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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: RBA housing line wears thin RBA says NOT concerned about Housing Downturn

Posted by on in ROYAL COMMISSION URGENT
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RBA housing line wears thin

The Australian 6:00pm March 6, 2019

James Kirby

 

A repeating message from the Reserve Bank of Australia that it is not concerned about the housing downturn is starting to wear thin.

The latest GDP figures for the three months to December 30 last year show that falling house prices and declining dwelling investment are a drag on the entire economy.

In fact, Governor Philip Lowe’s detailing of negative equity levels should be enough to tell anyone we should be concerned. Lowe says the nationwide negative equity level is less than 5 per cent or, in other words, nearly one in twenty households with mortgages are looking at their home loan being bigger than the value of their house.

The RBA interprets this number as being modest but we might just as easily point out that it was effectively zero for the last decade or so.

Putting what NAB describes as “relatively slow income growth” against a backdrop of falling house prices and tight credit levels could hardly prompt a conclusion other than house price declines — which were initially useful in cooling a frothy market — are now beginning to bite.

We already know the savings rate is seriously low at 2.5 per cent having drifted down from 10 per cent a decade ago and we know consumer spending is very poor from the retailers’ interim reporting season.

Even if we go with the RBA’s lack of public concern on the basis that the wider picture of economic expansion will not be threatened, the reality is that high iron ore and coal prices might tip GDP numbers in the right direction but it will not insulate Australia over the medium term.

The dismal sentiment in the housing market is perhaps most evident through what is not happening. We have historically low interest rates and the banks are telling the RBA they are not engineering a credit squeeze. So where are the bargain hunters?

We have an election due within two months and the ALP, a likely winner according to polls, is going to scrap both negative gearing on existing homes along with effectively raising the capital gains tax bills for property investors. Under these conditions we might reasonably expect property investors to swarm the market aiming to get the negative gearing up and going before the gates close but this is nowhere to be seen.

Sure, the RBA may well report that the banks are telling it loan application approval rates remain unchanged but that is not a signal that the market has returned to equilibrium, it might just as easily suggest that both home buyers and investors are petrified by the sudden downswing.

New evidence is rolling in from the outer suburbs that house approvals are regularly not been converted as lot buyers default or try to sell their land without going ahead and building anything on the site. Defaults are running between 8 per cent and 25 per cent in capital city housing estates. This is the front line of the housing market … who would not be concerned?

 

 

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