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BFCSA: IOSCO Chief is Wrong! Securitisation in Australia has caused Sub Prime Catastrophe for Consumers of UNVERIFIED Mortgage Loans

Posted by on in Bankers A Law Unto Themselves
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What a thoroughly dishonest man is Meddlesome Medcraft, Chairman of ASIC and IOSCO.  This is just plain balderdash!  Mortgage Originators are under orders from Four Major Banks and the regulator is captured by the same TOO BIG TO FAIL FOURSOME.  Ask any victim of mortgage fraud.  The fraud and forgery is carried out INSIDE THE BANKS via the processing channel using a wicked serviceability calculator that is used for fudging figures and with a note: NO COPY TO BE GIVEN TO CUSTOMER............Go Figure!

Securitisation to fund real economy, says Medcraft


12 November 2014


IOSCO chairman Greg Medcraft has called on Australian banks and RMBS issuers to recognise the “integral role” that securitisation can play in financing the real economy.

Speaking at the Australian Securitisation 2014 annual conference in Sydney yesterday, Mr Medcraft said securitisation has funded the economy in the past, very successfully in Australia, and has the potential to do so again.

However, he added a caveat that this would only be possible if Australian RMBS, CMBS and ABS issuers can actually build sustainable securitisation markets.

“Building sustainable securitisation markets is actually something that has to be a joint project between the industry, issuers, investors, intermediaries, regulators and policymakers,” Mr Medcraft said.

“Clearly we cannot and should not do that on our own. We need to do that to make sure that we actually work with the industry to make sure they are the right settings so that we don’t have unintended consequences.”

In addition, Mr Medcraft stressed the significance of understanding the “real money investors”, as Australian securitisation markets have typically focussed on issuers.

“I have seen this over 25 years in the securitisation market; often the industry has been too issue driven and not investor driven,” he said.

“I think it is really important to understand what real money investors need and want if you are going to build sustainable securitisation markets.

“I think that is really important if securitisation is going to fund the real economy and in turn economic growth.”

Also speaking at yesterday’s event was the Reserve Bank’s head of domestic markets Chris Aylmer, who observed that, in comparison with its overseas counterparts, the Australian securitisation market – which remains predominantly an RMBS market – has experienced a strong recovery over the past couple of years, albeit not to pre-GFC levels.

“Issuance started to pick up in late 2012, reached a post-crisis high in 2013, and has remained high since then,” Mr Aylmer said.

“This mainly reflects the strong performance of Australian residential mortgages and the high quality of the collateral pools which are primarily fully documented prime mortgages,” he said.

While the major banks have been the primary issuers of RMBS this year, Mr Aylmer noted that mortgage originators have also been active, predominantly in prime mortgage bonds.

“Mortgage originators have issued only $1.6 billion of non-conforming RMBS in five transactions so far this year,” he said, noting that the number of mortgage originators active in the market in the past two years has increased relative to the period from 2009 to 2012.

“They are an important presence in the market.  “In the period preceding the global financial crisis, mortgage originators took advantage of innovations in the packaging and pricing of risk.

“In doing so, they were able to undercut bank mortgage rates. The banks responded and spreads on mortgages declined markedly.


“While a number of large mortgage originators have exited the market, the presence of mortgage originators promotes competition in the mortgage market,” Mr Aylmer said.

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  • Susan
    Susan Tuesday, 18 November 2014

    MORE Securitisation??

    MORE securitisation?
    How can Securitisation fund the 'real economy' when the money that is supposedly generated through the securitisation industry is mainly just hot air and bubbles with nothing of substance backing it?
    How do you make hot air and bubbles 'sustainable'?
    The more securitisation that takes place, the bigger the difference between the real value of our economy compared to the paper value - and thus the bigger the fall in the event of a collapse.
    How can one mortgage have multiple securities created from it - even dozens - and each security created from this one mortgage be backed by that one mortgage? (One expert told me of one man’s mortgage that had thirty securities created from it, and another mortgage that had about 40 securities created from it.)
    Every security derived from the one mortgage is claimed to be 'Mortgage Backed'. Yet, each security is sold for 80%++ of the original loan/mortgage value.
    How can each of the possibly dozens of securities derived from that one mortgage all be 'backed' by that one mortgage when each security is sold for such a high percentage of the value of the mortgage?
    I mean, they are called 'Mortgage Backed' Securities, aren't they?
    They aren’t ‘backed’ by the Mortgage. They can't be. That's just the spiel. There's nothing backing them, but the insurance that is put in place to protect the bank and/or the Securitisation Trust - certainly nothing is 'backing' the securities to protect the purchaser, which is the impression the name 'Mortgage Backed' gives.
    We got along just fine without a Securitisation Industry helping to create huge bubbles of nothing and claiming it was somehow benefiting the 'real economy'. It's those kind of bubbles that can lead to the collapse of the real economy - which is where the real value lies. And it's those kind of bubbles that can lead to the workers, and the Mums and Dads of this nation suffering.
    Not to mention the associated greed by banks which takes advantage of every ARIP they can get their grimy hands on so they can enjoy more securitisation profits AND take more people's properties. Remember, they make more money out of defaults than by someone paying off their loan over the allotted life of the loan. (Sounds like a conflict of interest issue here.)
    Greggy has already proven he doesn't care about the people.
    Now it seems he must also have a short memory. What was a major factor that helped precipitate the GFC?
    Hot air and bubbles cannot be 'sustained', and difficult as it seems for some people to comprehend, Bubbles Always Burst.

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