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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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Joe Hockey lobbied for Helloworld: paper 5 hrs ago 20 February 2019   http://www.msn.com/en-au/news/australia/joe-hockey-lobbied-for-helloworld-paper/ar-BBTOVs7?ocid=ientp Australia's US ambassador, Joe Hockey has been dragged into the row involving travel services company Helloworld, in which he owns shares. Mr Hockey, a good friend of Liberal Party treasurer Andrew Burnes who manages the company, asked staff to meet a representative of the company in 2017, The Sydney Morning Herald and The Age report. Finance Minister Mathias Cormann on Tuesday had to defend a family holiday booked through the company in January 2018. The senator paid $2780 for the flights to Singapore after it was revealed on Tuesday he got the holiday for free. "The travel booked through Helloworld back in July 2017 was on commercial terms and should have been charged to my credit card straight away as instructed by me at the time," Senator Cormann said in a statement on Tuesday. "That is what...
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And there’s the external shock to finish off housing Macro Business 12:21 am February 22, 2019 David Llewellyn-Smith   There it goes. The Australian property bubble is bursting and it is not going to be pretty. MB has previously posited an ultimate fall in house prices of about one third in real terms from respective city peaks over two price fall periods. That could translate to a 40% fall in real terms over the long term. The first leg was supposed to be 10-15% in short order and the second over the longer term similar as China structurally slowed one way or another. As of yesterday the second leg has been brought forward. The Australia/China relationship is in meltdown. Indeed, as mentioned earlier this week, it has degenerated so much that we might call it an “economic war”. Australia has banned and blocked Chinese interests in everything from politics to telecoms...
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Forced End of “Ponzi-Like Leverage” & “Fraudulent Lending” Turns Australia’s House Price Bubble into “Property Bloodbath” Wolf Street Feb 20, 2019 Wolf Richter   As investors are fleeing Australia’s housing bust, sales of new houses have plunged to record lows, and home prices in the Sydney and Melbourne metros have dropped 12% and 9% from their respective peaks in mid and late 2017. Combined, the two metros account for about two-thirds of residential property value in Australia. A two-decade-long housing boom, interrupted by only a few minor dips, led to two of the most magnificent housing bubbles in the world, and they’re not “plateauing” or anything. The over-ripe bubble was pricked not by rising interest rates – the Reserve Bank of Australia’s policy rate remains at record low – but when bank regulators finally started to crack down on some of the bank-lending shenanigans required to inflate that kind of bubble,...
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Home loan arrears at highest since 1996: S&P Sydney Morning Herald February 21, 2019 12.00am Clancy Yeates   The proportion of borrowers who are behind on their home loan payments has edged up to its highest level in more than two decades, with Queensland and Western Australia driving the rise. Figures from Standard & Poor's on Wednesday showed the share of home loans that were more than 90 days behind on their scheduled payments had risen to 0.75 per cent in December, up from 0.73 per cent in November, and 0.65 per cent in January 2018. Although still low in absolute terms, it was the highest level since the credit ratings agency began collecting the data in 1996. S&P credit analyst Erin Kitson said the proportion of home loans that were more than 90 days behind, known as being "in arrears", was still "quite low," but it had been creeping up...
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Greens call for tripling of bank levy to raise $41 billion Sydney Morning Herald February 21, 2019 12.01am Shane Wright   EXCLUSIVE  The Greens want a threefold increase in the levy on the nation's big banks in a move it says would raise almost $10 billion over the next three years and help smaller institutions woo new customers. In a policy that the independent Parliamentary Budget Office assumes would be mostly paid for by customers and shareholders, the Greens are demanding the levy be increased to 0.05 per cent from its current level of 0.015 per cent. The levy, which is tax deductible for the banks, is expected to raise $1.65 billion this financial year. Under the Greens proposal, it would raise an additional $2.8 billion in its first year of operation before increasing to $3.4 billion. Over a decade, the higher levy would raise an extra $40.2 billion, according to...
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‘Let the bloodbath begin’: House prices in Sydney and Melbourne ‘could halve’ in worst crash since 1890s news.com.au February 20, 2019 2:21pm Frank Chung   House prices in Sydney and Melbourne could fall by up to 25 per cent this year alone and “there’s a chance they could fall by half” in the coming “property bloodbath”, an economist has warned. LF Economics founder Lindsay David, who has been warning of the looming property crash for the past five years, said in a report today the recent house price falls were just the beginning. CoreLogic data for January showed Sydney and Melbourne prices were now 12.3 per cent and 8.7 per cent down from their respective peaks in July and November 2017, with Melbourne falling at “the fastest rate ever seen”. “We think there’s a chance property prices could fall by half in Sydney and Melbourne over the long run,” Mr David...
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Foreign investment in Australian real estate collapses The New Daily 3:09pm, Feb 19, 2019 Isabelle Lane   Foreign investors have abandoned the Australian real estate market en masse, new figures reveal, with economists now forecasting steeper house price falls and a Reserve Bank interest rate cut. The value of approved purchases of Australian housing by overseas investors has collapsed since the property price bubble burst in 2017, new data from the Foreign Investment Review Board shows. Foreign investment plunged by 58 per cent year-on-year from $30 billion to $13 billion in the 2017/18 fiscal year – the lowest level in nearly a decade – FIRB found. The data shows foreign investor enthusiasm for Australian homes continuing to wane, following on from a 59 per cent plunge in foreign investment in 2016/17. The figures show foreign investment in real estate returning to pre-property price boom levels. Foreign investment in Australian property experienced...
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The economy is at risk of a 'doozy recession', claims bear Gerard Minack Australian Financial Review Feb 20, 2019 10.50am Duncan Hughes   The economy is at risk of a "doozy recession" as the housing downturn accelerates at an "alarming pace" weakening consumer sentiment, warns former Morgan Stanley global strategist Gerard Minack. Mr Minack, who is known for calling the global financial crisis, said a recession would drive cash rates to zero, 10-year bond yields to 1 per cent and the Australian dollar to $US60 cents. The likelihood of a recession should become clear around the time of the May federal election, forcing economic management to the top of the political agenda. He claims it could bring forward the calling of the campaign if conditions deteriorated and could also lead to the RBA cutting cash rates before the election is called, he said. "It's ugly," said Mr Minack about the bear...
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Treasury warns on housing downturn risks, backs go slow on mortgage brokers Australian Financial Review Feb 20, 2019 11.43am Matthew Cranston   Treasury Secretary Philip Gaetjens has warned that "falling house prices could also cause consumer spending to be weaker than forecast" and said "care must be taken" on mortgage broker reforms. Mr Gaetjens told an estimates committee that government needed to remain fiscally disciplined at a time where debt to GDP was now at 14.6 percent and risks were now falling house prices. "With new risks emerging it is vital that discipline be maintained," Mr Gaetjens said. "Falling house prices could also cause consumer spending to be weaker than forecast." Mr Gaetjens wouldn't give any view as to where Treasury's next forecasts were likely to land but said that "the downside risks appear to be more intensified" than they were at the mid-year budget update. "Central forecasts remain solid but...
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  David Morgan on why Bob Joss left Westpac, and how a mega merger with CBA failed Australian Financial Review Feb 19, 2019 11.00pm Tony Boyd   EXCLUSIVE  Westpac Banking Corp and Commonwealth Bank of Australia came close to sealing a banking mega-merger in 1998 that would have meant David Murray being appointed chief executive of the combined group, according to an official biography of former Westpac CEO David Morgan. The deal would have created a "super-bank" with 38 per cent of all deposits. But it disintegrated over "social issues" when CBA's board insisted Morgan, who was head of Westpac's institutional bank, and Westpac's chief financial officer Pat Handley, not be allowed to remain as directors of the combined board. The biography, David Morgan – An Extraordinary Life, (Hardie Grant) is written by Oliver Brown, who was given unprecedented access to Morgan and all of his contemporaries in business and politics...
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Senior bank executives facing criminal charges, ASIC warns The Australian 12:00am February 20, 2019 Michael Roddan   The corporate watchdog has flagged criminal prosecutions against senior bank executives from almost 40 investigations into alleged breaches as the government prepares to extend the time jilted customers can seek redress from banks back to 2008, the start of the global financial crisis. The Australian Securities & Investments Commission unveiled a 50 per cent increase in probes into Australia’s largest financial institutions over the past year as part of its formal response to the banking royal commission. The response, ahead of an appearance before Senate estimates today, revealed almost 40 investigations and reviews into alleged corporate and civil breaches were under way by ASIC, which had set up a “centralised’’ internal enforcement office in a bid to tackle rampant wrongdoing in the sector after it received a bruising at the hands of the inquiry...
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Toothless regulators let bad businesses run wild The Australian 12:00am February 20, 2019 Kenneth Wiltshire Dr Kenneth Wiltshire is emeritus professor at UQ Business School   There is a clear lesson to be drawn from the Hayne banking royal commission final report: we’re not particularly good at regulation. Quite correctly, Kenneth Hayne has sheeted home the blame for most of the atrocious behaviou­r of our banks to the banks themselves. He also has the regulators in his sights. We have long had a cultural and systemic problem in our governance when it comes to regulation of industry and the community. Academic John Braithwaite identified it decades ago in his seminal work Of Manners Gentle, in which he reveal­ed the softly-softly ap­proach­ to regulation endemic to all our regulatory regimes. Faced with the spectrum available to regulators — warnings, advertising and information, to self-regulation, licensing, penalties, jail terms, or revoking of licences...
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Regulators sought to cool property without modelling on price impact Sydney Morning Herald February 20, 2019 4.55pm Shane Wright   A crackdown on lending practices by the nation's key economic regulators that has contributed to the slowdown in the Sydney and Melbourne property markets was done without modelling of how it would affect house prices. As the Treasury said it was comfortable with the trend in house prices, it confirmed that a set of so-called macruprudential regulations endorsed by the Council of Financial Regulators were focused on credit growth rather than what it might do to the value of homes. The council, which includes the Reserve Bank, the Treasury and the Australian Prudential Regulation Authority, started introducing tighter regulations on bank lending to investors from 2015. This included a cap on the rate of growth in lending to property investors and caps on interest-only lending. There has been some criticism that...
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Captured Coalition unleashes property locust storm Macro Business 11:00 am February 19, 2019 Leith van Onselen   In the ultimate sign of desperation, the Morrison Government has rolled-out several real estate industry lobbyists to campaign against Labor’s negative gearing and capital gains tax (CGT)reforms. From The AFR: “When you converge the royal commission and APRA regulation with a big fiscal policy change you are asking for trouble,” Mark Bouris said… The biggest lobby group in real estate, the Property Council of Australia, said the tax would curtail property as an investment option because new stock was only a small proportion of overall housing that investors can buy… One of the top house price forecasters SQM’s Louis Christopher told the roundtable that if Labor’s negative gearing changes were implemented yields on investment properties would have to rise and that would mean rents would have to increase… The extraordinary gathering of interests now...
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  ASIC lending reforms ‘credit-positive’ for banks The Australian 12:00am February 19, 2019 Joyce Moullakis   The corporate regulator’s proposed changes to responsible lending guidelines would be ­“credit-positive” for Australian banks as loan quality increases, though they won’t significantly curtail the supply of credit, Moody’s Investors Service has found. Following the release of the Hayne royal commission’s final report on February 4, the Australian Securities & Investments Commission released a consultation paper seeking to give lenders greater clarity on the information they should use to verify customers’ ­financial situations. ASIC’s update to the regulatory guidance will be the first time it has been substantially changed in eight years, and comes after the widely used Household Expenditure Measure was criticised in the royal commission for understating expenses. The regulator wants to use the new guidelines to help lenders understand what it considers “reasonable steps” to verify consumer information. “The updated guidelines, if...
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  After Australia’s worst two years on record, do retailers see the problem? michaelwest.com.au Feb 19, 2019 Alan Austin   Analysts warn that Australian retailers are going bust in record numbers. Seems the Australian Retailers Association has finally joined the dots and leapt on rising household costs and low wage growth as the culprit. This is a sizable shift from crying out for corporate tax cuts.  Alan Austin reports. ROGER DAVID has disappeared after 76 years. Laura Ashley collapsed after 47 years. Avon has gone after 55 years; it just seems longer. Other Australian retailers to fold in 2018 include Diana Ferrari, Gap, Esprit, Metalicus, Doughnut Time, Shoes of Prey, Toys ‘R’ Us and Babies ‘R’ Us. Those retail collapses follow the 2017 closures of Payless Shoes, Topshop and Topman Australia, Herringbone, Rhodes & Beckett, Pumpkin Patch and others. Business analytics company Illion (formerly Dun & Bradstreet), reported late last year...
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Paladin cut deal with family of PNG powerbroker Australian Financial Review Feb 17, 2019 11.00pm Angus Grigg, Jonathan Shapiro, Lisa Murray   EXCLUSIVE  The family of one of PNG's most powerful politicians is directly benefiting from Paladin's $423 million worth of security contracts on Manus Island, awarded by the federal government in a closed tender. Documents released under Freedom of Information show in January last year Paladin Solutions PNG entered into an agreement with Peren Investment, a company controlled by the brothers of PNG's parliamentary speaker, Job Pomat. Mr Pomat is the local member for Manus, a key ally of Prime Minister Peter O'Neill and deputy leader of the ruling People's National Congress. His family are among those who claim traditional ownership of the land where the refugees are being housed. The agreement, for local employment and the provision of other services, came just a month after landowners blockaded the refugee...
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'Deep-rooted problems': PwC, KPMG, EY, Deloitte face 'serious' audit market review Australian Financial ReviewFeb 17, 2019 11.00pm Edmund Tadros   The audit work of the big four consulting firms PwC, KPMG, EY and Deloitte faces renewed scrutiny after a parliamentary committee expressed "ongoing concern" about the "deep-rooted problems in the audit market" and flagged a "serious review". The joint committee on corporations and financial services wrote that it has been "concerned for some years about audit quality" and asked the Australian Securities and Investments Commission to develop a new way to measure audit quality that produced results that are comparable over time. The committee, in an oversight report published late Friday, also concluded there should be a "serious review" of the audit market that explored issues such as the "market dominance and conflicts of interest arising from the range of other activities also conducted" by the consulting arms of the big...
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Apartments casting a shadow over the Australian economy The Australian 7:16am February 18, 2019 Alan Kohler   According to the ABS there are 225,221 apartments under construction in Australia, or at least there were last September, which is the most recent data available. Going by the building approvals data it looks the average value of those dwellings is around $400,000, which sounds about right, so there is a bit less than $100 billion worth of apartments in total being built. More than half of them — 135,000 — are in Sydney and Melbourne. Most, if not all of them, were sold off the plan. Not many developers can afford to fund a block of apartments on spec, and financiers want deposits to have been paid before lending the money. Deposits are typically 10 per cent. Sydney dwelling prices, on average, have now fallen 11.1 per cent; some places more, some less....
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Interest-only loans worth $230 billion 'trap' 650,000, warns Morgan Stanley Australian Financial Review Feb 15, 2019 6.00pm Duncan Hughes   About 650,000 borrowers with loans totalling around $230 billion are 'trapped' in their interest-only loans and could struggle to refinance, forcing many to sell into already deteriorating property markets, according to investment bank Morgan Stanley. Borrowers will need to extend the interest-only period, switch to a principal and interest loan or find a buyer for their property as their low rate terms expire, warns the analysis, which was done in conjunction with AlphaWise, a customised researcher for hedge funds and finance companies. "Almost half of interest-only borrowers are 'trapped'," the analysis warns. "These households appear high risk on a variety of metrics, and we expect added selling pressure on the housing market when their interest-only periods expire in the next two years." The warning came as ratings agency Standard & Poors...
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