introductory...
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Hang Onto Your Wallets: Negative Interest, the War on Cash and the $10 Trillion Bail-in by ELLEN BROWN         Email Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene inMary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . . ”? That may still work if you’re a Wall Street banker, but if you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse. Four European central banks – the European Central Bank, the Swiss National Bank, Sweden’s Riksbank, and Denmark’s Nationalbank –have now imposed negative interest rates on the reserves they hold for commercial banks; and discussion...
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Big banks cut 1475 jobs to maintain profitsDa November 9, 2015   http://www.smh.com.au/business/banking-and-finance/big-banks-cut-1475-jobs-to-maintain-profits-20151109-gku69i.html   After two years of adding jobs, Australia's largest banks are joining global competitors and trimming staff as earnings falter following six consecutive years of record profits.   The four-largest lenders and Macquarie Group cut a combined 1475 jobs in their respective half yearly periods to reduce costs as increased competition and regulation eat into their profitability.   The job reductions are the most since the lenders shed 3300 roles in the second half of 2012, according to regulatory filings. Banks worldwide are cutting positions amid a multi-year slowdown in trading revenue and increased compliance costs. Deutsche Bank, Standard Chartered and Credit Suisse Group have announced they will slash almost 50,000 staff While Australian lenders bucked the global trend and added jobs from late 2013 to the start of this year as mortgage demand soared, they are now facing a slowdown...
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Prosecutor cites 'rock-solid evidence' against British ex-bankers; defence says proof missing By Larry Neumeister, The Associated Press | The Canadian Press – Tue, 3 Nov, 2015 6:27 PM EST Like Tweet Print  Beat the market. Get the app.   By Larry Neumeister, The Associated Press NEW YORK, N.Y. - Two British ex-bankers "left a paper trail a mile long" as they tried to manipulate worldwide interest rates to benefit themselves, a prosecutor told jurors during closing arguments at a federal trial Tuesday. But defence lawyers said the case lacks proof and insisted their clients are not guilty. The arguments came in the Manhattan trial of Anthony Allen, 44, and Anthony Conti, 46, two former bankers for the Dutch bank Rabobank, one of the world's largest financial institutions. Rabobank of the Netherlands agreed two years ago to pay about $1 billion to settle U.S., British and Dutch charges of manipulating the key global interest rate. The...
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Goldman pays $50M fine for Fed data leak   28 October 2015 http://www.usatoday.com/story/money/business/2015/10/28/goldman-pays-50m-fine-fed-data-leak/74741218/ Goldman Sachs has agreed to pay $50 million in a case that has ignited fresh criticisms over the revolving door between Wall Street and the government. According to the New York Department of Financial Services, a banking regulator, Goldman hired Rohit Bansal from the Federal Reserve Bank of New York in May 2014, "in large part for the regulatory experience and knowledge he had gained while working at the New York Fed." Goldman hired Bansal despite the fact that he had been forced to resign from the Fed for breaking the rules there, NYDFS said. And once at Goldman, Bansal was instructed to work on a bank that he had supervised while at the Fed, despite explicit prohibitions against him doing so, NYDFS said. Bansal later used confidential information, some of which he obtained from his prior employment at the NY...
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Australian former Rabobank trader arrested over Libor rate-rigging scandal   26 October 2015 http://www.theguardian.com/business/2015/oct/26/australian-former-rabobank-trader-charged-over-libor-rate-rigging-scandal   A Western Australian man is in jail awaiting extradition to the United States for his alleged role in the Libor interest rate-rigging scandal. The extradition order relates to allegations, which first emerged in 2012, that traders had manipulated the Libor rate, a benchmark interest rate that some of the world’s leading banks charge each other for short-term loans, for their own benefit. Paul Thompson was arrested on an extradition order by Australian federal police in Perth on Thursday and was taken to Hakea Remand Centre. The 49-year-old, who lives with his family in the inner-city Perth suburb of Dalkeith, is wanted for prosecution in the US for charges of wire and bank fraud. Thompson was charged alongside two other Rabobank employees in January 2014 with conspiracy to commit wire fraud and bank fraud and two counts of wire fraud. According to a...
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Study Connects Credit Default Swaps to Mortgage Delinquencies   May 25, 2015 http://www.utdallas.edu/news/2015/5/25-31558_Study-Connects-Credit-Default-Swaps-to-Mortgage-De_story-wide.html Researchers at The University of Texas at Dallas recently published the first empirical investigation connecting credit default swaps to mortgage defaults that helped lead to the 2007-2008 financial crisis.   The study, authored by finance and managerial economics professor Dr. Harold H. Zhang and associate professor Dr. Feng Zhao, was published in the April issue of The Journal of Finance. The researchers found that the presence of credit default swaps further stimulated the strong demand for mortgage-backed securities, which led to lax lending standards in the mortgage origination market and encouraged predatory lending and borrowing practices. Lenders increasingly offered subprime mortgages, which inevitably drove much higher mortgage default rates. “There are many media reports that to some extent link the financial crisis to the housing market crash, and subsequently, research has confirmed that,” Zhang said. “One of the issues that people have paid particular...
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Automated Valuation Models reduce fraud risk for QBE LMI March 2010   Executive summary QBE LMI estimates that fraudulent and overstated property valuations have cost the Australian banking and finance industry tens-of-millions of dollars over the past decade. And with the increase in property values over that same period masking the full extent of the problem, obtaining accurate valuations of the properties used as security for mortgage lending is clearly one of the industry’s biggest challenges.  Automated Valuation Models (AVMs) have been available for many years but were perceived to be inaccurate and unreliable. However, new entrants in the Australian AVM market and recent enhancements in technology were the catalyst for QBE LMI to engage Quantium to evaluate the potential application of AVMs.   QBE LMI concluded that the current performance of AVMs was inadequate to be considered a commercially viable alternative to traditional valuations for the high-risk end of...
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Aussie Home Loans John Symond on foreign investment’' 7 August 2015 http://www.news.com.au/finance/real-estate/house-prices-aussie-home-loans-john-symond-on-foreign-investment/story-fndban6l-1227474826422 AUSTRALIAN real estate needs foreign investors but regulators may be giving them an unintended advantage over local investors, says Aussie Home Loans founder John Symond. Changes to property investment rules may put Australian investors at a disadvantage to cashed-up foreign buyers, Mr Symond told a parliamentary inquiry into home ownership on Friday. The Australian Prudential Regulation Authority announced the changes last year in a bid to contain overheated property speculation. “It’s very easy to play at the edges and talk about APRA tightening up lending restrictions for investors, but what about the 20 to 25 per cent, in some areas 30 per cent, of foreign buyers who predominantly don’t borrow here?” Mr Symond told a hearing in Sydney.  “They are getting an easier go to come and gobble up what they want.  “I’m really concerned that there will be unintended consequences...
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No longer bottom of the harbour but bottom of the ocean!   World is stuck in 'new mediocre' gear, IMF boss Christine Lagarde says9 October 2015   http://www.smh.com.au/business/the-economy/world-is-stuck-in-new-mediocre-gear-imf-boss-christine-lagarde-says-20151009-gk5381.html   $4 trillion debt binge could spark new global crisis, IMF warns IMF pares global forecast amid commodity slump Tax avoiders: Apple joins other multinationals in sinking to the bottom of the ocean   Central banks have little room for error in a low-growth world in which over-stretched and commodity-dependent emerging economies and a slowing China are major risks, top international financiers told the International Monetary Fund's meeting.  The world is stuck in a "new mediocre" growth pattern, IMF chief Christine Lagarde said on Thursday, and that despite the $US7 trillion ($9.6 trillion) in quantitative easing measures from banks in industrial nations since the global financial crisis.   In a bid to shore up finances and punish companies that exploit differences in tax regimes, governments...
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Mike Smith to leave ANZ, Shayne Elliott to take over as CEO on January 1 By business reporter Michael Janda Updated Thu at 12:51pmThu 1 Oct 2015, 12:51pm http://www.abc.net.au/news/2015-10-01/mike-smith-to-leave-anz-shayne-elliott-new-ceo/6818810   ANZ's chief executive Mike Smith is standing down after eight years at the bank's helm, to be replaced by its current chief financial officer Shayne Elliott. The bank says Mr Smith will finish up on December 31 this year, with Mr Elliott taking the reins on January 1. The change of leadership does not imply a dramatic change of direction for ANZ, given that Shayne Elliott has been with the bank for more than six years, with half of that tenure as its finance chief and effective second-in-charge to Mr Smith. "Shayne and I have worked closely together for the last six years, particularly in his last three years as CFO. I know he will make an exceptional chief executive," Mr Smith said in a statement....
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http://www.ccmc.org.au/cms/wp-content/uploads/2013/11/CCMC-Inquiry-Report-Financial-Difficulty-December-2005.pdf   December 2005 In July 2005 the Code Compliance Monitoring Committee (“the Committee”) established an Inquiry into bank compliance with clause 25.2 of the Code of Banking Practice (“the Code”). Clause 25.2 states: “With your agreement, we will try to help you overcome your financial difficulties with any credit facility you have with us. We could, for example, work with you to develop a repayment plan. If, at the time, the hardship provisions of the Uniform Consumer Credit Code could apply to your circumstances, we will inform you about them”.   Clause 25.2 of the Code requires banks to take positive steps to try to assist customers in financial hardship. This obligation was introduced with the Code and although banks may already have been doing so, the Code made it a contractual obligation.   The Committee values the continuing efforts of all the banks involved in the Inquiry to discharge...
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Reserve Bank governor Glenn Stevens on Friday said this trend would continue.  "I predict we will now see a number of people who used to call themselves investors are going to call themselves owner-occupiers because the relative pricing has changed. That will lead to some interesting dynamics, I suspect, over the next year," Mr Stevens said   BFCSA Editor:  No Mr Stevens - consumers will not be told what they will be called.  Banks will tick a box Owner Occupier without the consumer being any the wiser - its a fraud!  Its trickery carried out internal to banks after the signature obtained on the LAF and without the authority to knowledge of the intended victim. Home loans getting cheaper as lenders wage war 22 September 2015 Clancy Yeates   http://www.smh.com.au/business/banking-and-finance/home-loans-getting-cheaper-as-lenders-wage-war-20150921-gjrelw.html   Smaller lenders have led the race to cut interest rates on new owner-occupier mortgages, in some cases slashing their advertised rates by twice the Reserve Bank's...
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APRA asked to investigate valuations   December 16, 2014 http://www.theadviser.com.au/breaking-news/31241-apra-asked-to-investigate-valuations   The FBAA has said it will ask APRA to investigate how mortgage valuations are calculated.  According to the association, buyers are being disadvantaged by valuations that are too low.    The development comes after The Adviser reported serious concerns about valuations and conducted a poll in which 52.7 per cent of brokers said valuations are usually too low.   FBAA chief executive Peter White said it was not good enough that brokers report huge variations in valuations for the same property, sometimes by hundreds of thousands of dollars.   "Valuations should reflect the true value of a property and incorrect valuations can in some cases prevent buyers from being able to purchase the home they want," he said.   Mr White said lenders are increasingly using valuations based on computer-generated market averages, but these do not take into consideration the nature of the individual property....
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Chinese banks’ bad loans rise to US$290 billion as econony slows, manufacturers struggle 6 August 2015 / RBI warns banks against under-declaring bad loans 5 August 2015...
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The Financial Ombudsman, a fair service? by “A Journalist” 26 May 2015   https://www.opendemocracy.net/ourkingdom/financial-ombudsman-and-its-service   The Financial Ombudsman Service (FOS) is a body that investigates financial complaints about regulated firms and can award compensation of up to £150 000. Yet, it is characterised, at least in the internet, as much by complaints about it, as by those made to it. The allegations include evidence, laws and facts being ignored, as well as unfair arguments, all of which swing complaints one way or the other. There is evidently also a tendency to reject or support a complaint totally, rather than award in terms of contributory negligence. With many financial complaints, the truth is somewhere between the two extremes, so that partial compensation should be common as well. Additionally, there are frequent claims of incompetence, unintentional or otherwise. The latter refers to “deliberately getting the wrong end of the stick”, as one person expressed it.  Furthermore, there...
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I have an awful gut feeling...   How Force-Placed Insurance Leads to Foreclosure May 14 2013 http://finance.yahoo.com/news/force-placed-insurance-leads-foreclosure-171400365.html       NEW YORK (MainStreet)—I constantly hear banking and insurance industry professionals stating that only 1% of loans in their loan portfolios have force-placed insurance as a way of defending the practice. According to the Census Bureau, this equates to 7.56 million American citizens being price gouged. That the banking and insurance industries consider this staggering number to be inconsequential isn't even the disgusting part. Also see: DFS Force-Placed Insurance Legislation is a Joke The statistics they provide to back this up are a fallacious argument. Banks only report 1% of their loan servicing portfolios as having force-placed insurance, because the product is four to ten times more expensive than a regular homeowner's policy (as reported by Birny Birnbaum during the NY Department of Financial Services hearings on the product, the transcript of which can...
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Old US which raises issues...      LENDER LIABILITY FOR NEGLIGENT REAL ESTATE APPRAISALS   http://repository.law.ttu.edu/bitstream/handle/10601/613/molloy1.pdf?..   ........This article examines the various situations in which people may rely on the actions of a lender subsequent to its receiving an appraisal opinion and to delineate the scope of a lender's liability when the appraisal involved was negligently prepared. The article begins by explaining and analyzing the appraisal process. Then the article explores the tort and contract theories of liability, as well as other potential theories of liability, for negligent real estate appraisals. The article concludes by discussing the determination of damages in the event of liability.   Page 7... ....erroneous appraisals can lead to problems in several circumstances. A buyer or investor could undertake a purchase or financing arrangement involving payment obligations in excess of the actual value of the property if the property's appraised value is erroneously overstated.42 A buyer or investor could be...
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Lookout - the next time you buy or refinance your home..... by Steve Keohane, USN (Ret), Nov 2001   The BIG AVM Lie   Automated Valuation Models (AVMs)   Many lenders, including Fannie Mae, Freddie Mac, Wells Fargo, Countrywide and Washington Mutual made very risky decisions several years back to utilize computer generated appraisals (known as AVMs) instead of licensed real estate appraisers.This extraordinary "Risk taking" by lenders in the name of greed nationwide is now beginning to cause problems in the bond markets because of the extraordinary risk of backing mortgages when nobody ever even looked at the property (homes and property) being financed. The subprime market meltdown due mostly to their Liar! Liar! loans (no income verification) is yet another clear indication of Lender irresponsibility and greed. Driveby "appraisals", where an appraiser is told not to go inside the property to be appraised have also caused extraordinary losses...
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