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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ANZ releases an RMBS filled with loans originated by FirstMac Fiduciary Services P/L and HSBC Bank Australia Limited. Insane...56% lo docs and 44% no docs in preliminary pools.     Lo docs No docs   ANZ announces A$710 million RMBS   For release: 13 February 2007 http://www.anz.com/aus/Corporate/About_Us/PDF/A710million_RMBS.pdf   ANZ announces A$710 million RMBS ANZ announces FirstMac Mortgage Funding Trust Series 1-2007 Trust, a A$710 million Residential Mortgage Backed Securities transaction.   The Transaction is supported by a portfolio of prime reduced documentation loans including Low and No Doc loans. ANZ Investment Bank (“ANZIB”) is acting as Arranger and Joint Lead Manager. Macquarie Bank Limited (“Macquarie’) is Joint Lead Manager and HSBC Bank plc (“HSBC”) is Co-Manager. Pricing is expected on or before 23 February 2007. Legal final maturity is February 2038 and settlement is expected 29 February 2007.   Key features of the transaction include: • Super Senior Structure • The Trust...
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The Coalition’s housing war on youth By Guest in Australian Property at 2:45 pm on April 13, 2017 | 21 comments By Rob Burgess, cross-posted from The New Daily: https://www.macrobusiness.com.au/2017/04/coalitions-housing-war-youth/ It is almost unbelievable that the Coalition is still fighting internally over whether or not to allow young Australians to use superannuation savings to help fund the purchase of their first home. In political terms, it is doubly damaging. It highlights not only the weakness of the Turnbull-Morrison leadership – who know it’s a stupid idea – but also the economic illiteracy of the Tony Abbott-led forces who support it. In economic terms it is negative on every count. It would: Help pump house prices and the housing credit bubble even higher; Punch a hole in future super-funded retirement incomes; Heighten systemic risk within the banking and home mortgage sector; Shift locally created capital out of productive investments and into a...
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The Great Recession of 2007-2009, which has been morphing into a Depression,  This correlates with an article by Philip Soos in the Guardian on 5 February 2016 https://www.theguardian.com/business/2016/feb/05/public-debt-is-not-the-issue-thats-just-a-neo-con-scare-campaign   So what is the hidden Government agenda?  Why do our young people only have half jobs?  Why do we have the second highest DEBT in the WORLD??    Do we not see the danger we will all be dragged into?   Why are regulators pretending/lying/in denial re the FACT that The LENDERS ARE TO BLAME. Government debt can be dealt with internally and need never to be paid off. Household high debt levels can cause a depression as seen in 1929.  Over issue of credit card and mortgage debt by Bankers so everyone defaulted as soon as an industry lull in farming caused mass unemployment, mass defaulting on loans, property prices dropped small businesses forced to the wall due to non spending...
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Thus, the exposure of criminality at the very top of Britain’s banking and regulatory establishment was the result of a private claim against the bank, and not the actions of the Serious Fraud Office or Financial Conduct Authority. Again, the BBC had nothing to say about the “financial watchdogs”, whose real role is to support and protect the financial institutions.   The financial aristocracy can defraud, steal and plunder with impunity, knowing it will be protected by the thoroughly corrupt political system it controls and uses as its marketing agent around the world. The rampant criminality is not the result of “bad apples.” Illegality and corruption are intrinsic to the system and start from the very top. Medcraft said Libor did not impact on mortgages????   He is 'Dreamin' or corrupt! Libor fraud and the Bank of England Posted on April 13, 2017 by petrel41   https://dearkitty1.wordpress.com/2017/04/13/libor-fraud-and-the-bank-of-england/   This video from...
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It’s been normal practice since the 1990’s Libor: Bank of England implicated in secret recording By Andy VerityBBC economics correspondent http://www.bbc.com/news/business-39548313 Watch the report on utube    https://www.youtube.com/watch?v=E_QJ6PcyWyU A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down. Libor is the rate at which banks lend to each other, setting a benchmark for mortgages and loans for ordinary customers. The Bank of England said Libor was not regulated in the UK at the time. The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England. 'Serious pressure' Libor, the London Interbank Offered Rate, tracks...
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TOXIC LOANS STILL BEING SOLD IN AUSTRALIA: Is the exposure to the Australian economy of likely property crash due to: 90% toxicity or the official 40% of loans being sold? Or is the truth, somewhere in the middle of fudged bank and regulatory stats?   PM Malcolm Turnbull's dilemma is this: approximately 90% of loans on the market for sale are most likely toxic INTEREST ONLY LOANS and are called LOW DOCS and of course we have the evidence to prove this. Sellers confirm this. Government kept telling Parliament for years; that only 10% Low Docs were being sold, and recently agreed there 'maybe' a possible 40%. Professional property investors knew the risks with bridging loans and purchased Interest Only mortgages for short term gains. That figure is the likely 10% suggested. The ARIPS (Mums and dads low income no debt) were 90% of the market sold, and had no...
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Superannuation for house deposit proposal fuels rift within Federal Government ABC News12 April 2017 Caitlyn Gribbin   A controversial proposal to allow young people to use their superannuation to buy a home is causing growing division in the Federal Government, with one MP labelling the proposal "mad," while a Cabinet minister is urging his colleagues to consider the idea. The proposal, which could see young Australians divert compulsory super payments into a special account, is being discussed in the lead-up to the May budget. The ABC understands Scott Morrison supports the idea, which has also been backed by former prime minister Tony Abbott. Resources Minister Matt Canavan has also thrown his support behind the plan and told the ABC while it is ultimately Mr Morrison's decision, his colleagues should be open-minded and "consider all these elements". "This is, I think, a legitimate idea — it's had support from people like Paul...
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APRA trying to rein in non-banks: Firstmac Australian Financial Review Apr 3 2017 4:54 PM Larry Schlesinger   The "invisible hand of APRA" is trying to rein in mortgage lending by non-banks to property investors, according to the country's biggest non-bank lender, Firstmac. Speaking to The Australian Financial Review after the prudential regulator announced new bank lending limits on interest-only loans last week, Firstmac CEO Kim Cannon and CFO James Austin highlighted APRA's comments on "warehouse facilities" provided by banks to other lenders. These warehouse facilities provide the upfront wholesale funding that allows non-banks like Firstmac, Liberty Financial, Pepper and some of the smaller banks to write home loans, which they then securitise and sell to overseas investors. Alongside a suite of new macro-prudential measures aimed at reinforcing sound lending practices, APRA said it was "monitoring the growth in warehouse facilities provided by ADIs to other lenders". "APRA would be concerned...
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The Big Guys Work For The Carlyle Group By Melanie Warner Fortune.com 3-11-2 http://rense.com/general21/car.htm ...Arthur Levitt, who just left the SEC, also work for Carlyle https://theconversation.com/blockchain-a-regulatory-unicorn-52673   Blockchain – A Regulatory Unicorn? January 2, 2016   Never one to let a bandwagon pass by, Greg Medcraft, the Chairman of the Australian Securities and Investments Commission (ASIC), has enthusiastically hopped onto the Blockchain wagon. Mr Medcraft has seen the light and recently proclaimed “Blockchain is an important technology development that has the potential to change fundamentally the world’s capital markets.”  This is a hugely extravagant claim for what is a basic, if very elegant, piece of computer code. And Mr Medcraft is not alone. None other than Arthur Levitt, the esteemed ex-Chairman of the Securities and Exchange Commission (SEC), has also been converted. And banks, such as Commbank, have eagerly embraced this “next big thing”.   https://en.wikipedia.org/wiki/Arthur_Levitt    Arthur Levitt Jr. (born February 3,...
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Housing curbs reflect genuine concerns, says ABA's Anna Bligh Australian Financial Review Apr 3 2017 11:00 PM James Eyers   New Australian Bankers' Association chief executive Anna Bligh says it won't be her Labor background that helps the banks fend off a royal commission but actions that convince customers they are valued as much as shareholders. The former Queensland premier has also backed moves by financial regulators targeting interest-only loans, saying they have presumably acted on "genuine and well-evidenced concerns". Just a few hours into her first day on Monday as boss of the banking industry association, Ms Bligh warned that political pressure on the sector isn't going to abate any time soon because it reflects real customer anger that has resulted in an "erosion of trust" in the industry. "I think the public want to see action and I know the government wants to see more action from banks," she...
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APRA interest-only crackdown a blip for lenders The Australian 12:00am April 5, 2017 Michael Bennet   The banking regulator’s latest steps to rein in interest-only lending to homebuyers have been dubbed largely irrelevant to bank profitability, amid warnings of a train wreck in coming years as borrowers struggle to ­refinance. About 83 per cent of interest-only loan holders expected to roll their mortgage to another interest-only loan, which typically lasted for five years before borrowers had to start paying principal, and keep doing so, researcher Digital Finance Analytics said. It said 669,000 households, or 21.8 per cent of borrowers, were experiencing some mortgage stress, up 1.5 per cent from the previous month, after stagnant income growth and recent out-of-cycle interest rate increases by the banks. Morgan Stanley strategist Chris Nicol said mortgage repayments could “step up” between 50 per cent and 70 per cent when interest-only loans switched to principle and...
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Mortgage crackdown to crimp borrowing capacity Australian Financial Review Apr 4 2017 11:00 PM Jonathan Shapiro, James Frost   A mortgage lending crackdown could cut in half the amount a typical household can borrow once higher living expenses and greater interest rate buffers are applied. A typical couple with an existing mortgage would see borrowing capacity reduced from $450,000 to about $235,000, according to Fitch Ratings, which presented a worked example to clients in 2016. The analysis was in anticipation of tougher lending standards that would require lenders to assume higher interest rates and living expenses when writing mortgages. It shows that tougher enforcement of responsible lending has the potential to take credit out of the system by dampening the borrowing capacity of households keen to get a foothold into a rising market. It follows steps announced by the Australian Securities and Investments Commission to up its surveillance of lenders and...
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Interest rate hikes ‘threaten financial system’ The Australian 12:00am March 27, 2017 Michael Roddan   Rising interest rates for property investors are increasingly posing a threat to the stability of the financial system, according to a growing number of economists and analysts, but the chief executive of the Property Council of Australia Ken Morrison says there’s nothing to worry about just yet. Commonwealth Bank was among nine of the nation’s banks to hit investors with surprise interest rate hikes on Friday, after National Australia Bank sparked an industry-wide repricing last week that has seen the nation’s largest lenders, including ANZ and Westpac, charge between 23 and 28 basis points extra for a number of investment loans. The hikes were made independently of any move in the Reserve bank’s official interest rate. But as rampant investor lending continues to come under closer scrutiny, a confluence of potential policy changes and market dynamics...
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CBA to mortgage brokers: Beat rivals by churning Australian Financial Review Mar 26 2017 5:17 PM Duncan Hughes   Commonwealth Bank of Australia is encouraging brokers to churn mortgages rather than lose borrowers to competitors who are offering hot incentives to switch lenders, analysis of offers reveals. It comes as new strategies from major and smaller lenders rapidly emerge in response to changing regulatory, funding and marketing pressures, according to bankers and market analysts. CBA has written to brokers with clients concerned about rising rates to consider seven alternative strategies involving its existing product range. "With the introduction of new reference [interest] rates for investment home loans and the change to rates for interest-only investment home loans, you may see an increase in customers wanting to switch product types or change their repayment type," the bank stated in a memo to mortgage brokers. The memo went on to outline alternative loan...
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ASIC enforcement taskforce recommends tightening bank rules to protect customers Sydney Morning Herald April 11 2017 - 12:00am Sarah Danckert   EXCLUSIVE  Banks, financial services houses and credit companies will face public naming and shaming over bad behaviour in a suite of major reforms being considered by the Turnbull government. However, the reforms put forward by the Australian Securities and Investments Commission enforcement review taskforce do not include naming the executives in charge of the division and the division in which the breach occurred, as recommended by the recent parliamentary inquiry into the banking sector. The proposed public breach reporting regime will be delivered on an annual basis to consumers and will list the licence holder, i.e. the bank or financial services house, where the breach occurred. The proposed breach register is part of a wider set of reforms included in a position and consultation paper that will be released by...
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Loan limits firm up Australia's AAA rating but risks remain: Moody's Australian Financial Review Apr 10 2017 6:31 PM James Eyers   Australia's prized AAA credit rating could be firmed up by the prudential regulator's moves to target interest-only loans, according to Moody's, but the credit ratings agency is concerned that elevated household debt may amplify economic risk if housing markets turn sour. Moody's Investors Service said to the extent new lending limits imposed on the banks by the Australian Prudential Regulation Authority cool growth in household debt and reduce mortgage risks, "the measures are supportive of the sovereign's credit profile". Yet the ratings agency said Australia's household debt - which at 120 per cent of gross domestic product is the second highest in the advanced economies after Switzerland and the highest in the Asia Pacific - have added in extra risks for the economy. "Elevated household debt, only buffered by...
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Do-Nothing Malcolm under pressure over negative gearing flip-flop By Unconventional Economist in Australian Property at 12:12 am on April 10, 2017 | 1 comment By Leith van Onselen   https://www.macrobusiness.com.au/2017/04/nothing-malcolm-pressure-negative-gearing-backdown/   Last week, the ABC released details of a Freedom of Information (FOI) request, which revealed that the Turnbull Government performed a back-flip on reforms to negative gearing and the capital gains tax (CGT) discount in the lead-up to last year’s Federal Budget: Federal Cabinet formally examined the impact of tax breaks on Australia’s booming housing market in early 2016 but decided not to act, an ABC investigation has revealed. …instead of making changes last year, the Coalition embarked on a blistering campaign against Labor’s plans to curb property tax concessions. That is despite the issue being considered at the highest levels of the Turnbull Government as early as February 2016. This followed details from my cousin’s book, which revealed that...
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Morrison flags sweeteners for super to fix affordability crisis Australian Financial Review Apr 10 2017 12:01 AM Jacob Greber   Super funds and other large pools of capital are being challenged to help fix the nation's worsening housing affordability crisis, with Treasurer Scott Morrison hinting at plans that would provide fresh incentives for private investment in homes for low-income Australians. In a major speech on Monday that slams as an abject failure the current national affordable housing agreement with the states – which has cost $9 billion over eight years and yielded 16,000 fewer public housing dwellings – Mr Morrison will make the case for a significant policy rethink. "We don't need to spend more, and it's not necessarily about spending less, provided we spend it better," Mr Morrison will say, pointing out that public housing waiting lists have risen from 177,700 to 187,000 in that time. "You simply despair. "This...
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The great housing bubble arse-covering begins By Guest in Australian Property at 12:20 am on April 10, 2017 | 0 comments Cross-posted from Rational Radical.   https://www.macrobusiness.com.au/2017/04/the-great-housing-bubble-arse-covering-begins/   Well this is all getting very exciting isn’t it?! The hills are suddenly alive with the sound of housing bubble music. Never mind that a growing mosh-pit of ‘doomsaying’ international economic peak bodies, ratings agencies, investment houses, economists, researchers, entitled Gen-Y bloggers with an axe to grind, and the odd journalist and politician have been rocking out to this bubble tune for the best part of a decade (or more). We are somehow to believe that we’ve only just pushed play on the soundtrack of dangerous and devastating debt-fuelled asset inflation, rather than the truth that a megaphone has simply been retrofitted to the broken little music box that has been gathering dust on the proverbial shelf of values Australians once cared about,...
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ASIC’s Greg Medcraft predicts 'the crowd' will destroy bank models Australian Financial Review Apr 9 2017 11:00 PM Alice Uribe   Australia's banking model faces a probable break-up as global technology firms enter the local market and the consumers become more empowered, the corporate regulator has warned. Australian Securities and Investments Commission's chair Greg Medcraft said that familiar banking models would be seriously disrupted in the near future. "I think given that what we're seeing in the pressures that are emerging from trust, I think the big issue in banking is that we will see the banking models get disrupted in the next few years and they will probably break up," Mr Medcraft told The Australian Financial Review. "The markets will probably force them to break up. I think you will see the technology giants enter the banking system. Clearly where we see massive investments in fintech around the world are...
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