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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's head of financial stability, Luci Ellis, sees no concerns re mortgage loans. Really????

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RBA's Luci Ellis has 'no concerns' with apartment settlements

Australian Financial Review Mar 18 2016 4:55 PM

Su-Lin Tan

 

The Reserve Bank of Australia says it it not detecting any signs of settlement problems despite industry fears of an apartment glut as a flood of new properties hit the market.

The low risk of settlements failure in the face of falling housing values as well as the high level of mortgage offset account savings keep housing conditions stable, the RBA's head of financial stability, Luci Ellis, said during Macquarie University's Financial Risk Day in Sydney. 

"The Australian offset account is the most tax-effective form of precautionary saving I have ever seen. Not everyone with a mortgage is ahead of schedule, but many are, and those offset balances are growing rapidly. That makes those borrowers more resilient to shocks and the whole system safer," she said. 

The property industry is becoming increasingly concerned that many buyers will not be able to pay for the purchases which stems from banks cutting back on their loan value ratios and taking a more conservative approach to valuing completed apartments. 

But there are many indicators the market is still resilient, Ms Ellis said. 

"We are watching but there are no concerns - we haven't seen any settlement risks [issues] yet," Ms Ellis responded.

Despite the high levels of debt in the market, as purchases of homes boomed in the last three years, household income to debt ratios remained healthy and lower than the 1990s, when the last recession occurred. 

"For sure, low interest rates are making people borrow more...but it is not true that it is sky rocketing like the 1990s," Ms Ellis said. 

Ms Ellis is also confident the RBA's financial stability controls are enough to ensure there is no "bubble" or oversupply of dwellings. 

"One of the FSA's role is to be ahead of the curve and manage the oversupply of apartments in certain markets. It is our job to start warning early," she said. 

"Is there a bubble now? It is a waste of breath...it is duelling tool for economists."

Likewise there is no evidence that the removal or adjustment of negative gearing will change demand for housing. 

"If there are tax changes, they will change the mix of funding...[but] it is not obvious it will change the demand for property."

APRA also see little issues with settlement risks after stress-testing the health of bank loans.

"We see losses of 3-4 per cent and that can be absorbed by the banks. That gives us confidence but does not gives us complacency," APRA's Heidi Richards said. 

APRA said in its investigations into deposit taking institutions found many were factoring in the financial benefits of negative gearing in their mortgage issues. 

"We are seeing some banks increase loans due to these benefits...but many changes have been implemented in ADIs after APRA introduced them," Ms Richards said. 

 

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