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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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BFCSA: APRA set the Rules and Regs of Banking then ignored the systemic activities

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Thanks Simba:  Your comment deserves a BLOG.  Thanks for your contribution.   This email address is being protected from spambots. You need JavaScript enabled to view it.

APRA the Regulator  says......

Recent court decisions relating to residential mortgage lending emphasize that residential

mortgage lenders must assess the ability of the loan applicant to repay the loan and must not

be concerned solely with whether the value of the security property is adequate to repay the

debt. The decisions also indicate that lenders should not entirely accept the information

provided by loan applicants at face value, especially if other information or common sense

suggests otherwise.

Ed: We kept telling Dumb ASIC this.  The valuations are irrelevant.  S 25.1 of the Bankers Code has been breached on more than 100,000 mortgages according to our follows that....etc.

It is APRA’s view that attention by ADIs (Austn Deposit-taking Institutions) to the requirements in the prudential standards to have

prudent lending practices, including effective assessment of a loan applicant’s debt repayment

capacity, and to follow these practices is likely to reduce the risk of loan contracts or

mortgages being unenforceable.

If an ADI relies on a third party (such as a mortgage broker or introducer) to obtain, verify or

validate loan application information, APRA expects the ADI at a minimum to confirm that the

third party has undertaken those tasks in accordance with the lender’s guidelines. Preferably,

the lender should assess the accuracy of loan application information independently of third

parties.  ED:  Yes folks Judges have ruled that as mandatory.  ASIC, FOS and COSL are not taking the lead of the Courts!"


As AGN 112.1 makes clear, mere collateralisation of the mortgage loan by residential security

without appropriate assessment of the repayment capacity of the borrower is not considered by

APRA to be sufficient risk management practice for an ADI.

Ed:  Remember 36% of all loans we surveyed were arranged by Bankers - no Broker 's involved and all TOXIC

APRA’s approach to broker-originated loans.

We have never said that ADIs cannot use third party loan originators. Rather, we insist that, where this is

done ADIs must ensure that the originator applies the ADIs’ own credit assessment

standards.  Moreover, the ADI must monitor and audit loans being originated via a

broker to ensure on-going compliance with its lending criteria.

Prudent best practice for ADIs is also to include a risk-based component in the fees it pays for

broker-originated loans.

ED:   Hmmm so Lenders ignored that, no client file audits that they will share with public, and lowered their lending standards, ignored their own lending policy guidelines and rubber stamped approval of loans - no verification.  We have the collective evidence.

APRA  Regulation Impact Statement (RIS) September 2004

In the past two years, non-ADI lenders have begun to offer loans written with considerably less than the normally required documentation and checking of borrowers’ income and serviceability. These loans are usually referred to as "Low Doc" loans. As this market has expanded, ADIs have responded by offering similar loan products. 

Ed: actually these lower standard loans started in roughly 1994 but regulators were slow to catch on becuase they were not asking the right questions of the Banks and Banks (ADI's) became Too Big to Fail.

Lenders view the Low Doc product as an opportunity to fill a perceived gap in their product range that would be attractive to self-employed and other borrowers who are unable or unwilling to fulfill the normal income verification procedures required under conventional lending practices with residential property as security. 

The latter usually involves ADIs obtaining income information (such as salary slips and tax return information).  In the case of Low Doc loans, however, borrowers are only required to self-declare their income levels and/or servicing ability and the lender does not seek to verify the information.

There has also been an increasing tendency for ADIs to offer loans originated via mortgage brokers and other third party channels. In some cases, ADIs are accepting the serviceability assessments carried out by those referring the borrowers to them (without independently verifying the borrowers’ information themselves), and are placing greater focus on the security underlying the loan rather than the ability of the borrower to repay the loan. 

ED:  BFCSA discovered the service calculator fraud engineered by the Banks in 2011.  We then discovered ASIC had known a "computer program" was rubber stamping approvals since 2001 and perhaps earlier.

Both Low Doc loans and broker-originated loans can lead to problems associated with asymmetric information, where one side of the market (potential borrowers) knows something that the other side (ADIs) does not. Asymmetric information often leads to opportunistic or exploitative behaviour by the informed party and market failure.

Ed: Market Failure a given....................

In order to avoid these problems, APRA expects ADIs themselves to be responsible for deciding the criteria to be used in making the decision to lend in all circumstances, and should not rely on broker valuations or income checking when providing a home loan.

Ed:  Soft APRA approach "should not."  Bollocks!  APRA knows its happening in 2004 and knew the regulations (LAW) had been put in place for no loans to be approved that were unaffordable from INCOME.  S 25.1 of the Australian Bankers Code which was a powerful regulation, but left to collect dust on the regulators' shelves to the detriment of consumers.  They left consumers exposed to predatory lending by Bankers.

Furthermore, any use of a third party in the lending process should not adversely impact upon compliance with the ADI’s lending criteria. APRA is of the view that any use of a third party in the credit decision should only be allowed where the ADI’s credit assessment requirements are clearly specified and the relationship is managed in accordance with ADI Prudential Standard APS 231 – Outsourcing.

APRA APS 231 – Outsourcing.

7. Outsourcing involves an ADI entering into an agreement with another party (including a related body corporate) to perform, on a continuing basis, a business activity which currently is, or could be, undertaken by the ADI itself. 

10. A material business activity is one that has the potential, if disrupted, to have a significant impact on the ADI’s business operations or its ability to manage risks effectively, having regard to such factors as: 

(a) the financial and operational impact and impact on reputation of a failure of the service provider to perform over a given period of time; 

(d) the ability of the ADI to meet regulatory requirements if there are problems with the service provider; 

(e) potential losses to the ADI’s customers and other affected parties in the event of a service provider failure; and 

(f) affiliation or other relationship between the ADI and the service provider. 

13. Although outsourcing may result in day-to-day managerial responsibility for a business activity moving to the service provider, the ADI remains responsible for complying with all prudential requirements that relate to the outsourced business activity. 

15. The ADI’s risk management framework must deal with the risks associated with the outsourcing of a material business activity. APRA nevertheless expects that an ADI’s risk management framework will cover the risks associated with outsourcing a material business activity.

17. An ADI must be able to demonstrate that, in assessing the options for outsourcing a material business activity to a third party, it has: 

(a) prepared a business case for outsourcing the material business activity; 

(b) undertaken a tender or other selection process for service providers; 

(c) undertaken a due diligence review of the chosen service provider; 

(d) involved the Board, or Board committee or senior manager with delegated authority from the Board in approving the agreement; 

(e) considered all the matters outlined in paragraph 20, that must, at a minimum, be included in the outsourcing agreement itself; 

(f) established procedures for monitoring performance under the outsourcing agreement on a continuing basis; 

18. An ADI must be able to demonstrate that, in assessing the options for outsourcing to related bodies corporate, it has considered: 

(a) the changes to the risk profile of the business activity that arise from outsourcing the activity to a related body corporate and how this changed risk profile is addressed within the ADI’s risk management framework;  

(c) the required monitoring procedures to ensure that the related body corporate is performing effectively and how potential inadequate performance would be addressed;  

19. Except where otherwise provided, all outsourcing arrangements must be evidenced by a written, legally binding agreement. The agreement must be executed before the outsourcing arrangement commences. 

20. At a minimum, the agreement  must address the following matters: 

(a) the scope of the arrangement and services to be supplied; 

(b) commencement and end dates; 

(c) review provisions; 

(d) pricing and fee structure;

(e) service levels and performance requirements; 

(f) audit and monitoring procedures; 

(g) business continuity management; 

(h) confidentiality, privacy and security of information;

24. An outsourcing agreement must include a clause that allows APRA access to documentation related to the outsourcing arrangement. In the normal course, APRA will seek to obtain whatever information it requires from the ADI; however, the outsourcing agreement must include the right for APRA to conduct on-site visits to the service provider if APRA considers this necessary in its role as prudential supervisor. APRA expects service providers to cooperate with APRA’s requests for information and assistance. If APRA intends to undertake an on-site visit to a service provider, it will normally inform the ADI of its intention to do so. 

ED:  Judges read the agreements and found Argument of Agency was proven...."  FOS and ASIC and COSL say they do not agree with Judiciary.......but refuse to take more cases to court AGAINST THE BANKERS

Notification requirement 

27. An ADI must notify APRA as soon as possible after entering into an agreement to outsource a material business activity to a service provider and in any event no later than 20 business days after execution of the agreement between the ADI and the service provider. This notification requirement applies to all outsourcing of material business activities. 

28. When an ADI notifies APRA of a new outsourcing agreement, it must also provide a summary to APRA of the key risks involved in the outsourcing arrangement and the risk mitigation strategies put in place to address these risks. APRA may request additional material where it considers it necessary in order to assess the impact of the outsourcing arrangement on the ADI’s risk profile.

Thanks Simba we need all the help we can get in researching.  I read all this a while back, and the Judges decisions using these arguments, but some days I feel like The Loan Ranger.   This email address is being protected from spambots. You need JavaScript enabled to view it.


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  • doyla66
    doyla66 Thursday, 13 February 2014

    It amazes me that both sides of politics as well as ASIC, FOS and COSL are stacked to the rafters with people with law degree's and yet something as simple as APRA's plain language rules and regulations can't be followed, even a simpleton like me can fathom what APRA is stating. If only the high court would step in and say you must follow the letter of the law and not the bankster amended rules that ASIC and the EDR's follow.

  • doyla66
    doyla66 Thursday, 13 February 2014


    Forgive my dumbness again
    How many people do we need for a class action? Against the big 4? For maladministration..... Or are we a group way beyond that and right out of our league.
    This is new world for me.
    A world I wish didn't have to be part of.

  • doyla66
    doyla66 Thursday, 13 February 2014

    Should this not read the Official Wankster Dictionary?

  • doyla66
    doyla66 Thursday, 13 February 2014


    It's good to laugh
    My husband has made me laugh all day cause he can see what this is doing to me.
    Just gotta keep going,
    It shouldn't have to be a fight, but it bloody well is.
    Who gave those banksters wankers the right to do this to us.
    Simple solution really.
    Compensate every TOXIC loan with your billion dollar profits or your 8 million dollar salaries!!!!!
    JP Morgan have 2
    Why such a drama to get to that point.

  • doyla66
    doyla66 Thursday, 13 February 2014

    It has nothing to do with procedures being followed

    Only when a premeditated plot to deceive is used can you ever attempt to get around well written laws. So Neil as you say you are amazed that politicians and regulators can't see what appears to be written in concise plain easy to understand English. You are right on the money, we can all see it "true". Unfortunately our Banksters also saw small loopholes that they could manipulate and use to advantage to produce toxic products designed to target asset rich people with minimal income. Now when it finally all comes out into the open see how hard it will be for Banksters to explain that it was just a mistake a slip of the pen or a typo. Only a solid well laid plot involving Banksters and their Lawyers could ever mastermind a plot to deceive the world the way our banks have, alas there is always someone smarter, well done Denise.

  • doyla66
    doyla66 Thursday, 13 February 2014

    Gfs hopefully the Senate. hearings next week will be the start of better things to come.

  • doyla66
    doyla66 Thursday, 13 February 2014


    I hope so NT.... I pray every day & every night as it is the last thing i think of before I close my eyes.
    I really hope so.
    I dream about this turmoil coming to an end.
    we all just want to move on & be happy with our families.
    we have suffered enough, you guys have suffered for 7 years or longer.
    there must be compensation..... from the billions of profit these banks make.
    my head spins at the thought of how they will fix this country & I worry for my children.
    I hate to imagine the amount of lives lost because of the banksters.
    they really do have blood on their hands.
    may next week and coming months bring much happiness to people lives.
    thank god for DB & BFCSA..... how do we ever THANK her for what she has bought to our attention.
    she really is our very own ERIN BROCKOVICH
    may justice be served to all those affected by the mess created by the greedy naughty banks!!!!

  • Denise
    Denise Thursday, 13 February 2014

    Premeditated Plot by Evil Bankers - spot on POLLY! These were no loopholes in law but blatant devious ways to break the myriad of laws and get away with it - hiding the bodies as they [email protected]

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