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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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Denise Brailey

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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Denise

Denise

Denise Brailey has dedicated the past 20 years of her life to being a Consumer Advocate - a voice for the people and former President of RECA (Real Estate Consumer Association. She has helped thousands of investors and is currently President of the BFCSA (Banking & Finance Consumers Support Association). Denise was also awarded and presented with the Rona Oakley Award for Consumer Protection in 2010.
'Precarious': Is CBA making too much money from its customers? Sydney Morning Herald Feb 8 2018 - 12:40pm Clancy Yeates   An earnings boom in Commonwealth Bank's flagship retail banking arm has triggered predictions the division's profitability may be unsustainably high, as banks face pressure to put more emphasis on customers' interests over those of shareholders. The standout performer in CBA's result this week , which was marred by a spike in regulatory costs, was the retail banking division led by the next chief executive of the banking giant, Matt Comyn. The division includes CBA's vast consumer-facing bank, and its earnings swelled by 8 per cent to $2.7 billion, helped by a move to charge higher interest rates on property investor loans. But with regulators applying the blowtorch to the banking sector, analysts questioned how sustainable it was for CBA's biggest division to be making so much money from its customers....
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Royal commission confusion over non-disclosure The Australian 12:00am February 9, 2018 Ben Butler   Confusion reigned at the royal commission into the banks last night, just days ahead of its first day of hearings, after the Kenneth Haynes-helmed inquiry was unable to say whether it stood by a statement warning financial services victims against making submissions to it that breached non-disclosure clauses in settlement deals. The big four banks yesterday scrambled to pledge they would not enforce confidentiality clauses against witnesses to the commission after influential Nationals Senator John Williams warned that if they did not do so he would set up a parallel Senate inquiry. This would be able to receive evidence under parliamentary privilege that could then be passed on to the royal commission. Under privilege rules, witnesses to a Senate inquiry are immune to lawsuit over their evidence, even if it breaches a non-disclosure agreement. The royal commission, which...
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Ten signs we’re heading for ‘economic armageddon’ news.com.au Feb 8, 2018 3:14pm Frank Chung   THIS week’s global share market bloodbath was “a small tremor before the big earthquake” as Australia moves “ever closer to economic armageddon”, a former government economist has warned. John Adams, a former Coalition policy adviser who last year identified seven signsthat the global economy was heading for a crash — later warning the window for action had closed — believes the $4 trillion wipe-out was just the opening act of his apocalyptic prophecy playing out. “When the economic earthquake hits, don’t be surprised to see soaring interest rates, massive falls in asset prices [like] shares, real estate and bonds, higher unemployment and widespread bankruptcies,” he said. Adding to previously identified economic indicators such as household debt and record low interest rates, Mr Adams has expanded his list of warning signs to 10, including rising inflation —...
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Bad WA home loans push CBA delinquencies up to four-year high Australian Financial Review Feb 7 2018 5:54 PM Michael Bleby   CBA home loan arrears jumped in WA in the six months to December, pushing the lender's overall bad loan book to its highest level in more than four years. The largest mortgage lender, which reported a weaker-than-expected a cash profit of $4.73 billion on Wednesday, said home loans 90 or more days in arrears accounted for about 0.6 per cent of its loan book in the first half of the year as the proportion of bad loans in the mining state picked up to about 1.3 per cent, well above Queensland, the closest region in terms of arrears. "Loan impairment expense was $356 million, an increase of 1 per cent on the prior comparative period," CBA said. "The result was mainly driven by increased home loan and personal loan...
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Banking royal commission warns victims to not breach gag orders Sydney Morning Herald Feb 7 2018 - 5:48pm Sarah Danckert   The banking royal commission has confirmed it will offer no legal protections to  victims and whistleblowers if they breach gag orders when making submissions to the inquiry. The official advice, provided by the royal commission to Fairfax Media ahead of is first hearing in Melbourne on Monday, has raised concerns that the process will not detail scandals the banks have previously sought to cover up. On Wednesday, a spokesman for the royal commission confirmed it would not be overriding confidentiality agreements in settlements between individuals and the banks. “In relation to the issue of non-disclosure provisions in settlements... at this stage of the inquiry, we would not want individuals to provide information that may be in breach of legal obligations by voluntarily providing such information,” the spokesman said in response...
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Controversial China book may get parliamentary protection Sydney Morning Herald Feb 6 2018 - 1:21am Nick McKenzie, Richard Baker   EXCLUSIVE  Key members of Federal Parliament’s national security committee are backing a move to use the committee’s powers to publish an explosive book on Chinese Communist Party influence in Australia. Committee chair and Liberal MP Andrew Hastie and deputy chair Anthony Byrne, a Labor MP, are among those supporting the move despite the potential for diplomatic fall-out, according to multiple sources. Fairfax Media has also confirmed that the office of Prime Minister Malcolm Turnbull has been briefed on the deliberations of the committee and has no objection to it publishing  the manuscript. Two major publishers ditched the manuscript, by a professor of public ethics at Charles Sturt University, Professor Clive Hamilton, citing fears Beijing or its proxies would launch legal action. The publishing of the manuscript by the Joint Parliamentary Committee...
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Borrowers dump interest-only loans The Australian 12:00am February 6, 2018 Cliona O’Dowd   Borrowers continue to flee interest-only loans, with Westpac ­recording a jump in the number of customers shifting to principal-and-interest repayments in the first quarter. Westpac, which has the largest investor portfolio of the Australian banks, revealed in its latest quarterly update that borrowers moved $8.63 billion from interest-only to principal-and-interest loans in the three months to ­December 31. All up, the bank’s customers have shifted $27.25bn to principal and interest since APRA clamped down on risky lending last March. The burden of higher rates has also resulted in a plunge in the number of interest-only loans being written, revealing the extent of the impact of the prudential regulator’s crackdown on the market. Westpac, the nation’s second-largest mortgage provider, yesterday said just 22 per cent of new home loans written in the quarter were interest-only, well below the 30...
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High property prices force one-in-five essential workers out of Sydney Australian Financial Review Feb 5 2018 2:57 PM Duncan Hughes   One-in-five teachers and emergency workers have been forced to relocate to outer and regional areas because rising property prices are outpacing their incomes and capacity to save a deposit, according to academic and banking research. Many teachers and nurses earning below $100,000 are unable to live within 100 kilometres of where they work, resulting in relocation or expensive public transport or private commuting, the analysis finds. The research was commissioned by Teachers Mutual Bank, Firefighters Mutual Bank and Police Bank and undertaken by University of Sydney's Urban Housing Lab led by professor Nicole Gurran and professor Peter Phibbs. It calls for a range of public-private initiatives intended to help essential workers bridge the deposit gap, reduce land costs or develop alternative development and financing models. "Any so-called cooling of the...
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Australian banks may pose global systemic threat: Absolute Strategy Research Australian Financial ReviewFeb 5 2018 11:00 PM Jonathan Shapiro   International investors are being urged to steer clear of banks in Australia, Canada and Sweden by a leading investment consultancy, which has sounded the warning about the risk they may pose to the entire financial system if interest rates rise and the Chinese economy slows. The combined weight of these banks on world equity markets is four times larger than their share of the global economy, London-based Absolute Strategy Research (ASR) said in a note to clients. Investors were "underestimating just how damaging a group of countries that account for just 3 per cent of global GDP can be", ASR said in a12-page report sent last week to its institutional clients that include several of Australia's largest funds. "High house prices, a build-up of household debt post-GFC, and – for Canada,...
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CBA delays BBSW trial, wants details of rate-rigging Australian Financial Review Feb 2 2018 4:31 PM James Frost   Commonwealth Bank has been granted more time to prepare its defence against allegations its traders had manipulated the bank bill swap rate (BBSW) for profit after its lawyers argued the Australian Securities and Investments Commission was yet to put all its cards on the table. Kate Morgan SC, acting for the bank, made the request for additional time at a directions hearing in Melbourne's Federal Court after highlighting the bare-bones nature of the concise statement, noting The Australian Financial Review's reports that the regulator has a trove of evidence up its sleeve. "We've only got the concise statement that identifies up to three days of relevance, in the media we've seen other significant allegations being made in relation to the history and if that's included in the statement of claim we will...
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Globally, their combined revenue last year was $168 billion. If it is good enough for these four firms to orchestrate global tax avoidance, win hundreds of millions of dollars a year in government mandates – while thousands of public servants are shown the door; while it is good enough for them to pontificate to government about policy while concealing their own financial affairs, surely then it is good enough, when asked by Australia’s parliament to appear before an inquiry, for them not to respond with “get stuffed”.   Big Four, Big Donors, refuse to appear before Parliament michaelwest.com.auFeb 2, 2018 Michael West   Political donations work. Four of the world’s most powerful institutions and largest political party donors have once again treated the people and the parliament of Australia with disdain. PwC, Deloitte, EY and KPMG were invited to appear before the Senate Inquiry into the Political Influence of Donations whose...
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Mortgage stress rising among lower-income households, ME Bank report says Australian Financial Review Feb 5 2018 12:01 AM Michael Bleby   Mortgage stress has risen among lower-income households over the past six months, making those homeowners vulnerable to rising borrowing costs or job loss, ME Bank's latest Household Financial Comfort Report shows. The proportion of households spending 30 per cent or more of their disposable income – an indicator of financial stress – on meeting mortgage payments stood at 46 per cent, according to the industry super fund-owned bank's latest six-monthly survey of 1500 people. While the overall numbers were little changed from the time of the last survey in June, rising living costs and little increase in incomes was increasing stress among lower-income mortgage owners and defaults could rise if borrowing costs increased, the report said. More than a quarter (26 per cent) of homeowners were putting 40 per cent...
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Interest-only borrowers brace for mortgage crunch Australian Financial ReviewJan 17 2018 11:00 PM Duncan Hughes   EXCLUSIVE  Queensland property investor Peter Button "grabbed the profit and ran" when his interest-only loan expired and he realised that refinancing would trigger a hefty increase in repayments. "I saw a refinancing issue coming over the horizon, it was easier to just get rid of it," said Mr Button who recently sold his two-bedroom apartment in the Brisbane CBD. But he's one of the lucky ones. Thousands of home owners face a looming financial crunch as $60 billion of interest-only loans written at the height of the property boom reset at higher rates and terms, over the next four years. Monthly repayments on a typical $1 million mortgage could increase by more than 50 per cent as borrowers start repaying the principal on their loans, stretching budgets and increasing the risk of financial distress. "The...
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Royal commissioner Kenneth Hayne is forcing at least eight insurers to air a decade of dirty laundry ahead of his inquiry, including QBE Insurance, IAG, Suncorp, Allianz Australia, Zurich Australia, Westpac Insurance, CommInsure and ANZ’s OnePath Insurance.   ASIC cracks down on junk insurance sold by car dealers The Australian 12:00am January 18, 2018 Ben Butler, Michael Roddan   The banking royal commission will be urged to look into worthless “add-on” insurance sold by car dealers — usually in return for hefty commissions — after action by the corporate regulator that has so far clawed back more than $120 million in refunds for ripped-off consumers. Both Allianz, which yesterday agreed to pay $46.5m in compensation to more than 68,000 customers who bought the dud product, and the Consumer Action Law Centre, which has been campaigning on the issue, said they would include add-on ­insurance in their submissions to the royal commission....
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What kind of company sells a dud like this to its customers? Sydney Morning Herald Jan 18 2018 - 7:44am Peter Kell Peter Kell is Deputy (and currently Acting) Chairman of ASIC   It is tempting to wonder why a person might pay more than $6000 for insurance cover that was capped at a maximum payout of $6000 – or why someone would buy an insurance policy under which they were never eligible to make a claim. But the real question should be why a company would treat its own customers that way by selling them such a policy? There can be no justification for such behaviour. Unfortunately, ASIC has found these practices are all too common in the add-on insurance sector – and we are determined to see them disappear. Too many consumers have simply not understood what they were being sold. We have commenced a two-stage strategy of seeking...
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Chinese property buyers disappear in 'perfect storm' Australian Financial Review Jan 17 2018 11:00 PM Su-Lin Tan   Major Chinese developers have warned that the decline in foreign buyers in the residential property market has reached critically low levels as taxes and credit restrictions all but collapse demand. They said foreign buyers have dwindled to as low as 1 per cent of off the plan sales, down from close to 40 per cent two years ago, and as a result the total residential market could shrink by up to 20 per cent. The countrywide increase in penalties on foreign buyers - South Australia was the latest state to introduce a 7 per cent surcharge on January 1 - at the same time as banks slash lending and China imposed more capital controls have kept foreign buyers away. "From our point of view, they [foreign buyers] are disappearing severely. The banking policies,...
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Fraud and scandals costing DIY super funds billions Sydney Morning Herald Jan 20 2018 - 12:15am John Collett   EXCLUSIVE  The true cost of fraud and financial misconduct for the one million Australians who run their own super funds is more than $100 billion over the past 10 years, a new report suggests. That's more than three times higher than the $30 billion in publicly reported losses from financial misconduct and fraud for the 10 years to June 30, 2017. Superannuation research firm Rainmaker has calculated the damage is actually $103 billion once you include the loss of investment returns from no longer having the money to invest. DIY super funds are increasingly popular because many people want the flexibility to invest in a wide range of assets, including property. Tax Office records show more than a million self-managed super funds (SMSFs) held more than $700 billion in assets on June...
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Murray warns against SMSF property borrowing The Australian 12:00am January 20, 2018 Michael Roddan   The surge in self-managed super funds borrowing large sums of cash to plough into investment properties is threatening to hit the retirement savings of tens of thousands of Australians, as falling house prices and stalling rents ­reduce earnings. The fast rate of growth in borrowings has prompted renewed warnings by financial system inquiry head David Murray that market risk in self-managed retirement savings funds is “higher than it has been before”. The latest figures from the Australian Taxation Office reveal the number of DIY super funds that have borrowed from the bank to invest in property has doubled over the past five years to more than 50,000 accounts. Now, almost one in 10 SMSF owners has accessed limited recourse borrowing arrangements, which are mostly used to fund property investments. SMSF borrowing for property has ballooned from...
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Lenders offering discounts on interest-only investment loans Australian Financial Review Jan 19 2018 11:00 PM Duncan Hughes   A new round of lender discounts  is reducing the cost of investor loans by up to 130 basis points. Bank of Queensland and Suncorp are offering deep cuts to their advertised interest-only investor rates to boost their loan books, a key driver of profits for lenders. The discounts are being offered through mortgage brokers, who act as an intermediary between lenders and borrowers. Best discounts are for lower-risk borrowers with a deposit of at least 20 per cent.   Borrowers will have to complete more rigorous affordability tests than in recent years because of regulatory attempts to prevent excessive debt and cool over-heating property investment markets. That might include restricting the use of some forms of income (such as bonuses), more evidence of regular income and closer examination of household expenses (such as...
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Ian McPhee: banks need to focus on customers The Australian 12:00am January 19, 2018 Michael Roddan   Australia’s most senior bank bosses have been advised by their own industry body to adopt a stronger focus on serving customers rather than corporate interests and to get out on the front foot with staff and the community. Former auditor-general Ian McPhee, who is overseeing a wide-ranging governance review on behalf of the Australian Bankers’ Association, also warned the sector yesterday against “backsliding” on early progress, saying it was disappointing six banks had failed to meet a deadline for banker remuneration reforms. His comments come as bank executives are set to face deeper scrutiny over the next few months from the banking royal commission looking at misconduct in the sector that is set to gather pace in coming weeks. In a bid to overhaul their tainted image, banks two years ago agreed to target...
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Builders hit as demand for units declines The Australian 12:00am January 19, 2018 Lisa Allen, Robyn Ironside   Builders across Australia’s east coast are starting to feel the squeeze as demand for apartment construction weakens amid a fall-off in foreign buyers and the threat of interest rate rises. It adds fresh concern for a sector that is cooling, with analysts warning the Reserve Bank needs to carefully manage the path to rising interest rates as the economy recovers. “There is absolutely no question we have seen a considerable softening in the construction end of the residential apartment space,” Martin Monro, the managing director of listed construction company group Watpac, told The Australian yesterday. “The manipulation of interest rates would clearly impact the housing market … if people can’t see a possibility of interest rate rises they should not be buying property in the first place. “We have seen a correction because...
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Nine out of ten flipped properties sold for a profit in 2017 Australian Financial Review Jan 18 2018 6:03 PM Larry Schlesinger   Nine out of 10 properties flipped by investors last year sold for a gross profit, according to analysis by CoreLogic. Flipping refers to buying and selling a property within one or two years in the hope of making a quick capital gain by either buying undervalued property, benefiting from rapidly rising prices or from adding value in some way such as through renovation, subdivision or securing a development permit. While 89.1 per cent of homes resold within one year made a profit and 89.9 per cent resold within two years made a profit in 2017, the proportion of loss-making flipped sales is expected to rise in 2018 as house prices, especially in Sydney and Melbourne, start to ease and obtaining investor loans becomes harder. The CoreLogic figures also...
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Former CBA planner banned after cutting and pasting signatures Sydney Morning Herald Jan 18 2018 - 1:04pm Clancy Yeates   A former Commonwealth Bank financial planner has been banned from the industry for five years after the corporate regulator alleged she cut customer signatures from documents kept on file and pasted them onto new documents. The Australian Securities and Investments Commission on Thursday said it had banned Kimberly Holgate, of Wagga Wagga, for conduct that was likely to mislead clients, and was not in their best interests. Ms Holgate was an authorised representative of CBA's Commonwealth Financial Planning business (CFPL) between January 2014 and October 2015, when she was reported by CBA to ASIC and dismissed. In a statement, ASIC said it found that Ms Holgate had "engaged in conduct that was likely to mislead by cutting clients' signatures from documents held on file and pasting them onto new documents." As...
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Rising cost of essential services putting the squeeze on homes The Australian 12:00am January 15, 2018 David Uren   Government-led costs are squeezing household budgets much more than the private sector, with prices of essential ser­vices such as health and education far outstripping near-­record low inflation. Outlays on childcare have doubled in the past six years, while primary and secondary education costs for the typical household are up 50 per cent, detailed household budget figures from the Australian Bureau of Statistics show. Overall, households are spending 23 per cent more on ­essential services, with prices influenced by government, than they were five years ago, while spending on goods and services with prices set by the market is up by 15 per cent. [Which is to say, this article tries to pass off the costs of privatised and corporatised essential services as charges imposed by government. Note in the graph below that...
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Unfair loans face ‘perfect storm’ The Australian 12:00am January 15, 2018 Michael Roddan   The royal commission into banking and financial services is being urged to investigate systemic irresponsible lending in the $1.7 trillion mortgage market, as victims flood law firms with claims they’ve been saddled with unpayable debts. Josh Mennen, superannuation and insurance principal at Mau­rice Blackburn, said his law firm had seen a dramatic increase in the number of borrowers complaining about unfair credit contracts. Under responsible lending laws introduced in 2010, banks and mortgage brokers must not make loans to customers who will not be able to repay them. Lenders must also adequately test whether customers can meet repayments, and must avoid providing loans that are unsuitable for borrowers. “Despite those protections, we’re seeing that for the past decade, bank mortgage lending has been free and loose — particularly with interest-only loans,” Mr Mennen told The Australian. Interest-only...
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