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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ASIC orders review of OnePath Tuesday, 15 March 2016 http://www.ifa.com.au/news/15864-asic-orders-independent-review-of-anz-division ANZ has agreed to an independent review of one of its wealth subsidiaries after a "significant" number of breaches prompted ASIC to be concerned.  In a statement, the corporate regulator said ANZ's OnePath will be reviewed after the bank reported breaches in relation to its life, general insurance, superannuation and funds management activities.  These activities are operated through its wholly-owned OnePath group of subsidiary companies. According to the statement, from early 2013 to mid-2015, around 1.3 million customers were affected by breaches, requiring refunds and compensation of around $4.5 million. This also required rectifications and other remediation of about $49 million, ASIC said.  In one instance, 1,400 superannuation fund members had $28.7 million in contributions allocated to the incorrect super account for a period up to 12 months.  ANZ has now returned these funds to the correct accounts and provided over...
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  • organza
    organza says #
    Rather telling. Could offer explanation for mooted changes to our superannuation that certain politicians are getting their knick
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RBA warns of ‘aggressive expansion’ by foreign lenders Wednesday, 30 March 2016   James Mitchell   http://www.mortgagebusiness.com.au/breaking-news/9603-rba-warns-of-aggressive-expansion-by-foreign-lenders   The Reserve Bank of Australia has issued “a note of caution” over the aggressive expansion of foreign lenders in the local market.  RBA Governor Glenn Stevens told the ASIC Annual Forum in Sydney last week that competition in the business lending space has increased in the last couple of years.  “Overall, this is to be expected and is a welcome development at a time when a missing element of the economic growth story is capital spending outside the mining sector, which appears to remain very weak”, Mr. Stevens said.   The RBA chief said there was a notable trend of foreign banks' “aggressive expansion” in Australia.  “Here there is a note of caution. If these are taking opportunities left on the table where local players (or earlier foreign players) were simply too conservative, all...
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When and when not to vertically integrate - A strategy as risky as vertical integration can only succeed when it is chosen for the right reasons. August 1993 | by John Stuckey and David White   http://www.mckinsey.com/insights/strategy/when_and_when_not_to_vertically_integrate   Vertical integration is a risky strategy—complex, expensive, and hard to reverse. Yet some companies jump into it without an adequate analysis of the risks. This article develops a framework to help managers decide when it is useful to vertically integrate and when it is not. It examines four common reasons to integrate and warns managers against a number of other, spurious reasons. The primary message: don't vertically integrate unless it is absolutely necessary to create or protect value.  Vertical integration can be a highly important strategy, but it is notoriously difficult to implement successfully and—when it turns out to be the wrong strategy—costly to fix. Management's track record on vertical integration decisions is not good..........The fixed asset...
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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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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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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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We first alerted Parliament 8 Aug (Hansard Ec. Committee Inquiry into Banking Post GFC) 2012 that "Government cannot, ought not to profit from a  fraud."  Two months later Government decided to sell off the AOFM's purchase of $24 billion (tax payer dollars) of potentially toxic RMBS Packages. Treasurer said: "One of our best polcies but decided to sell."  Duh!   Now read this: http://www.afr.com/p/blogs/christopher_joye/aussie_credit_is_booming_jLemvyCkEvthNRFyxC66XI Aussie credit is booming PUBLISHED: 27 May 2014 Australian credit investments are booming. On the back of the lowest borrowing rates in history and generally benign conditions across most asset classes, the cost of issuing Australian corporate bonds and selling home loans via portfolios of residential mortgage-backed securities (RMBS) is plumbing new lows.  In the words of one major bank analyst on Tuesday, “volatility is absolutely crushed for now with the VIX Index looking like a pancake”. Volatility is a measure of the probability of loss in...
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  • setup
    setup says #
    The question must be asked, "why are the banks making record profits when the interest rates have been kept so low for such a long
  • Denise
    Denise says #
    Australian Government cannot profit from a fraud!!!!! In 2008 Banks decided to no longer VERIFY incomes on mortgage loan apps whe
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http://www.abc.net.au/news/2014-04-17/kohler-the-good-bad-and-ugly-of-rmbs-resurgence/5396428 The good, bad and ugly of RMBS resurgence The Drum By ABC's Alan Kohler Updated 17 Apr 2014 The mortgage-backed securities market is booming and bodes well for bank competition. But it's driving house prices higher and making it even harder for first homebuyers, writes Alan Kohler. After five years of near death, the residential mortgage-backed securities (RMBS) market in Australia is roaring back to life, which is both good and scary.  Good because the banks might finally get some competition from non-bank lenders again; scary because the resurgent supply of prime and subprime mortgage money from yield-hungry investors is not being matched by the supply of new land to lend against, so it's just driving house prices higher.................We are seeing two quite different markets being mixed together: one for credit that is active and plentiful (call this one nitro) and one for land that is short (call it glycerin)....
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    setup says #
    The property prices have gone through the roof and are unrealistic. This generation have to work for the rest of their lives to pa
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                       "Knowledge is power. Knowledge shared is power multiplied." Robert Noyce:    "The REO-to-Rent"  (Real Estate Owned-to-Rent).  The new bank$er "phoenix'" asset class play. Lewis Ranieri, known as the godfather of mortgage bonds is backing firms that want to bring the private market back into mortgage backed securities, reports CNBC's Diana Olick.   Money to be made:Over the last three years, institutional investors have poured as much as $20 billion into purchasing foreclosed properties,which they have turned around as single-family rental homes. Blackstone Group, the largest, is about to offer a new security backed by 40,000 of these homes it has purchased from aggrieved families. "It obviously works, ..'securitizing' the rental stream of these homes is the next [crime spree] step for this 'phoenix' asset class. It's one more version of "profiting-from-bank-fraud" taking the ill-gotten cash flows off of a series of hard assets [read:"stolen homes"] and securitizing them."...
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  • doyla66
    doyla66 says #
    Securitisation of rental "credit" - it was only a matter of time before they jumped on that opportunity too. I sincerely hope tha
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 Ex-Bankrupt Homeowners Entice on Spread Drop: Australia Credit  By Rachel Evans - Apr 24, 2013 12:12 PM ET Sales of bonds backed by home loans to self-employed or previously bankrupt Australians have passed 2012’s total, after yield premiums fell to the lowest since the debt triggered the global financial crisis.   Offerings of so-called nonconforming mortgage bonds rose to A$1.05 billion ($1.08 billion) this year, 17 percent more than for the whole of 2012, data compiled by Bloomberg show. Pepper Home Loans Pty paid 120 basis points more than swaps on its biggest sale of the debt in five years, offering 40 basis points more than Commonwealth Bank Of Australia (CBA) did on notes backed by mortgages that met normal lending requirements.   April 24 (Bloomberg) -- John Honan, Sydney-based chief economist at Ausbil Dexia Ltd., talks about the economic and political outlook for Australia, the nation's housing market, and currency. He also discusses China's...
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  • doyla66
    doyla66 says #
    This means that any excess cash that is generated through repossessions or borrowers re-mortgaging will all be paid to the lenders
  • doyla66
    doyla66 says #
    Look out investors,how on earth can you say that the bonds issued in the example below are a good investment? Of the 1,123 loans b
  • doyla66
    doyla66 says #
    Non-conforming bonds up 17% already ... Does this mean that despite everything that has been said about Lo Doc and No Doc loans th
  • doyla66
    doyla66 says #
    It's called 'tick a box' and they all do it. 'Tick a box', job is done! Forget about compliance, checks or balances, responsibil
  • doyla66
    doyla66 says #
    Maybe we should give the box ticker a bit of proportionate liability if the company goes pear shaped? Say, discount on his/her pay
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BRAILEY, Ms Denise, President, Banking and Finance Consumers Support Association Inc. [14:18] CHAIR: I now call the Banking and Finance Consumers Support Association. Good afternoon, Ms Brailey. I invite you to make an opening statement. Ms Brailey : We have a number of members who have been what they see as victims of low doc loans and bad lending practices—and, indeed, are suffering, as Senator Cameron was saying earlier, the downside of taking the entire risk for some bad practices: losing their homes, their cars, their livelihoods; and being in very dire circumstances. I have also copied 10 copies for you of what I am about to about to deliver—not to read now. CHAIR: Is it a particularly long statement you are about to read? Ms Brailey : No, what I am going to read will take less than 10 minutes—maybe six minutes. CHAIR: Okay. If we can keep it as...
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  • doyla66
    doyla66 says #
    This should be posted periodically. Since then more facts have come to light, especially "Skippy" the banks' computers determining
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EXTRACT TAKEN FROM THE AUSTRALIAN GOVERNMENT BUDGET PAPER 2012-13 Statement 7: Asset and Liability Management (continued) Residential mortgage‑backed securities The global financial crisis led to the profound dislocation of the securitisation market globally, including the Australian residential mortgage backed securities (RMBS) market. In view of these developments, during 2008 and 2009 the Government directed the Australian Office of Financial Management (AOFM) to invest $16 billion in high quality, AAA‑rated Australian securities to support competition from smaller lenders in the residential mortgage and small business lending markets. In December 2010, as part of its Competitive and Sustainable Banking System package, the Government announced a further $4 billion of investment in the RMBS market, with an additional objective of transitioning to a sustainable market, bringing the Government's total investment commitment to $20 billion. As at 1 May 2012, the AOFM had invested $14.9 billion of these funds, with $5.1 billion remaining within the AOFM's...
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  • doyla66
    doyla66 says #
    S&P/Analyst sent video of himself singing/dancing to song written to the tune of "Burning Down the House; "Going - all the way dow
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This is from the structured investor's guide for the 2010 issue written in March 2010: "Bankwest has been an issuer of RMBS since 2000. To date, it had issued in excess of A$9bn RMBS through its SWAN Trust programme. Currently, two of its SWAN Series remain outstanding with a total volume of A$2.8bn." Heres's the link: http://www.commbank.com.au/corporate/research/restricted/structured-finance/investor-guides/2011/180310-SWAN_Trust.pdf So four issues - two outstanding - are those borrowers still making repayments and to who? This is starting to look far worse than "double dipping"!!!! Below is the full prospectus for one of the issues. So far I have located two prospectus .... http://www.commbank.com.au/about-us/securitisation/pdf/swan-trust-reports/Series_2002-1E_Swan_Trust_(Redeemed)/Offering_Circular/OfferingCircular_2002-1E_Swan_Trust.pdf   Check out the structural diagram on page 20!   Section 4.6....why is this sooooo important!   4.6 Equitable Assignment    The Housing Loans will initially be assigned by the Seller to the Issuer in equity. If the Issuer declares that a Perfection of Title Event  has occurred (see...
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While bank bashing can be a very satisfying blood sport -- "rampant litigation" is not a very sensible way to run a financial system.  Out of court settlements promote ‘moral hazard’ and as customary the terms of the settlement contain "no admission of liability" by NAB, thus let "off the hook" 11 non-exec directors who collectively pulled down $4million in 2012, notwithstanding a class action by investors, who claimed to have lost money on the bank’s exposure to 'toxic' CDOs, and notably most of these directors were in place at the time of the "offending behaviour".  So who is actually paying for the settlement? Shareholders. NAB is slugging one set of shareholders this year for (allegedly) misleading another set of shareholders in the past. Moreover, another "line-item" shows NAB claimed a $40m "income tax benefit" against “litigation expense”, neatly picked up by "the taxpayer".  In its 2012 performance review, the bank lauded its “reputation-building initiatives, like doing more for our customers, investing in our own people and addressing our broader role in society”....
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  • doyla66
    doyla66 says #
    NAB$ters directors's held "conflict of interest" --act with impunity, no civil-criminal-salary-bonus' penalties--due to prepondera
  • doyla66
    doyla66 says #
    It seems we get what we pay for in legal firms. It's possible we never hear about the great settlements, either with Banks or othe
  • doyla66
    doyla66 says #
    I can identify with Opes Prime. It was the forerunner that brought down Bill Express & that affected newsagents Australia-wide. (B
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AOFM's $25 billion Papier mache binding program -- the securitisation of YOUR mortgage or "promissory note" without notice given, nor "tranche" specific identity being lawfully furnished to the home-owner --has now employed an information "censorship regime". Australian Office of Financial Management ["AOFM"]--the  designated responsible-entity as "gate-keeper" of AOFM public records and/or program details, purports transparency thru it's "website" --created for the specific purpose of timely informing the tax-payer of AOFM's "massive" Residential-Mortgage-Backed-Securities ["RMBS"] purchasing program--folly. However, nothing could be further from the truth, as relevant AOFM material "downloads" present fully "white-outed". Ummm...does this have a familiar tone, ala fraudulently "white-outed/manipulated" bankster loan application forms [LAF] --the genesis of the RMBS fraudulent process? The AOFM's Website states the following: " A summary of AOFM participation in RMBS transactions is available via the following link:~  AOFM participation in RMBS transactions " Go figure???? Furthermore AOFM intends to "frustrate" the user of it's website by allowing some files to be "downloaded" whilst hindering "others"  For example: AOFM implemented "measures" put in...
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....interesting times it be..... DTCC Statement on Condition of Securities Vault New York, NY, November 14, 2012 – The Depository Trust & Clearing Corporation (DTCC) has begun the initial phase of recovering the contents of its securities vault. Our analysis of the condition of the vault, once we were able to open it, was that significant flooding and water damage occurred throughout the facility. While it is premature to determine the full extent of the damage, it is essential to begin the restoration process to avoid further deterioration. DTCC has retained highly-recognized, well-respected disaster recovery and expert restoration firms to work with on this important effort in order to carefully and diligently address the challenges resulting from the damage caused by Superstorm Sandy. “Our analysis of the condition of the vault, once we were able to open it, was that significant flooding and water damage occurred throughout the facility,” DTCC said...
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  • doyla66
    doyla66 says #
    "...a robust certificate inventory file with ownership information..." hmmmm - I haven't heard a word from Treasury about my RMBS
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Australian Office of Financial Management [AOFM] or simply a "RMBS ~Toxic Waste Dump": AOFM's Opening Statement ["the statement"]:- mischievously re-labels clear & present fraud as "low-doc PRIME loans"; ignores credibility voided Ratings Agencies' fudged RMBS "AAA" purported status; No loan application form and/or process "integrity" checks necessary --as there's simply NO EVIDENCE OF FRAUD; and asserts..."is 'clearly' a matter for the financial industry ["the perpetrators"] to organise, practise and 'monitor' [and]..it would simply not be practical [or reasonable] for the AOFM to employ the substantial resources required to 'vet the detail' of every mortgage behind every RMBS transaction." Being practicable, --a good [indeed reasonable] start would be to "rifle-shot" target the low lying "fruit from the poison tree" [vis a vis "shotgun" approach 129,000 "unsafe/unclean" loans] a measly basket full of only 2000 "low-doc PRIME loans", declared present & counted on AOFM's books, begging for a "reprieve" --in God's mercy".   Such gross mis-diection employed craftily by AOFM's ill-conceived Statement, is simply incomprehensible given...
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  • doyla66
    doyla66 says #
    The loose low-doc lending practices of the property boom are coming back to haunt the market. According to Fitch, low-doc loans ar
  • doyla66
    doyla66 says #
    AOFM--obfuscates/misleads Senators: issue re 2000-lowdocs [1.8%/loan-pool]--AOFM morphs/argues vetting 129,000 "not practical" !!!
  • doyla66
    doyla66 says #
    I know what you mean, Wayne. They trot out standard phrases that everyone seems to have taken to be true for years. Now we're sayi
  • doyla66
    doyla66 says #
    AOFM spouts pure 'meaningless waffle' trying to dodge any responsibility. "WILLFULL BLINDNESS" is he term. Hear no evil, see no ev
  • doyla66
    doyla66 says #
    Indeed Wayne--S&P: Aust could follow Spain's credit descent--risks losing its AAA credit rating if it is unable to get its federal
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