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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: Westpac crackdown on lending standards the $1.6 trillion home loan sector

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Westpac crackdown on lending standards

The Australian 12:00am April 12, 2018

Michael Roddan


Westpac has launched a crackdown on declining lending standards in the $1.6 trillion home loan sector, and will start grilling customers on their spending habits for everything from pet insurance to Netflix subscriptions.

From mid-April, the second-largest bank in Australia will ask brokers to collect more detailed information on borrower expenses, including media streaming service costs and gym membership fees.

The move comes as the banking royal commission zeroes in on irresponsible lending and mortgage fraud, and as the banking regulator pushes the sector to be more meticulous when it combs through borrower information.

Westpac sent out a note to brokers and branch staff informing them that the number of expense categories customers would have to fill out and verify is to more than double.

Borrowers will be quizzed on their gambling, alcohol and tobacco consumption, and telephone use.

“Westpac is committed to responsible lending and ensuring that we have a clear understanding of our customers’ financial situations,” a Westpac spokeswoman said. “We are updating Westpac Group credit policies to enhance the way we capture customer living expenses, commitments and verify documentation. We recognise sometimes it can be difficult for customers to provide a complete picture of their expenses.”

The Australian Prudential Regulation Authority has found banks were far too reliant on living expense benchmarks, which in reality could undershoot living costs.

APRA recently revealed 100 per cent of loans sold to borrowers with low incomes used living expense benchmarks, while about 80 per cent of loans to borrowers on incomes above $100,000 used benchmarks such as the University of Melbourne’s Household Expenditure Measure, which APRA criticised for being too simplistic.

Westpac will now use higher benchmarks to assess borrowers’ capacity to pay.

Investment bank UBS estimated there were about $500 billion worth of “liar loans” sitting on books of Australia’s banks, sold to customers who falsified information in order to meet lending criteria.

Kenneth Hayne’s royal commission into the finance sector has already revealed widespread home loan fraud among Australia’s biggest banks and mortgage brokers.

Westpac previously told mortgage brokers it would unleash three global credit agencies to audit borrower credit information as regulators ramp up scrutiny over the lending behaviour of the banking sector. Westpac said it would be “enhancing credit assessments” with agencies Equifax, Experian and Illion to be supplied with all consumer credit customer data from April.

The royal commission has revealed about 15 per cent of National Australia Bank home loans do not comply with all the standards set out in its lending policy.


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