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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: Investor home lending falls to lowest level in nine years in July

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Investor home lending falls to lowest level in nine years in July

Australian Financial Review Sep 7 2018 4:11 PM

Michael Bleby

 

Investor home lending fell to its lowest level in nine years in July as banks tightened housing credit for investors, spurred by the banking royal commission and regulator APRA.

While July was the month from which APRA ended its cap on investor loan growth,new mortgage commitments for investor borrowers fell 1.3 per cent from June to $10.2 billion, accounting for 32.6 per cent of all new loan commitments - the weakest level since August 2009 - official figures on Friday showed.

"The underperformance in investor relative to owner-occupier lending is consistent with what we would expect in response to a tightening in lending standards, the consequence of both the Banking Royal Commission, and macroprudential policies," JP Morgan economist Henry St John said.

NAB director of economics David de Garis said the credit decisions made in July were likely the consequences of applications made in prior months and it would take time for the effect of the APRA easing to flow through to lending data.

"Would we expect the whole credit approval process to be changed overnight?" Mr De Garis said. "That's unlikely. It's not like we're going to go from restraint to full-blown expansion."

But even with that easing there will be other restrictions.

APRA boss Wayne Byres said in July it was not surprising that credit growth was slowing in an environment of softening house prices and rising interest rates. While the 'heavy lifting' on improving credit standards had been done, new restrictions would come - albeit at the margins - as banks scrutinised applicants' pre-existing debts more closely, to assess their debt serviceability capability, Mr Byres said in a speech.

"It may take some time for controls on total debt-to-income to be fine-tuned and properly calibrated," he said.

Friday's figures showed the fifth straight monthly decline in new home loans was offset by a 1.3 per cent monthly rise in loans to owner-occupier borrowers - which lifted that category total to $21.2 billion - to leave total home lending up 0.4 per cent for the month.

However, the boost to owner-occupier loans came from refinancing activity and excluding this, new loan commitments made slipped 0.5 per cent to $14.8 billion, in seasonally adjusted terms.

The outlook for lending was likely to worsen with news this week that ANZ and Commonwealth Bank had followed Westpac in raising borrowing costs for standard variable home loans, Mr St John said.

"The last week has seen 3 of the 4 major Australian banks reprice standard variable mortgage rates about 15 basis points," he said. "In our view, mortgage rate tightening is a greater headwind for credit than the aforementioned tightening in lending standards, and we expect to see early signs of a slowing in lending and refinancing behaviour in the coming months."

While the finance data lags the latest housing price figures, the link between credit and housing prices was made clear by the CoreLogic figures this week that showed housing values in investor-heavy Sydney also fell at their fastest rate in nine years.

Friday's figures also showed loans to first-home buyers have peaked, a year after NSW and Victoria introduced stamp-duty cuts for first-time buyers.

The number of new first home buyer loan commitments fell for a second month in July to 9612 from 9556. They were 10,303 in May.

The proportion of loans to first home buyers ticked down to 18 per cent from 18.1 per cent.

In what could be a good news from an affordability perspective, the Australian Bureau of Statistics figures also showed that the average size of a first home buyer loan ticked down to $345,800 in July from $349,800 in June.

A report this week by the Real Estate Institute of Australia and Adelaide Bank showed that housing affordability worsened in every state and territory in the June quarter as first home buyers found themselves borrowing larger sums to purchase new dwellings.

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