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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; Banks warned over lending standards

Posted by on in Political Blindness
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Date September 11, 2013

Clancy Yeates Banking reporter

 

The financial regulator has warned the nation's banks not to let lending standards slip in an environment of cheap credit, saying borrowers must be prepared for higher interest rates.

As the $1.2 trillion mortgage market heats up, an official audit of lending standards by banks and other lenders has highlighted areas where the sector could lift its game.

The warning by the Australian Prudential Regulation Authority came amid signs the housing market is starting to move ahead with prices posting their strongest quarterly gain since the end of the 2010 boom.

The national dwelling value rose 4per cent in the three months to August, the highest rate of capital gain since April 2010, right before the last boom began to fizzle, according RP Data-Rismark figures released this month. Sydney dwelling values shot up 5.4 per cent over the quarter and values in Melbourne rose 4.8 per cent.

Economists are still tipping the Reserve Bank may cut official cash rates as early as November to help spur growth through the economy as mining investment slows.

An audit of the nation's banks by APRA concluded lenders had policies in place to make sure borrowers could service their debts, but it also identified areas where banks could improve their internal processes when approving home loans.

The audit, conducted this year, assessed the debt-servicing policies used by 27 banks and other authorised deposit-taking institutions in home lending.

Some of the key areas for improvement were: banks should look more closely at borrowers' other debts; some assessments of borrowers' living expenses were too simplistic; and, in a minority of cases, some mortgage documentation was incomplete or inaccurate.

The regulator's report said it was ''critical'' for banks to maintain a strong focus on making sure borrowers could service their debts when interest rates rose. ''Low interest rates can mask debt serviceability assessments, creating opportunities for borrowers to increase their leverage,'' it said.

It said banks and other deposit-based lenders needed to carefully monitor the debt-servicing capacity of their borrowers ''over the duration of housing loans, not just at origination to ensure that borrowers are able to manage the transition to higher interest rates, when that inevitably occurs''.

A separate article from APRA said there had been an increase in the number of higher-risk loans of 90 per cent or more of the property's value, a trend the regulator was monitoring closely.

Last month New Zealand's central bank moved to rein in a hot housing market there, imposing its limits on low-deposit-high-value house loans. Regulators often view restrictions on the amount of high loan-to-value ratio lending as an effective macro-prudential tool in controlling the housing market.

Commonwealth Bank chief executive Ian Narev recently said he did not lie awake at night worrying about how Australia's property market might respond to record-low interest rates.

Mr Narev said he had total confidence in Reserve Bank governor Glenn Stevens and the board to make a judgment on the property market.

Read more:
 http://www.smh.com.au/business/banks-warned-over-lending-standards-20130910-2ti9v.html#ixzz2eYZxzMLz

 

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  • doyla66
    doyla66 Sunday, 15 September 2013

    I may be cynical but do APRA really think the Lenders will take any notice of their warnings. Lenders have been getting away with their fraudulent tactics under the guise of acting in "GOOD FAITH" for to many years. The courts aid the lenders and do not recognise the facts presented. The lawyers are smug in the fact that they do not have to work to hard to accomplish the banks dirty work, although I believe in the legal world these scummy lawyers are regarded as just that. APRA bury their heads in the sand if they think they have any control over these dinosaurs of the financial world. Unfortunately for the every day Mums and Dads the system reeks of greed, fraud and deception cartal style.

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