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BFCSA
MORTGAGE
DISTRESS SOS

What BFCSA Does...

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 Blog

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

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Recent blog posts
“Severe Collapse” of Home Prices Might Trigger a “Financial-Institution Crisis” in Australia: OECD Frets about the Banks Wolf StreetDec 10, 2018 Wolf Richter   “The authorities should prepare contingency plans.” The big four banks are too exposed to mortgages. Even if the banks don’t topple, the economy will get hit hard. In its latest report on Australia, the OECD focuses to a disturbing extend on housing, household debt, what the current housing downturn might do to the otherwise healthy economy, and what the risks are that this housing downturn will lead to a financial crisis for the big four Australian banks, an eventuality that it says “authorities” should make “contingency plans” for. The big four banks are huge in relation to the Australian stock market and the overall economy: Their combined market capitalization, at A$341 billion, even after today’s sell-off following the OECD report – accounts for 26% of Australia’s total...
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IOOF shocked by APRA move on Chris Kelaher and George Venardos, vows to reset relationship Australian Financial Review 10 Dec 2018 11:00 PM James Frost, Misa Han   IOOF's acting chairman Allan Griffiths says the diversified financial services giant was shocked by APRA's move to disqualify its chief executive Chris Kelaher and chairman George Venardos from acting as superannuation guardians and has vowed to reset the relationship with the regulator. On Monday morning Mr Kelaher and Mr Venardos were stood aside on full pay with non-executive director Mr Griffiths announced as acting chairman and general manager of wealth management Renato Mota elevated to acting CEO. "Up until Thursday of last week we were acting constructively with APRA ... we were taken aback substantially," Mr Griffiths told The Australian Financial Review. IOOF described the proceedings as misconceived in a statement to the ASX. When asked to expand on this, Mr Griffiths said:...
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NAB launches borrower blacklist in new credit crackdown Australian Financial Review 10 Dec 2018 4:10 PM Duncan Hughes   NAB has launched a blacklist of phrases and explanations no longer acceptable for borrowers seeking personal, household or residential investment loans as the bank tightens credit card lending and reviews minimum living expenses used for loan applications. The nation's third largest mortgage lender is introducing minimum mandatory responses from borrowers about why they need to borrow, their personal and financial circumstances and how they intend to repay. Bank staff and brokers, acting as intermediaries between borrowers and the bank, will no longer be able to respond to a written request for information from an applicant about expenses with "$0", or use commentary such as "agreed with customer", or "spoke to customer" on loan applications. Other banned phrases, which fail to provide any reasons relating to expenses, include "customer conversation hold", "refer to...
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There’s an ‘idiotic’ hole in the Australian Financial Complaints Authority’s bucket The Australian 4:58pm December 10, 2018 James Kirby   As the royal commission reviews the failings of mortgage brokers, a fresh loophole in the new consumer protection regime allows hundreds of mortgage brokers across the market to operate outside the system. An estimated 230 mortgage broking firms and individual operators are operating beyond the financial complaints safety net in yet another slab of evidence the regulatory system is riddled with gaps that leave the consumer exposed. The new Australian Financial Complaints Authority, which opened its doors just earlier this year is meant to monitor bad behaviour across the credit sector — but the loophole has forced AFCA’s inaugural CEO David Locke to publish the full list of recalcitrant mortgage brokers in a clear effort to name and shame the sector. However the plea from the regulator to get mortgage brokers...
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How Nicholas Moore built   Macquarie Bank into a $2.6b-   profit powerhouse   https://www.afr.com/brand/afr-magazine/how-nicholas-moore-built-macquarie-bank-into-a-26billionprofit-powerhouse-20180814-h13yea David Gonski thinks Nicholas Moore is a frustrated architect. That was the impression Gonski gained after Moore led him on a private tour in 2015 of Macquarie’s new headquarters inside the historic Commonwealth Bank building in Sydney’s Martin Place. Moore had taken a leading role in the building’s design and whereas most chief executives would have placed their office on a corner, facing outwards across bustling Martin Place, Moore wanted to look inwards, across the central atrium, at the Macquarie worker bees above and below. With the press of a button he can frost his glass walls whenever privacy is needed. That Moore’s office looks inwards is no mere architectural obsession. His penchant for keeping an eye over every part of Macquarie’s sprawling global business, and his never-ending fascination with dealmaking, are demonstrated by his practice of regularly allocating...
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Banks hoodwinked interest-only customers Australian Financial Review11 Dec 2018 12:30 AM James Frost   The big four banks used the cover of regulatory intervention to lift rates on interest-only loans and extract an additional billion dollars in profit, the Australian Competition and Consumer Commission has found. A report from the ACCC to be released on Tuesday will stop short of accusing the banks of colluding, however, it will describe the big four's decision to raise rates in June 2017 in unison as an example of "synchronised pricing" typical of the sector. The competition watchdog says the behaviour was aided and abetted by the "oligopoly market structure" that has the big four banks capture 80 per cent of the Australian marketplace. It says ANZ, which was the first to lift rates, did so expecting the others to fall in behind. "We consider that the interest-only benchmark created a focal point for the...
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Loan squeeze sparks call for six-week auction campaigns Australian Financial Review 09 Dec 2018 4:44 PM  Nick Lenaghan   Loans are taking so long to approve that the typical four-week sales campaign is now too short and should be extended, says a leading property market analyst. The tightening loan approval process is taking its toll on home auction markets with Sydney clearances on Saturday expected to fall below 40 per cent and Melbourne to hit the low 40 per cent range. With less than half the number of listed auctions reported, Sydney's clearance rate was at 44.4 per cent on preliminary results from Domain on Sunday. Melbourne was at 43.9 per cent. Last week, Sydney's final clearance rate came in at 35.8 per cent with a similar number of auctions listed as this week. Melbourne ended with a 40.6 per cent clearance. Veteran analyst Louis Christopher, from SQM Research, said agents...
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OECD: House price risks to economy but 'soft landing' ahead Australian Financial Review10 Dec 2018 6:00 AM John Kehoe   The weakening property market is a risk to the economy so economic policymakers must stand ready to respond, but a "soft landing" in home prices is the most likely outcome, the Organisation for Economic Co-operation and Development has advised in a detailed review of Australia. The OECD forecast good economic growth averaging 3 per cent this year and in 2019 and pointed to rising household debt at a time of softening real estate prices in Sydney and Melbourne as the main source of vulnerability. "House prices have fallen, although only gradually since late last year; the current trajectory would suggest a soft landing, but some risk of a hard landing remains," the OECD said in a report. "A direct hit to the financial sector from a wave of mortgage defaults is...
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Commonwealth Bank failed to notify police over 'blatant larceny' Australian Financial Review 09 Dec 2018 11:00 PM David Marin-Guzman   The Commonwealth Bank fired a personal lender for stealing more than $3,000 in cash from a Sydney branch but failed to report the matter to police, according to a new unfair dismissal ruling. Fair Work Commissioner Ian Cambridge, while upholding the sacking, said he was "surprised" the bank did not notify police given security camera footage of the "blatant larceny" and had instead paid the employee three week's salary in lieu of notice. The bank launched an investigation into its Earlwood branch in western Sydney in February this year after a third party contractor received an anonymous tip-off about activities going at the branch. Investigators uncovered CCTV footage from December 17, 2017 that showed a personal lender dividing a bound bundle of $100 notes into one larger and one smaller portion...
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Banks see rush of unfair dismissal rulings as employees face 'new level of risk' Australian Financial Review 09 Dec 2018 11:00 PM David Marin-Guzman   The Fair Work Commission has warned of a "new level of risk" for staff in financial institutions that could mean the end of their careers as the sector is hit by a rush of unfair dismissal rulings. Industry sources say unfair dismissal decisions for banks, once a rarity, have surged as organisations refused to allow quiet resignations in cases of misconduct and will no longer settle related unfair dismissal claims. The strict industry approach is in response to the Australian Banking Association's new "conduct background check" protocol ushered in last year to stop rogue financial advisers in the sector shuffling from one job to the next. The protocol, covering the big four banks, Macquarie, AMP and Suncorp, requires companies to share reasons for why an employee...
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ASIC deputy chair Karen Chester targets super shake-up Australian Financial Review 09 Dec 2018 11:00 PM Patrick Durkin   The Treasurer's hand-picked regulator plans to end the finger pointingabout who is policing the $2.7 trillion super sector. Karen Chester, one of the corporate regulator's fiercest critics, was chosen by Treasurer Josh Frydenberg on Friday to join the Australian Securities and Investments Commission to help lead the response to the Hayne royal commission and put a greater focus on super and competition in financial services. Confusion reigns over enforcement of the super sector with ASIC telling the royal commission that APRA had primary responsibility. However APRA admitted they had never brought a civil case against superannuation trustees, with Friday's case against IOOF executives their first major enforcement action. Ms Chester believes it is in ASIC's DNA to be the frontline enforcer. Data analytics are expected to be her key weapon to identify...
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AustralianSuper chief Ian Silk takes aim at banker bonuses The Australian 11:00pm December 9, 2018 Richard Gluyas   The nation’s biggest superannuation fund will vote against the ­remuneration reports of three major banks in the coming annual-meeting season, increasing the likelihood of first strikes against Westpac, National Australia Bank and ANZ. Amid a growing backlash against misconduct highlighted by the financial services royal commission, AustralianSuper chief executive Ian Silk said he was disappointed by the approach to executive pay taken by the boards of the three banks. “That the banks are proposing paying a bonus to executives this year indicates that the thresholds for ‘at risk’ pay are too low,” Mr Silk said. “Low thresholds effectively make ‘at risk’ payments part of fixed pay. “AustralianSuper wants to see appropriate thresholds which clearly demonstrate how any payment above a fixed pay component is linked to long-term value creation.” A first strike is...
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Mortgage brokers launch blitz against industry reform Sydney Morning Herald 10 December 2018 12:15am Nick Toscano   Australia’s mortgage broking industry will fund a nationwide advertising blitz to push back against the threat of tough new regulations in the wake of the financial services royal commission. Commissioner Kenneth Hayne’s interim report sparked concerns in the industry that mortgage broker payments would be overhauled, particularly around special commissions paid by banks to brokers for referring loans to them. The report said so-called upfront and trailing commissions, which depended on the size and length of the loan, increased the likelihood of misconduct and risky borrowing.  “What is plain ... is that value-and volume-based remuneration for intermediaries in the home loan industry has been an important contributor to misconduct and conduct falling short of community standards and expectations,” Hayne's report said. Mortgage brokers, in response, will embark on the large-scale advertising drive across print,...
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Curtain has come down far too soon on banking inquiry Adele Ferguson 1 December 2018   “We will adjourn.” With those three words, Kenneth Hayne bowed and drew the final curtain down on the royal commission into misconduct in the banking superannuation and financial services industry. If there was a sense of disquiet it was due to the topics and institutions that had been missed from this short yet headline-grabbing event.   In the 68 hearing days, covering 134 witnesses and thousands of exhibits we have seen dishonesty and entrenched conflicts of interest. We have watched the flawed, arrogant – and sometimes contemptuous - leaders that run the nation's biggest financial institutions. We have had rampant, institutionalised corruption on full display. Regulators negotiating soft outcomes and compensation delayed for years, have been common themes. The royal commission has already had a profound impact on these organisations. It hasn’t gone far enough...
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As the banking royal commission’s hearings conclude, it can be revealed the banks have made $88 million in tax-deductable donations to avoid major penalties.   By Michael West. Bank penalties disguised as charitable donations Here is a troubling fact that has largely escaped scrutiny during the banking royal commission: for the past 10 years, rather than being penalised for breaches, it appears the banks have been receiving tax deductions for their crimes and misdemeanours. Instead of paying fines, they have been making donations to charities – a “no fault” solution to dealing with financial offences. And in more than 70 per cent of cases, there is no record of where this money has gone. The Australian Securities and Investments Commission’s (ASIC) decade of deals with the banks began in March 2009 when its then chairman, Tony D’Aloisio, struck an “enforceable undertaking” (EU) agreement with ANZ Banking Group. ANZ had been a key...
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  New ASIC deputy chair Karen Chester ready for fight The Australian 9:00am December 7, 2018 Michael Roddan   Karen Chester has been named a new deputy chair of the corporate watchdog, replacing outgoing commissioner Peter Kell in an appointment that is expected to bring a voice for tougher enforcement and a focus on competition and consumer outcomes to the nation’s top financial regulator. It’s a further strengthening of the ranks of the Australian Securities and Investments Commission, which has been pummelled at the Hayne royal commission and by politicians and consumer groups for failing to tackle misconduct in the banking and financial services sectors. Currently deputy chair of the Productivity Commission, Ms Chester conducted a thorough review of ASIC’s enforcement failures in 2015. ASIC has been gearing up to take a more aggressive footing in its dealing with rogue financial outfits with the appointment of its chief litigator Daniel Crennan...
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Shadow banks two-and-a-half times more likely to approve loans than big four Australian Financial Review07 Dec 2018 5:40 PM Duncan Hughes   Mortgage borrowers are two-and-a-half times more likely to have a home loan approved by a regulation-lite shadow bank than a big four competitor, analysis reveals. A yawning gap between the sectors has been widening since February when the banking royal commission put the spotlight on authorised deposit-taking institution (ADI) lending practices, particularly for the big four lenders. But shadow, or non-banks have been gaining market share since early 2016 when macro-prudential controls imposed by regulators targeted lending standards in a successful bid to ease pressure during the property boom. Two sets of data – commissioned by AFR Weekend – reveal how shadow banks have been eroding ADI market share with more competitive products and higher numbers of loan approvals. "Shadow banks have had lighter regulation and the more favourable...
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Investors want IOOF cleanout after APRA's shock move Australian Financial Review07 Dec 2018 10:31 PM Misa Han   Investors are calling for the IOOF board and management to go after an emboldened prudential regulator took the wealth giant to court for allegedly breaking superannuation laws. The shock move, just months after the Australian Prudential Regulation Authority was lambasted for failing to police the superannuation sector at the Hayne royal commission, saw IOOF shares plunge by more than a third and left its deal to take over ANZ's wealth arm hanging by a thread. Three years after it first raised the alarm with IOOF over widespread conflicts of interest, the Australian Prudential Regulation Authority has asked the Federal Court to disqualify the group's chief executive Chris Kelaher, chairman George Venardos and three senior executives from sitting on super fund boards. Fund manager Reece Birtles, who manages money for IOOF's major shareholder Legg...
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Bubble boys: Who's in Scott Morrison's inner circle? Australian Financial Review 07 Dec 2018 11:00 PM Andrew Tillett   When Malcolm Turnbull began trying to torpedo Scott Morrison's efforts to save Craig Kelly's preselection this week, the Prime Minister turned to a man who had been a confidant to both the current and former leaders for help. Scott Briggs' only official position in the Liberal Party hierarchy is the president of Morrison's local Federal Electorate Council for his seat of Cook but when Briggs calls, people know he's speaking for the PM and on Sunday and Monday, he hit the phones. While Morrison is known to have called at least one member of the NSW Liberal Party State Executive, Sally Betts (a Waverley councillor close to Turnbull) to prevail upon on her to let Kelly survive, Briggs repeatedly spoke to executive members to ensure Morrison's position carried the day. One NSW...
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Conflict of Ethics: the banks and the Ethics Centre michaelwest.com.au Dec 8, 2018 Michael West   Chasing the murky money trail for the payments made by Australia’s banks as punishment for their systemic fraud, Michael West finds some of the money has found a home at The Ethics Centre, in ethics programs for the banks. Who knew? The Ethics Centre has long decried “bank bashing”. Nor has its executive director, Simon Longstaff, seen the need for a royal commission into the banks, contending the powers of the corporate regulators were already enough to curb their foibles. “The community doesn’t see the extraordinary diligence with which the regulators go about their work,” wrote Longstaff in a piece published in Fairfax Media last year. “This is as it should be. Except in cases of criminality, it is often better to work quietly to identify and fix problems rather than splash them across the news. There’s little virtue...
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Banks and other big companies face billions in fines under Labor plan Australian Financial Review06 Dec 2018 7:48 PM John Kehoe   Banks and other big companies would face unprecedented fines of billions of dollars rather than a capped $210 million for civil offences, under changes that Labor wants to make to a federal bill. Big business is alarmed that Labor's eleventh hour proposal would drive up their insurance costs even if they never cop a fine or do nothing wrong. Business Council of Australia chief executive Jennifer Westacott said Labor's arbitrary increase in penalties for corporate offences was an "unnecessary regulatory overreach" and appeared to be "political expediency". "There has not been any time for a thorough examination of the consequences of these sudden changes, for example the possible impacts on insurance and funding costs and the flow through effects on prices," Ms Westacott said. Abolishing the government's proposed $210...
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Macquarie Bank set to shake up residential mortgage market Australian Financial Review 06 Dec 2018 5:15 PM Duncan Hughes   Macquarie Bank is set stop underwriting new "home-branded" loans for several household name lenders and focus on its own products. It comes as the industry grapples with falling property sales and revenues, intense scrutiny from the prudential regulators and the prospect of sweeping recommendations by the banking royal commission intended to improve competition and boost transparency. Macquarie is blaming the technological and operational complexity of its so-called "white label" operations and the likely regulatory fallout from increased scrutiny of competition and remuneration. The move will trigger strategic realignments throughout the industry as former competitors move to fill a void that will filter through product manufacturing, distribution and product choice. It could also shake up several key relationships between lenders and mortgage brokers, who act as intermediaries between property buyers and lenders,...
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Credit risks ‘real and rising’, says UBS The Australian 12:02pm December 6, 2018 Samantha Bailey   The current credit squeeze could deteriorate into a full credit crunch if banking royal commission recommendations result in reduced borrowing capacity, further restricting the flow of lending and credit growth, UBS analysts say. In a note to clients predicting the impact of possible Hayne royal commission recommendations, UBS analysts led by Jonathan Mott said they remained very cautious on the banks, as fundamentals on the sector continue to deteriorate. “The banking sector is facing a period of substantial and sustained earnings pressure which is likely to last several years,” UBS analysts said. “The risk of the current credit squeeze turning into a credit crunch is real and rising, with the housing market now falling sharply.” Their recommendations come ahead of the release of commissioner Kenneth Hayne’s final report, which is due out by February 1....
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RBA in 'uncharted territory' on falling house prices says deputy governor Guy Debelle Australian Financial Review 07 Dec 2018 1:46 AM Matthew Cranston   The Reserve Bank is in "uncharted territory" when responding to falling house prices and can only wait and see what happens to weaker consumption over the next few months to get a clearer view on economic growth according to deputy governor Guy Debelle. Dr Debelle told economists at the annual Australian Business Economists dinner on Thursday night that the situation of falling house prices was "absolutely something we are paying attention to" both from the lending perspective and with a view to the impact on the economy. "From what I can tell what we haven't seen anywhere in the world is a decent fall in house prices in two capital cities at the same time unemployment is going down and the economy is growing at a reasonable...
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Stanford professor Anat Admati slams local banks, labels APRA reforms ‘outrageously inadequate’ The Australian 2:38pm December 5, 2018 Adam Creighton   A top international finance expert has slammed the banking regulator’s prudential reforms as “outrageously inadequate”, suggesting the post-crisis reforms, part of a global rollout, have done little to make banking safer or more ethical. Anat Admati, Professor of Finance at Stanford University, said the misconduct uncovered in the royal commission was common place in banking around the world. “The financial sector is particularly prone to these problems because it’s easy to confuse people, it’s easy to hide harms that we can’t see physically,” she said. “You in Australia have four big banks, with little competition, that are too big to fail, and which fund themselves abroad in very fragile way,” she added, speaking to Your Money today. Australia, she said, had avoided the worst of the financial crisis but was...
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