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BFCSA: The Banks begin to pay (reposted) Nick Hubble

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The Banks Begin to Pay

Posted by CHANGE on Monday, 14 January 2013 in Banksters and Lenders


Monday, 14th January 2013 Melbourne, Australia By Nick Hubble The Banks Begin to Pay

The last few weeks have seen a flurry of enormous payouts by the banks to wronged borrowers. The bill could finish around the $10 billion mark. Unfortunately, these were overseas borrowers and overseas banks. But the news is encouraging for Australians. Our banks used remarkably similar practices to the ones getting foreign banks into trouble. You’ll find the details of what’s been going on in Australia in the December monthly issue.     The recent stories in the US are an interesting appetizer to illustrate how these scandals can play out.

Under a recent agreement reached between 10 US banks and regulators, the banks will pay US$8.5 billion to settle claims of botched foreclosures. Oddly enough, the banks will be paying borrowers regardless of whether they were legally wronged or not. Instead, anyone in any stage of foreclosure in 2009-2010 will get a payout. That’s around 3.8 million borrowers.

The problem is, the settlement also ends case-by-case reviews of how borrowers were wronged. In other words, this is a cover up. No longer do the banks have to get independent consultants to clean out the skeletons in their closet. That’s disappointing, but at least the borrowers got something.

This is far from the only repercussion the banks face from their dodgy dealings. Last year saw substantial principal forgiveness for borrowers. Bank of America offered to knock off as much as $150,000 from the mortgages of 200,000 borrowers! Principal forgiveness is when the bank reduces how much you owe it.  This is the remedy Australian borrowers achieved via the courts. More recently, Bank of America settled with Fannie Mae over ‘soured loans’. The payout was a whopping US$11.6 billion. The best bit is, BofA will have to repurchase a huge amount of the questionable loans it sold.

The bizarre nature of what this scandal has exposed doesn’t end there. Many of BofA’s problems actually come from Countrywide Financial, the huge mortgage lender it bought.  Countrywide’s CEO gave evidence in one of the court cases concerning poor mortgage lending practices. It was revealed he didn’t know the difference between a mortgage applicant’s ‘verified income’ and ‘stated income’. That’s pretty much the same ignorance that Australian banks will have to plead when they realise their Loan Application Forms are not filled out correctly. They never verified the stated income. For his detailed knowledge and expertise in the mortgage industry, Countrywide’s CEO was paid $521.5 million between 2000 and 2008. The consequences of dodgy lending policies are being exposed in the US. The story has only just begun in Australia.

         A Money for Life Letter subscriber sent this email last week:

Just thought I'd let you know that after reading The Khoshaba Precedent I hot-footed it over to Denise's Banking and Finance Consumers Support Association site: only to find it had suffered a Denial-of-service attack.  

Hmmm nasty!  

I’m still hopeful this issue will catch on in the mainstream press like it did in the US. Then borrowers may be able to hold the banks accountable on a larger scale.  

Nick Hubble

Ed:  Nick you were a loan voice in the wilderness for some time.  You were the only one to recognize the quote in my evidence to parliament 8th August 2012: "Australian Government cannot, ought not to, profit from a fraud."  Main stream have ran a few stories but not enough investigations going on.  Big break through shortly.........involving "passwords."  Banks handed out the magic password on 40,000 occasions.  Ooops!  Big compo claims coming up.  

Last modified on Saturday, 25 January 2014 

·         Denise Brailey Tuesday, 15 January 2013

Banksters will be paying and paying for years to come. We have the final piece of the jigsaw. What dogs you Masters of the Universe really are. How could you do that to innocent citizens. Ordinary Aussies that placed their trust in a very dark place. I care not for which Political Party is in Power. I am a long time student of Politics and I just want you all to start playing with a straight bat! Cleaning up our Banking Industry should be a number one priority. Maybe we need Buses to Parliament again in February.
Understand this: Banks set up the Plan to submerge the nation in debt and make lots of lovely fees. They set up 40,000 brokers to take the rap for doing the dirtier tasks, but with brokers being unaware the system and prepared paper trail was illegal. The preying on the vulnerable was indeed a criminal act. Fraud abounded in every document. The Banksters knew that without the fraud as a specific component, the massive volume business and huge bonuses to feed the voracious appetite of the Banking Cartel could not materialize.

The Banksters set about a 14 years campaign to corrupt Government all the way to the Prime Minister's Office - the signs are all over the place. Everything is crystal clear: "let’s create a sub- prime lending racket, but we need to capture Government and it's dumb regulators first. The people will complain but all that will be taken care of. We can then refinance via DEBT RESCUE operations and roll the dice for another 20 years. Remember: we can prick the bubble of the property and housing market, any time we choose because we are in control and we are Masters of the when is my next $50 million bonus due? Wednesday? Good. I worked hard for that money!" 
How come Senator Williams is the only MP who can smell the stench? This email address is being protected from spambots. You need JavaScript enabled to view it.


·         Guest

Han rex Saturday, 25 January 2014 ·

So... If you lie to the banks about your income

And they don't check it and make a paperwork mistake 

Then they pay you. Great way to encourage individual responsibility. This BS attitude is retarding our nation.



·        Guest

arree Saturday, 25 January 2014 · Edit


han rex, that's the problem.  the vast majority of borrowers did not lie about their incomes... the problem is that the bank engineered this lending scam involving the use of a computer and using brokers as the fall guy... the banks own service calculator spat out the numbers to ensure our "incomes" made the deal fit. Greedy banksters gave the passwords and taught the brokers how to use this service calculator... HOWEVER, the banks gave the brokers a different version of this calculator.. brokers send in the application (taught not to show the borrower the calculations by the way) and then the credit assessors in house within the bank would tweak the numbers again. brokers do not give the loans, the banks do. banks taught brokers. go to broker news on line and you will read many comments from disgruntled brokers who speak about this.. one rule for them the other rule for the banks relating to the use of computer generated income figures..

And on top of all this, the borrower was not allowed to see this service calculator print out or many other loan application documents. 

Even now, complaining to FOS about the fudged figures we have discovered recently on our application forms (because it was the banks plan NOT to give all the documents to the borrower at point of signing) does not help us get to the bottom of it all. The banks tell FOS that these service calculator figures are "commercially sensitive" and not to be given to the borrower. One simple phone call by the bank credit assessor to us to verify the figures would have exposed the fudged figures in an instant and the loan would not have been approved... Why was there never that phone call?

The vast majority of borrowers did not lie about their incomes... you can read this on the number of blogs here, outlining peoples distress about all of this.. being set up by the banks. 

It was all to do primarily about asset lending... and so long as you owned a house and had a pulse you would get a loan.. your capacity to afford the repayments was not a consideration. Borrowers were not given ALL the documents that they were signing off on.. 

Since being alerted by Denise and BFCSA members, borrowers are slowly getting the picture of the workings of this scam.
and asking for their copies of their loan application forms, which should have been provided years ago. Problem is, as in our case as well, all our documents have been shredded our broker tell us last year, or other borrowers are being told by their bank that their documents are missing!! How convenient!

Those Borrowers lucky enough to get access to their LAF copies are shocked to see evidence of white out used, other peoples handwriting on the forms, with information added after signatures were obtained, some even have photo shopped signatures on the forms.. .. this is a very evil scam.... Denise estimates $57 billion dollars is involved. over 30% according to recent member surveys, were handled by the bank manager direct.. nothing to do with a broker at all.

you have not heard the last of this. the upcoming senate inquiry into asic's performance should make our heads spin in disbelief. .. In closing, it is not the borrower, it is inside the bank who are lying about our income and assets and liabilities.... we have the proof. unfortunately for many, we put our trust in the "experts"

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  • doyla66
    doyla66 Saturday, 25 January 2014

    Some regulators actually regulate ( no mention of brokers here)

    No American financial institution is too large to indict and no bank executive immune from criminal prosecution, Attorney General Eric Holder said in a television interview.

    In an interview with MSNBC scheduled to be broadcast on Friday, Holder cited the case against JPMorgan Chase, which in November agreed to a civil settlement under which it would pay $13 billion to end a series of government investigations into its marketing and sale of mortgage-backed securities.

    The settlement with JPMorgan, the largest U.S. bank, allowed prosecutors to pursue criminal charges if warranted, and that investigation is ongoing.

    "There are no institutions that are too big to indict," Holder said, according to an MSNBC transcript released before the interview.

    The Justice Department is investigating "significant financial institutions," Holder said without elaborating.

    "And the focus of those investigations is not only on the institutions but on individuals as well," he told MSNBC.

    (to bring civil mortgage fraud cases against several financial institutions early in 2014, using the JPMorgan case as a template.

  • doyla66
    doyla66 Saturday, 25 January 2014

    Amazing what you detect if you snoop into overseas sites for I for one have now wised up to what happens there happens here next and we have been playing follow the leader yet our media is so well gagged all they do is spin a load of b/s and so many of our own internet sites keep on going AWOL thanks to being blocked by we know who don't we? The US are too caught up in their own problems to give us any thought other than continue to issue orders to help further preserve their own skin and look what is going on and being hushed up in China! Heard on 2GB the other night the day the news broke an Aussie living and working there call in where a lot going on was revealed and the Chinese people are not very happy chappies either through being short changed. Yet ASIC still try and keep us dumbed down like babes in the woods and not yet quite figured out how very smart and knowledgeable we are and how collectively we are able to keep one step ahead of them although they are starting finally to notice I strongly suspect. Hope more of them are on telly this week for I just love watching them squirm as they evade the real issues for they are a dead give away all of them re trying to still cover up something most sinister they have all been involved in. Big cracks are now appearing in the wall foundations. Wonder who the 4 Humpty Dumpty eggheads might be when that wall comes crashing down!

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