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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
Bank analysts turn bearish on royal commission outcome Australian Financial Review Feb 21 2018 8:17 AM James Frost   The big four banks have received a third set of requests from the banking royal commission around specific product lines ahead of two weeks of public hearings focused on consumer credit products. Commissioner Ken Hayne has written to the banks with the expectation they will make the relevant executives with knowledge of the products available to the royal commission when public hearings begin on Tuesday, March 13. Analyst commentary around the sector has turned bearish in recent days as experts brace themselves for a series of bruising encounters with regulators described by one as "moments of truth" which threaten to crimp bank returns in the years ahead. UBS analyst Jonathan Mott has revised his 12-month share price targets for the big four banks already down 5 per cent to 6 per cent...
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Home loan alert: $140bn mortgage shock looms for Australian economy Herald Sun February 21, 2018 12:14pm Jeff Whalley   THE number of Aussie property investors facing a rude shock this year as their mortgage payments spike is much higher than previously thought, a new analysis suggests. More than $140 billion in interest-only home loans could mature this year, sending a shockwave through the Australian financial system, according to the analysis. It suggests a rude awakening is in store for Australia’s financially-stretched housing investors as the property market cools. The analysis indicates the number of investors facing a surge in their repayments this year — as their interest-only periods end — may have been grossly underestimated. The warning comes after the Reserve Bank yesterday raised concerns about financial stress among investors who took out mortgages at the height of the boom. Assistant governor Michele Bullock noted many interest-only loans, written before lending...
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NAB swings axe on first 1000 jobs Australian Financial Review Feb 19 2018 11:02 AM James Frost   NAB is poised to cut 1000 jobs as part of a strategy to remove layers of middle management and simplify the bank that was announced by chief executive Andrew Thorburn in November. The bank needs to make 1000 positions redundant every six months as part of a plan to cut a total of 6000 jobs over three years while bolstering its workforce with 2000 technology specialists. The first tranche of job cuts, as flagged by The Australian Financial Review's Street Talk column last week, were confirmed by the bank on Monday morning. NAB's chief people officer Lorraine Murphy acknowledged it was a difficult time for those affected by the cuts in internal communications seen by the Financial Review. "We said we would provide the utmost care and respect for all of our people,"...
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Department of Finance accused of fudging efficiency data Australian Financial Review Feb 18 2018 11:00 PM Edmund Tadros   The Department of Finance has been accused of fudging data to argue that an ongoing crackdown on departmental spending was reducing the overall cost of running the federal bureaucracy. The data, which formed part of a Finance submission to the ongoing inquiry in the use of consultants, purported to show department expenses as a proportion of total government expenses was falling over time from 8.5 per cent, or $23.7 billion of total general government sector expenses of $280.5 billion in 2007-08, to 7.1 per cent in 2015-16. Finance used the data in a graph, table and accompanying commentary in its submission to assert "the net impact of entity resource decisions, including the appropriate use of procurement, is continuing to improve the efficiency of government service delivery". The only problem is that while...
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Farm debt: Banking royal commission tipped to move on agribusiness mediation Australian Financial Review Feb 18 2018 11:00 PM James Frost   The banking royal commission is being urged put an end to the patchwork of state-based mediation schemes for agribusiness customers and establish a single national body for working through disputes with banks. The move would deliver the time-poor inquiry headed by Commissioner Kenneth Hayne an easy win, with the current state-by-state system enjoying few supporters. National Farmers Federation policy director Tony Mahar said the existing system, which only guaranteed farmers in Victoria, NSW and Queensland with access to a formal mediation service, was inadequate. "It's fragmented and unhelpful, what we need is a national approach for farmers and financial institutions." The Hayne royal commission is believed to be aware of the disjointed approach to mediation, drawing attention to the problem by dedicating two pages of its recent report on...
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SMSF limited recourse borrowing must stop The Australian 12:00am February 19, 2018 Glen McCrea Glen McCrea is chief policy officer at The Association of Superannuation Funds of Australia.   Volatility in equity markets recently is a useful reminder not to put all your eggs in the one basket. It tells us that what goes up can go down rapidly. This reminder also applies to the quarter-acre block or the apartment off the plan. The low-interest environment in recent years has helped fuel demand for property by investors, including mums and dads and self-managed superannuation funds. A risk to the retirement savings of individuals and a structural risk to economy have been created because many SMSFs are borrowing to purchase property. This borrowing grew 50 times, from $497 million in June 2009 to $25.4 billion by June 2016. More than 90 per cent of it related to property. Growth by 5000 per...
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Royal commission chief Kenneth Hayne should break up banks The Australian 12:00am February 17, 2018 Alan Kohler   The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry got off to an innovative start in December with commissioner Kenneth Hayne asking his class to set out their misconduct in 50 pages or less, quick smart. “Right then, what have you been up to? Come on you lot, I haven’t got all year. Out with it!” (Arms folded, foot tapping.) All responded with their 50 pages, on time, but some of the essays were not up to scratch. “You there, what do you call this?” he said this week. “I asked you to specify the nature, extent and effect of your misconduct, but you just listed the nasty things you did, you disgusting bank. Not good enough!” “Sorry sir, but we can’t do it. You haven’t given us enough...
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Distressed $1 million-plus property sales a 'warning' to mortgage holders Australian Financial Review Feb 16 2018 11:00 PM Duncan Hughes   The distressed sale of a $2.5 million luxury townhouse with sweeping views of Melbourne's bay and skyline should be a wake-up call for financially-stressed property buyers, say estate agents. Realtor Andrew Fawell has valued four distressed – or mortgagee–  sales in the past two weeks for houses and apartments valued between $1 million and $2.5 million located around Melbourne's coveted, prestigious and expensive inner south-east fringe. "The drum is starting to beat," says Fawell about home buyers and investors who might be feeling pressure from rising repayments, static incomes and stagnant rents. "I expect to be doing it a lot more often over coming months," he says. "But lots of property buyers and investors are in denial about their precarious situation." Strong economic growth, high employment,  growing immigration and record...
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ANZ and Westpac Group tighten grip on residential property Australian Financial Review Feb 15 2018 1:11 PM Duncan Hughes   Westpac Group and ANZ, which combined account for nearly 40 per cent of the nation's mortgage lending, are tightening control over borrowers with confidential changes to assessment, approval and monitoring. ANZ, whose broker network accounts for about 56 per cent of mortgage flows, is clipping the discretion of frontline mortgage assessors that deal directly with mortgage brokers and customers in loan approvals. Mortgage brokers claim banks appears to be showing less flexibility interpreting guidelines when assessing loan applications on issues such as some forms of irregular income, such as bonuses or part time work. A bank spokesman said it is regularly reviewing lending practices "to make sure they are in line with community expectations and our own risk appetite". "We recently added a higher level of approval for some discretions applied...
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Ratings agencies give themselves big tick on compliance Australian Financial Review Feb 15 2018 9:00 PM James Frost   A deep dive into the way credit rating agencies compile compliance reports has revealed serious deficiencies, including a disturbing lack of rigour and detail about what has been reviewed. In what will make for difficult reading for anyone who has been on the wrong side of a downgrade, corporate regulator ASIC's review of the ratings agencies has revealed multiple instances of agencies paying lip service to compliance, including examples where overseas staff produced credit ratings without proper accreditation. The report looked at the governance, compliance and testing processes of the credit rating agencies highlighting an instance where the annual compliance report was one page long and another where the CEO produced the report and then signed off on it as a board member. The report may undo some of the work rating...
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APRA proposal targets higher risk home loans Australian Financial Review Feb 14 2018 11:00 PM James Frost   The Australian Prudential Regulatory Authority has released a proposal that will require banks to differentiate risk weightings for residential mortgages and potentially increase the cost of writing higher-risk loans. The proposal makes a series of recommended changes to the risk weightings big and smaller banks should apply to owner-occupier, investor, interest-only and non-standard loans. The paper also includes several references to the level and intensity of residential property investment in Australia and the growing proportion of mortgages held by the big four banks. "APRA's view is that there are potential systemic vulnerabilities to the financial system created from high levels of residential mortgages lending for investment purposes," the paper states. [You can download the APRA discussion paper here, if you’re interested. –RJB] CLSA analyst Brian Johnson said the proposal was likely to make...
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Westpac, NAB miss Kenneth Hayne's deadline for huge data dump Australian Financial ReviewFeb 13 2018 8:00 PM James Frost   Westpac and NAB failed to meet the banking royal commission's Tuesday 4pm deadline for a second and comprehensive report on misconduct going back five years, risking the wrath of Commissioner Kenneth Hayne. The Australian Financial Review understands Westpac has been unable to provide the commission with all of the information it has been asked for and will file a further report or reports over coming days. The bank's multi-brand strategy, which includes St George, Bank SA and Bank of Melbourne, is believed to add to the complexity of the request. A spokesperson for Westpac said the bank was lodging a comprehensive response to the request on Tuesday. "Westpac understands the important work of the Commission and seeks to work co-operatively and constructively with it," the spokesperson said. NAB is believed to...
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  Banking royal commission circles new targets over car loans Australian Financial Review Feb 13 2018 6:00 PM James Frost   Specialist lenders including Macquarie Group, Toyota Financial Services and Latitude Finance will join the big four banks as Hayne royal commission targets when providers of car loans come under the microscope for poor lending standards and gouging customers. The auto finance market was singled out by the royal commission as a key area of interest after early investigations revealed examples of lending that were not conducted honestly or fairly. The dealer finance market is dominated by Toyota, Westpac and Macquarie with the finance arms of Mercedes-Benz, BMW and Nissan close behind. Among the worrying business practices that have been discovered to date are irresponsible lending, flex commissions and junk insurance. The royal commission on Monday said it was interested in completed case studies of misconduct, which suggests it will focus...
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  CBA borrowers stung in switch The Australian 12:00AM February 14, 2018   Commonwealth Bank will hit some home loan customers with tens of thousands of dollars extra in interest charges by extending the life of loans. The lender, which has the biggest share of the nation’s mortgage market, has notified borrowers of changes to repayments and ­to redraw balances, some of them beginning this week, the Herald Sun reported last night. The changes come as the royal commission declared home loans, car loans and credit cards would be put under the microscope at its first public hearing next month, with the inquiry ­already uncovering evidence that lenders may have breached the law by failing to treat borrowers “honestly and fairly”. CBA will now automatically ­reduce minimum mortgage repayments for customers if their interest rate falls, the newspaper reports. Borrowers who want their repayments to remain at the original level will...
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Banking Royal Commission: Kenneth Hayne's pop-up commission no crowd-pleaser Australian Financial Review Feb 12 2018 9:36 PM Patrick Durkin   Royal Commissioner Kenneth Hayne was always going to run a tight ship. But a few telltale signs from Monday's scripted hearing, revealed just how far removed from a media and political circus Hayne wants things to run. When aggrieved NAB customer Dennis Sgargetta provided the only unscripted moment by jumping up at the conclusion of events to quote something called the ninth divine law, Hayne maintained his deadpan, matter of fact manner, simply repeating that the hearing was now adjourned. Outside the Fair Work Commission in Melbourne, a handful of onlookers mingling outside asked why the hearing had finished so quickly, "So they will get into things full-steam tomorrow?" they asked expectantly. No, the commission will be working "behind the scenes" for the next month, before the first public hearings pop-up...
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Big banks rapped for missing dirty laundry list  deadline! http://www.smh.com.au/business/banking-and-finance/big-banks-rapped-for-missing-dirty-laundry-list-deadline-20180211-p4yzzo.html Sarah Danckert   SMH Major financial institutions have been admonished by the banking royal commissioner, Kenneth Hayne, after it emerged some had been unable to properly complete a list of their misconduct within the requested timeframe. The big four banks are understood to have rankled Commissioner Hayne by submitting incomplete 'rap sheets' despite being asked to detail all circumstances of poor banking behaviour. The criticism came on the first day of the royal commission into misconduct in the banking superannuation and financial services industry, which will first review consumer credit products including home loans, credit cards and other loans like car loans. In an opening statement in Melbourne on Monday, Commissioner Hayne revealed that some large financial institutions had indicated they would not be able to meet the royal commission’s deadline to complete their full list of dirty laundry by Tuesday. Major...
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Banks royal commission: Banks miss first downpayment The Australian 12:00am February 13, 2018 Ben Butler   Commonwealth Bank and ­National Australia Bank earned the wrath of financial services royal commissioner Kenneth Hayne on the inquiry’s opening day by telling him they cannot meet a deadline of 4pm today to provide full details about misconduct over the past five years. Both banks intend to file as much as they can by today’s deadline but expect to have to file ­additional material later. Opening the commission yesterday, Mr Hayne complained that financial services institutions had told him they needed more time to compile information about their misconduct, even though they had already made 50-page submissions about both misconduct and behaviour that did not meet “community expectations” stretching back to 2008. His opening comments give some insight into how Mr Hayne intends to conduct the hearings, which have a tight one-year timetable given the...
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Waive confidentiality or face a parallel Senate bank inquiry Australian Financial Review Feb 12 2018 9:57 AM Tom McIlroy   A key Nationals senator behind the push for a banking royal commission says the first day of hearings has left uncertainty for customers who have signed confidentiality agreements with institutions, describing the situation as "clear as mud". NSW National John 'Wacka' Williams said royal commissioner Kenneth Hayne needed to clarify what protections would be afforded to victims of poor behaviour who had signed non-disclosure agreements with regional banks, life insurance companies and superannuation funds. Mr Hayne, a former High Court judge, used the first sitting in Melbourne on Monday to warn institutions planning to enforce non-disclosure agreements or confidentiality clauses they would face "immediate consequences" which could include powers to compel information. "The very fact that an institution sought to inhibit or prevent the disclosure of the information would excite the...
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Royal commission strangled before it begins   Adele Ferguson  9th Feb 2018   Farcical, damp squib, paper tiger, stillborn. They are just a few of the words being used to describe the long awaited and much needed royal commission into financial services. For me the royal commission is shaping up as disappointing – even before it has begun. A ridiculously tight budget, a short timeline, extremely broad terms of reference and an exclusion from looking at anything that might "prejudice, compromise or duplicate" another inquiry or court proceedings threaten to strangle it. The financial services sector is a complex, opaque and powerful industry with deep pockets. The royal commission itself estimates at the end of September 2017, Australian deposit taking institutions held $4.6 trillion in assets, which is two-and-a-half times the size of Australia's $1.8 trillion economy as measured by GDP. It is the lifeblood of the economy and covers many...
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Bad WA home loans push CBA delinquencies up to four-year high Australian Financial Review Feb 7 2018 5:54 PM Michael Bleby   CBA home loan arrears jumped in WA in the six months to December, pushing the lender's overall bad loan book to its highest level in more than four years. The largest mortgage lender, which reported a weaker-than-expected a cash profit of $4.73 billion on Wednesday, said home loans 90 or more days in arrears accounted for about 0.6 per cent of its loan book in the first half of the year as the proportion of bad loans in the mining state picked up to about 1.3 per cent, well above Queensland, the closest region in terms of arrears. "Loan impairment expense was $356 million, an increase of 1 per cent on the prior comparative period," CBA said. "The result was mainly driven by increased home loan and personal loan...
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APRA boss Wayne Byres 'not declaring victory' even as investor lending drops 10pc Australian Financial Review Feb 9 2018 2:59 PM Michael Bleby, James Eyers   Australia's top banking regulator refused to call an end to tighter credit restrictions that have slowed investor lending, even as new figures showed investor loans fell at their fastest yearly pace in 18 months in December. In his first public comments since Treasurer Scott Morrison told The Australian Financial Review that macroprudential lending measures could be eased, APRA chairman Wayne Byres on Friday said banks' loan portfolios were improving but it was too soon to release the brakes on the temporary measures. The environment of high dwelling prices, high household debt levels, low interest rates and weak wages growth that triggered the initial concerns and prompted the regulator to direct lenders to rein in riskier types of loans "hasn't changed greatly over the past 12...
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Property slump could push the economy into recession, top economists warn Australian Financial Review Feb 9 2018 6:18 PM Duncan Hughes   Falling property prices in Sydney and Melbourne could cause the nation's wealthiest consumers to cut back sharply on spending and drive the economy into recession, according to leading economists. Belt tightening by the biggest spenders and most highly geared property investors could have the "unintended consequence" of seriously squeezing retail spending, their research finds. Growth in consumer spending – which accounts for nearly 60 per cent of gross domestic product – could fall by half over the next 12 months, weakening economic growth unless offset by major capital expenditure by governments and business, economists warn. Daniel Blake, chief economist for investment bank Morgan Stanley, said: "A slowing housing market could force reassessment of gearing and lead to a household balance sheet recession. This is the most likely cause of...
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Banking royal commission puts lawyers on notice The Australian 12:00am February 10, 2018 Ben Butler   High-powered QCs hired by Australia’s big banks will be severely limited in how much they can question the credibility of witnesses to the sector’s scandals who give evidence at the royal commission into financial services. In a practice guideline published to its website, the commission said that “cross-examination of witnesses will be by leave only” and “repetitive questioning” would not be permitted. “As the commission is conducting an inquiry, and not a ­judicial proceeding, cross-examination that raises collateral matters going only to credit will not be permitted,” it said. The banking commission, helmed by former High Court judge Kenneth Hayne, begins on Monday but is already mired in confusion after being unable to clarify whether or not victims and employees should make submissions to it that break gag clauses in settlement deals. Despite the commission’s...
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Batting for the banks: top silks get ready for royal commission Sydney Morning HeraldFeb 10 2018 - 1:03am Sarah Danckert   The biggest legal show in the country is about to open in Melbourne when former High Court justice Kenneth Hayne’s Financial Services Royal Commission (FSRC) begins its public hearings next week. And there's no shortage of stars given the raft of top QCs required to serve the sheer number of financial institutions involved in the short-tenured 12 month inquiry. The big financial services outfits have set up ‘war rooms’ within their respective headquarters where executives and teams of inhouse and external lawyers will watch the proceedings on a live feed. The list of big name silks - the sort of barristers that often charge five figures for a day's work - recruited by the big four banks, AMP, Macquarie indicate the financial institutions involved are taking the matter very seriously....
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Royal commissioner Kenneth Hayne zeroes in on ANZ, CBA, NAB, Westpac profits Australian Financial Review Feb 9 2018 3:52 PM James Frost   Commissioner Kenneth Hayne has dropped his biggest hint yet as to the focus of his inquiry after publishing a paper that focuses on the level of competition in banking and the elevated returns on equity produced by the big four banks. The Royal Commission into misconduct in the banking, superannuation and financial services industry released the 27 page background paper exploring the structure of the Australian banking Industry without warning on Friday. The inquiry kicks off on Monday with Commissioner Hayne expected to deliver a televised statement. Titled 'Some Features of the Australian Banking Industry', the paper looks carefully at the bumper profits delivered by the big four banks including the $35.9 billion in profit made in the year to September 2017. The banks have gone to considerable...
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