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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: Macquarie at it again - teaching Broker Channel to sell Reverse Mortgages to ARIPs (Pensioners)

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Mackers just loves targeting Asset Rich but (very) Income Poor ("ARIPs") because its lucrative business for them and shareholders BUT its amoral and fraught with RISK OF LOSING HOME in 7 short years.  Low Docs guaranteed to lose your own home in 5 years.  The Bank Sharks are back.  

THE ugly side of risks to reverse mortgages – interest rates are higher than average and debt can quickly rise.  Ask BFCSA Members what they think

Reverse mortgages back in vogue

    Australian Broker News
by Calida Smylie | 14 Mar 2014
The move by two major funders to offer reverse mortgages again is an indicator the market is picking up since the global financial crisis, the general manager of a mortgage servicing company said.

“When reverse mortgages coming back that’s when I know the market’s coming back. Because funders willing to fund reverse mortgages means the cost of funding is coming down and they are happy to take a more long-term view of the market,” said Chris Evans, business development and relationships general manager at First Mortgage Services (FMS).

This week, Macquarie Bank announced it is targeting retirees again by releasing a reverse mortgage and an accommodation bond loan. Both products have a maximum LVR of 45% and are available to customers over 70 years old.

And New Zealand lender Heartland Bank announced a deal last month to buy the Australian Seniors Finance business and Sentinel in New Zealand for NZ$87 million from the Quadrant Private Equity-controlled Seniors Money International. The bank said its decision to invest in reverse mortgage business is consistent with its strategy of pursuing niche lending opportunities.

Australian Seniors Finance is the biggest non-bank reverse-mortgage provider in Australia, with around 20% of the market. Sentinel is the biggest provider of reverse mortgages in New Zealand, with a market share of around 80%.

The deal is to be settled on 1 April.

FMS does the mortgage processing for Sentinel and Macquarie. Evans said having new players to the market is a good sign.

“You know funders are okay with the market when they start funding reverse mortgages again.”
A reverse mortgage is useful for cash-poor asset-rich retirees who want extra cash flow or fund an accommodation bond, he said.

While there are some risks to reverse mortgages – interest rates are higher than average and debt can quickly rise – Evans thinks because lenders are not advancing the full value of the home (usually just up to 30% to 45 % of LVR) the risk is lessened.

Evans said one of the main objectors to reverse mortgages is the borrower’s children.

“Children who think they’re going to get a large inheritance often dispute the reverse mortgage because they think it’s taking away from their inheritance. I don’t really agree with that – I think it’s [the borrower’s] house, they should enjoy it.”

He pressed his own parents to take out a reverse mortgage pre-GFC.

“I said ‘don’t spend your money on me, go out, go travelling, and have a good time’. I don’t want any of their money. When I get to that age I wouldn’t mind taking one out too.”

But many lenders, such as Acuity Funding, do not offer reverse mortgages because of the risk involved.

Acuity managing director Ranjit Thambyrajah said his company refuses to get involved with reverse mortgages because vulnerable elderly can be taken advantage of by people pressing them to get a reverse mortgage on their home so they can get cash for themselves.

Acuity Funding has made it a policy not to be involved in reverse mortgages for the specific reason that this facility is often used to assist others and not the borrower,” he said.

He said on many occasions a client has come to Acuity to try and rescue their parents’ home after this has happened, but the damage is already done.

When announcing its reverse mortgage option,Macquarie said customers would be protected from owing more than their home was worth through a no-negative-equity guarantee. All reverse mortgage and accommodation bond borrowers will have to provide evidence of financial and legal advice before a loan can be granted.

Professional services firm Deloitte released a report last September concluding the reverse mortgage market is not living up to its full potential and risks becoming a missed opportunity.

Currently there are less than five active lenders offering the product – having reduced from more than 15 before the GFC.

But Deloitte partner James Hickey said the financial services industry is seeing significant interest in the product from ‘active’ retirees aged in their 60s and early 70s.

“These are senior Australians who want to travel and renovate their homes, as well as settle their debts and enjoy their new found freedom without having to significantly tap into their superannuation, or downsize their homes.”

$3.5 billion reverse mortgage market a 'wasted opportunity'
  Reverse mortgages 'just not good business', argues broker
 FOS 'lacks timeliness': Independent review 


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  • Denise
    Denise Saturday, 15 March 2014

    I hope Macquarie is telling their shareholders they are profiting from fraudulent high risk products. [email protected]

  • Denise
    Denise Saturday, 15 March 2014

    Good One Mackers. You Bad Boys must be getting desperate. Vulnerable Senior Citizens targeted to release equity in the homes and give $$$$ to their family. They do not get benefit BUT interest gathers and seven years later KABOOM old lady out in the street because 45% loan plus 7 years HIGH interest means its all eaten up and the Oldies are forced to more equity and no rescue from Mackers. They will move in for the kill and are experts at doing so. Just ask Gadens!!!!! [email protected]

  • doyla66
    doyla66 Saturday, 15 March 2014

    Disgusting and Disgraceful - Negligence by Regulators

    Here we go again!
    Brokers door knocking their way to bonuses and overseas trips on the backs of the vulnerable ARIPs!
    Please everyone, warn every senior citizen you know to shut the door and refuse to sign ANYTHING without a trusted friend and a damn good consumer law expert at their side!
    Been there and seen the carnage it caused.

  • doyla66
    doyla66 Saturday, 15 March 2014

    disgraceful.. ad CBA is all over it!!
    It was only in 2012 that Sentinel had no money, until CBA came to the rescue....... In 2012 "Under its banking agreements, Sentinel is "technically insolvent" as it has now slipped into negative equity, but managing director Vaughan Underwood said the restructuring had stabilised Sentinel, and the company was actively seeking debt funding so it could start making new loans..."

    'With the $1.23 billion CBA loan secure until 2019.'.. - © Fairfax NZ News

    "The CBA facility will fund growth in Australia as Sentinel home equity release loans are migrated to Heartland Bank."
    Its intention, Heartland says, is to confine its activities to New Zealand with its Australian business held outside Heartland Bank and funded exclusively by CBA."

  • Denise
    Denise Sunday, 16 March 2014

    Dumb Brokers do not understand the product!!!! They sell them to their own parents! I know. Banks sell product to its agent brokers like this: "WE want you to go out there and help people release their dreams and do this this and that." Its a dodgy sales speil engineered by CRAFTY GREED DRIVEN EVIL BANKERS. Wake up Australia. Only 3% of Brokers are intentionally amoral. Industry says that and we AGREE. So 97% of banker agents THINK they are doing a wonderful job selling safe no risk products because they fall for the Banker's Lies. Brokers have no way of knowing the RISKs, same as YOU all fell for the same cartel lies. Start a campaign to adopt a friendless broker and understand they purchased the product too and are now suffering what you are suffering. How do I know? I am compassionate and speak to them. I refuse to talk to crooks!!!!! [email protected]

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