BFCSA Blog

http://ochousingnews.com/blog/deflating-chinese-real-estate-bubble-destabilize-world-economy/ The deflating Chinese real estate bubble could destabilize the world economy 30 June 2014   Irvine Renter The Chinese inflated a real estate bubble more than ten times larger than the United States. Bursting this bubble could destabilize the world economy. I recently asked what would happen if the Chinese housing bubble burst. The implications for Coastal California’s real estate market is enormous as a crash in Chinese real estate would not just remove a component of local demand, it could turn Chinese buyers into desperate sellers. My sanguine attitude about the ability of lenders to maintain pricing through inventory restriction would change if desperate Chinese sellers began putting must-sell inventory on the market.  The problems in China go beyond our little niche in the real estate world. A deflating housing bubble in China could destabilize their entire financial system and disrupt the world economy.  Some in China want to...

read more   http://www.afr.com/p/national/ato_franking_credit_crackdown_targets_c1DhjFeJkLgiKzKwzZs3NN ATO franking credit crackdown targets fundies, brokers and investors PUBLISHED: 24 Mar 2014 Thousands of fund managers, stockbrokers and sophisticated investors have been hit with warning letters threatening audits and heavy penalties if they do not confess to over-claiming franking credits on shares.  Leading figures within the finance industry are fuming that the Australian Taxation Office believes it can use data matching to trawl back as far as 2010 to compare tax deductions with individual share trading records.  “Our information indicates you, or an entity closely associated with you, participated in a franking credit arrangement,” Deputy Commissioner Tim Dyce writes in one of the 3000 ­letters sent by the ATO. “In this case, two sets of franking credits have been claimed on what is effectively the same parcel of shares.” Treasurer Joe Hockey announced in November last year that the ­government would close down a ­“loophole” which allowed...

New bankruptcy fee to net Federal Government $25 million over four years PM Business reporter Pat McGrath Updated Wed 2 Apr 2014, 8:35am AEDT Photo: New charges for bankrupts will earn the Federal Government $25m over four years. (Giulio Saggin, file photo: ABC News)     The Federal Government is hoping to earn $25 million over the next four years by charging people a fee to prove they are broke. From today, filing for bankruptcy protection will cost $120, while travelling overseas while bankrupt will attract a $150 charge. It has been revealed the fees can be paid by credit card, meaning the cost could ultimately be borne by a bankrupt person's lender. The Government's decision to start charging fees to cover the costs of personal insolvency administration was announced in December's mid-year economic and fiscal outlook. Gerard Brody from the Consumer Action Law Centre says the details of the fees...

  Major bank pulls about-face on interest rate future   by Adam Smith | 18 Mar 2014   A major bank has reversed its prediction that rates are set to drop further in 2014, and is now predicting a rise next year. Westpac had previously predicted two further rate cuts before the end of 2014. Chief economist Bill Evans has now pulled an about-face, and has instead forecast that the RBA will remain on the sidelines for the rest of the year. Instead, Evans has forecast the beginning of a new tightening cycle, with the first 25bp interest rate hike occurring in the third quarter of next year. "We still see those forces operating to moderate growth and inflation pressures but now assess that better news on employment, consumption and business confidence will dampen those contractionary forces to exclude a sufficiently strong case to cut rates," he said.    http://www.brokernews.com.au/news/breaking-news/major-bank-pulls-aboutface-on-interest-rate-future-185503.aspx  ...

$3.5 billion reverse mortgage market a wasted opportunity http://www.brokernews.com.au/news/breaking-news/3-5-billion-reverse-mortgage-market-a-wasted-opportunity-179404.aspxby AB | 17 Sep 2013   The reverse mortgage market isn’t living up to its full potential and risks becoming a missed opportunity, according to Deloitte’s 11th annual study of the sector, released today. While the $3.5 billion market has clocked up more than 7% growth since 2012, the Deloitte report claims that, with the ‘tailwinds’ of the baby boomers retiring and an increasing focus on post-retirement funding, the opportunities in the equity release market are in danger of being missed by banks and other financial services organisations. As of 31 December, 2012, more than 42,000 senior Australian households had a reverse mortgage with total balances of $3.5 billion and James Hickey, the Deloitte financial services partner who led the study, says there’s obvious potential for even greater growth. “The size of the senior Australian population is set to increase by more than 50% in the...

BFCSA: Cyprus Bail Out plans for Australia. Is it enough to save our banks? Posted by Denise Brailey on Sunday, 04 August 2013 in Consumers Fight Back     To all our readers:  Yes a little quiet right now as I am busy with submission to Parliament and other urgent matters requiring my attention.  We have several things banked up to release shortly so your patience is appreciated.  new blogs will again appear at the end of this week and my thanks to those "holding the fort," in my absence.   Meanwhile I hope you are all busy sending in your own submissions and victim impact statements to the current Parliamentary Inquiry into ASIC's Dismal Performance in the area of consumerism.     Are these Banks using taxpayer funds to stay a float, indirectly or otherwise?  Yes the Cyprus Bail Out was a telling moment in time and we did warn you all....

 A new credit history system coming to affect in March (12th) will allow lenders to check an extensive list of your credit behaviour ”   Click on this link to watch this report from Today Tonight Adelaide  by reporter Bryan Seymour  Broadcast 27 February 2014    http://www.todaytonightadelaide.com.au/stories/credit-chec    organza- Posted on Tuesday, March 4, 2014 Here is the government link to read all about what has been going on  http://www.oaic.gov.au/privacy/privacy-law-reform/credit-reporting-reform  AND I can't wait to view Today Tonight's next story "Broker Banks" by reporter: Leisa Goddard Broadcast: Tuesday 4th March 2014   Here is that link, however at this time it was not uploaded.. So you must definitely check back later..  http://www.todaytonightadelaide.com.au/stories/broker-banks Emailed in by a BFCSA member who watched the Today tonight program Broker Banks live... CBA owns 80% Aussie and 21% owns another. NAB owns 100% of  Choice, Plan and Fast Westpac owns 100% of RAMS......... Really highlights the "cosy relationship" the banks...

APRA’s domestic ADIs property exposure data for the December 2013 quarter By Cameron Kusher on February 25, 2014 in Economics, Housing finance, Research   Each quarter the Australian Prudential Regulation Authority (APRA) publishes data on the exposure of Australian Authorised Deposit-taking Institutions (ADI).  The data is extremely useful as it provides highlights of all outstanding exposures (mortgages) and also some information about those written over the quarter. The data indicates that across all ADIs, 66.7% of the value of outstanding loans is to owner-occupiers with the remaining 33.3% to investors.  Over time there has been little change to these proportions indicating pretty much a two thirds owner occupier to one third investor split. Looking at the type of loans mortgagees have is also interesting. At the end of 2013 a record high 34.6% of all mortgagees had a loan with an offset facility.  The figure was up from 34.2% over the...

By Rob Taylor and David Winning CANBERRA, Australia — Australia is readying a plan to sell 130 billion Australian dollars ($117.49 billion) in assets ranging from health insurers to electricity poles, hoping to set an example to cash-strapped governments around the world that need new funds to boost their economies. Treasurer Joe Hockey, who will chair a meeting of finance ministers and central bankers from the Group of 20 developed and developing nations this month, said Australia’s conservative government was finalizing a deal with state counterparts to prioritize assets and businesses that could be sold to private investors. “We are going to free up the capacity to get on with the job of building things,” Mr. Hockey told The Wall Street Journal in an interview at his parliamentary office in Canberra. “We’re going to form a partnership with the states that is going to be rolled out over the next few...

" Criminologist Denise Brailey, who runs the Banking and Finance Consumers' Support Association (BCFSA), said the airlines were using their loyalty schemes as a sort of "trojan horse" to push unwanted and potentially illegal financial products out to consumers. “People should be writing to ASIC and letting them know their utter horror that these companies would be able to issue unsolicited products while the regulator gives them a green light,” she said. http://www.smh.com.au/business/banking-and-finance/qantas-and-virgin-skirting-the-law-with-unsolicited-card-mailouts-20140130-31ol2.html#ixzz2rw6WK2R5   MasterCards for 16-year-olds in massive frequent flyer mail-out MICHAEL WEST 30 Jan, 2014 04:30 PM  Qantas and Virgin Australia have embarked on the biggest mail-out of unsolicited debit cards in the country’s history, sending MasterCards and Visa cards to up to 12 million frequent flyer program members. There is more than one catch to this unique event however. Not only are the cards unsolicited – a tactic which appears to breach federal payment card laws – but,...

Copies of Loan Application Forms were not given to me even though I asked. I was told they go to the bank. Retrieved copies in 2012 as suggested by Denise. Three banks involved. Bendigo Bank (the main player) multiple loans including buffers and lines of credit to help me pay off their loans. (very generous of them). I did not understand what a line of credit was, it was explained to me as "It's there if you need it for a holiday etc. if you don't use it it just sits there, (what a load of crap). It was used to help pay off the loans. WE were told there was no risk and would help- financially.  The thing was we were not told about the honeymoon period, we were told payments planned for us would be better off and affordable and then WHAMMO payments were hiked up to 55% higher...

  Media release 84/2012 - 1 November Last updated: 25 October 2013 Finance provider Heritage Financial Solutions Pty Ltd has paid $17,000 in relation to an infringement notice for calling numbers on the Do Not Call Register. The Australian Communications and Media Authority's investigation found that calls promoting Heritage Financial Solutions were made, without checking the numbers against the register. Alerted to the problem through complaints, the ACMA found Heritage Financial Solutions did not adequately supervise the activities of its telemarketers." Members of the public can opt out of receiving unsolicited telemarketing calls and marketing faxes by calling 1300 792 958 or by visiting www.donotcall.gov.au.      ...

Comment from one of our many readers. Domenic - Posted on Thursday, January 16, 2014 Denise I was appalled to find out from my FOS Senior Case Manager that the Banksters have been, by passed legislation only last year he believed, allowed to destroy all original documentation and store everything as electronically scanned versions. I find it incredible firstly that some political moron would even consider this a valid request from the Banking fraternity let alone table it and get enough support that it get passed into LAW. This must have happened during the last days of the trauma filled previous Government and flew by unnoticed as there were so many things dominating the news at the time such as the debacle of their leadership spill and outward bickering. It probably slipped under the radar as an add on and another favour from Mr Swan to his Bankster buddies as...

Warning to home buyers as banks make obtaining a home loan easier DARYL PASSMORE, MICHELLE HELE THE COURIER-MAIL JANUARY 11, 2014 12:00AM       With interest rates unlikely to move in the next quarter, competition is expected to increase this year.Source: Getty Images LENDERS are making it ­easier for homebuyers to get mortgages and promising fierce competition as the property market heats up. The majority of home loans lenders are allowing deposits of 5 per cent or less and some mortgage brokers have no ­deposit loans schemes. "It's definitely an extremely hot market,'' Alex Parsons, CEO of leading financial ­comparisons website RateCity, said. "Competition is fierce.'' EDITORIAL: THERE'S NO BETTER TIME TO BUY BUT BEWARE THE BUBBLE Mr Parsons said lenders were loosening their purse-strings close to pre-Global ­Financial Crisis levels, which peaked at 86 per cent in 2008 but fell back to 49 per cent in 2010. Banking watchdog, the...

Credit Card balance transfers warning.. Here is cc's comment                    Tuesday, 07 January 2014 ·                          "and what about being tricked into thinking you can TRANSFER ALL debt from old credit card to new one at reduced rate for limited time.. This is bollocks.. because instead of having the intention of cutting up the old card I now have two credit cards! My application for balance transfer to new credit card was done on line easily enough and I was expecting to be able to transfer all to the new credit card. Congrats, approval comes back... however only 3/4 of existing credit card debt to be transferred , so now I am stuck with 2 cards.. both have high limits (over $10K) This is not what I was led to believe by all those "money gurus" on Current affair shows etc telling us to transfer all our credit card debt to a lower...

johntyd Sunday, 15 December 2013 Please Explain How does doctoring loan applications to secure loans disadvantage the borrower? It means the borrower is receiving a lower interest rate relative to their real credit risk. What this practice does is to perpetrate a fraud upon bank shareholders and regulators that misrepresents the bank's loan portfolio as being safer than it actually is. If interest rates rise or realty prices fall that affect repayment or equity rates the increased prospective or actual default that will occur will see everything fall in a heap sooner than the presumed margin of financial safety. The risk here is the bank engaging in reckless lending practices - just what the GFC was all about. This services the current real estate price bubble that is going to eventually crash everything. Denise Brailey Sunday, 15 December 2013 · Yes John, the ROT RUNS DEEP. Doctoring Loan Applications is a fraud...

A new comment is posted on the blog post: BFCSA: "ASIC is only paying lip service...".... "The ANZ Bank has committed Fraud against me and my family..." http://www.bfcsa.com.au/index.php/entry/bfcsa-asic-is-only-paying-lip-service-to-the-australian-peopleBelow is a snippet from the comment that has been posted. Robin Ruth Henderson - Posted on Thursday, December 12, 2013 At this stage I have just a suspicion that ANZ has committed me unfairly to a mortgage after reading an article online published in The Australian newspaper in May 2012...about a man who got a Lo Doc loan who was a deckhand and found he'd been described on the Loan Application Form for his Lo Doc Loan as a ship's captain on $150,000.00 per annum. He defaulted on his loan, went to court and was relieved of his mortgage.For anyone else's information ...the woman who wrote the article that made me suspicious of my own situation is: Denise Brailey who runs The Banking and...

  Reposted blog from Sunday, 28 October 2012 in Lawyers and Insurance Co's   Managing fraud in the Mortgage Market Spotlight Series - Issue 2 Genworth Financial (Mortgage Insurer)   http://www.genworth.com.au/downloads/4-2-3-Spotlight/spotlight-series-managing-fraud.pdf     Page 3 - "Furthermore, many within the industry may not realise that Lenders Mortgage Insurers are not licensed to cover losses suffered as a result of a fraud perpetrated by the lender or a third party acting on its behalf in the origination chain. As a result, the lender may seek to recover the losses from those who may be considered to be liable"     Comment Posted by portabello on Sunday, 28 October 2012 in Lawyers and Insurance Co's     I'm sure lenders will not want the fact that fraud has been committed by links in their chains to come out in court otherwise their insurance on the loan WILL NOT BE PAID!!     EDITOR:...

October 29, 2013   Maha Al Nasser got a little bit more than she bargained for on her shopping trip to the local mall. She may have had groceries on her mind when she set out that day, perhaps a few Christmas gifts too. By the time she got home however Ms Al Nasser had bought a $207,000 time-bomb – a home loan she could not afford.  It was to break up her marriage and bleed her dry financially.  Maha Al Nassar was signed up at the mall by scouts for the now defunct Adelaide mortgage broker, Power Loan.    On top of the $207,000 loan, she was also inveigled into making a $120,000 ‘property investment’ in the doomed Westpoint Financial group.  The idea was that the income from the Westpoint investment would meet the repayments on the loan. Little did she know that financial planners were being paid hefty upfront commissions to...

  Were you surprized when your mortgage was approved? Are you struggling today to keep up with your repayments, because you are not earning enough income?  In fact, you were probably not earning enough income from DAY ONE to afford the repayments.  If your bank was watching your back, as any responsible lender would be, you should never have been approved for this mortgage in the first place.  Am I right?  Have you been given top up loans, buffer money.. or a Line of credit, to help you meet your mortgage repayments?  Yes? Are you in a hardship arrangement right now?  What are you going to do when that period runs out?  Do you now owe more than your home is worth? Were you given a copy of your Loan Application Forms (LAF) at point of signing?  No?   You should have at least 11 and some had 20 or so pages. Do yourself a favour and ask your Lender...

From Macrobusiness  10/10/2013 At the AFR this morning there are two stories about the growth in high LVR lending. One from Robert Harley: Martin North, the principal of boutique research consultancy, Digital Finance Analytics, also notes that high LVRs can depress the economy. When interest rates inevitably rise, borrowers, geared to the maximum, stop discretionary spending. The result, as happened in Western Sydney last decade, can be years of stagnation. ...North, who has long followed the mortgage industry, has no doubt the banks have become more aggressive. The non-conforming lenders, like Liberty Financial, Pepper Home Loans and Bluestone Mortgages are back lending aggressively and the big banks are being forced to follow. Read the rest, about APRA and especially the comments! http://www.macrobusiness.com.au/2013/10/are-high-lvr-loans-shrinking-or-growing/...

Hi Members, What does it mean if the lender has admitted that they don't have a Loan Application Form (LAF) on file? It appears that our Lender cannot produce a LAF because they don't have one on file and they have admitted to it.  It looks like they used a statement of finanical position to assess our loan.  Which could not & should not consitute a LAF. I would think without a correct LAF then the loan can not be validated. Any comments appreciated.  Thanks. Gina....

 What is going on? A valuation 'expert' has spoken up, suggesting the changes to the industry may need to be even more far reaching: Why do some valuers get it so wrong?  by Patrick Bright, Thurs, 26 Sept 2013: I was speaking with a finance broker last week and he was telling me a story about one of his clients who purchased a property for $661,000. Ok, so there’s nothing unusual about that but here's where it gets interesting.The broker knew the area as he lived close by and thought that $661,000 was a lot for a two-bed apt in that location so it must be something special. As per standard practice the bank ordered a valuation which came in at $661,000 (purchase price). This surprised him as he was sure the val' was going to come in well below that figure. In sharing the story with a co-worker, they discovered that a...

By Vern Gowdie  Wednesday, 21st August 2013  Photo - homeless family ‘CBA’s record result delivers Narev $7.8m pay cheque’ said a headline in the Business section of The Australian yesterday. According to the article, the CEO’s salary package rose to $2.1m compared to last year. Nice work. Narev is not an isolated case; bankers around the world are reaping the benefits of stabilised markets courtesy of central banker intervention.  Don’t get me wrong; if someone genuinely delivers they should share in the spoils. But what irks me is the banking sector (globally) is a protected species. As we witnessed in the GFC, the financial sector is backstopped by taxpayer money. Success is theirs and failure is ours. Globally the financial sector has grown like topsy over the past two decades and remuneration has followed suit. But has this growth added any real value to the economy? Paul Volcker (Chairman of the...

Following the Money Wednesday, 21st August 2013 – Buderim, Queensland   By Nick Hubble The following are extracts from Nick Hubble's newsletter relating to Banking --"Australia’s corporate behemoths are publishing results left right and centre. It’s tough to know what to make of the deluge of information, and there’s a lot of shuffling going on. But a few clear trends are emerging...." --"It’s not just the mining industry that’s looking shaky. --Suncorp Group’s statutory net profit fell 32% after making a $632 million loss on the sale of its bad loans to Goldman Sachs. Why would a bank take a $600 million plus hit on loans in a healthy mortgage market? It wouldn’t. --Meanwhile, QBE upped its mortgage insurance premiums big time. The reason for the 9% increase is fear. The company is forecasting ‘volatility’ in the housing market in the next few years. And we know what can happen to financial...