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BFCSA
MORTGAGE
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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
PM Malcolm Turnbull backs plans for integrity officers The Australian 12:02am August 4, 2018 Michael Roddan   Malcolm Turnbull has thrown his weight behind a proposal to ­expand laws requiring Australia’s biggest banks to sell products only in their customers’ best interests, under the threat of regulatory action if employees breach their duty. The plan to install an “integrity officer” at all lenders, who could report to the corporate watchdog if bank boards ignored pleas to overhaul remuneration in conflict with good customer outcomes, was one of many ­recommendations in a scathing Productivity Commission review of competition in the financial system. The review criticised the banks for pushing onto customers a “blizzard of barely differentiated” and overly ­expensive products to ramp up profits. Releasing the report yesterday, Scott Morrison savaged the big banks for punishing loyalty and keeping customers “in the dark”. The Treasurer said customers who stayed with the same...
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Malcolm Turnbull defends surprise $444 million Government donation to tiny reef body ABC News4 August 2018 Louise Yaxley   Malcolm Turnbull insists the Government's nearly half-a-billion-dollar donation to a private foundation with links to big resources companies has been done transparently, despite the body itself not asking for the money. In April the Government announced it would give the Great Barrier Reef Foundation $444 million to fund projects to improve the health of the reef. The foundation had only six staff when it was told it was getting the huge grant, which managing director Anna Marsden told Radio National was an "absolute surprise". The $444m donation is the largest Government donation to a private foundation in Australian history, and Federal Labor is demanding an explanation of why no tenders were called. Mr Turnbull defended the decision on Friday, calling it the "single biggest contribution and investment in the health of the...
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Moody’s warns of default spike as interest-only loans mature The Australian 12:00am August 3, 2018 Richard Gluyas   Moody’s has warned that Australian mortgage delinquencies will rise over the next two years as a record number of interest-only loans convert to principal-and-­interest payments. This would reduce the creditworthiness of residential mortgage-backed securities. “Refinancing of interest-only mortgages is also becoming more difficult, which will contribute to an increase in mortgage delinquencies,” the credit-rating agency said. The forecast blowout in delinquencies relies on Moody’s data that shows loans converting to principal-and-interest repayments after an interest-only period had a 90-days-past-due delinquency rate of 0.94 per cent in November last year — double the rate for interest-only loans yet to convert. The rate was 24 basis points higher than the overall ­delinquency rate for securitised mortgages. When interest-only loans convert to principal and interest, typically after a period of five years, borrowers often experience a...
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Treasurer Scott Morrison lashes the banks, regulators on competition Australian Financial ReviewAug 2 2018 11:00 PM James Eyers   EXCLUSIVE  Treasurer Scott Morrison will deliver a harsh reprimand to the banks and regulators today, chastising lenders for exploiting customers' loyalty, which he says is costing each up to $87 a month. As the banks promote their new code of conduct to protect consumers, the government will release on Friday the Productivity Commission's final report into competition in the Australian financial system, which has found banks have sustained prices above competitive levels, offered customers inferior quality products, subsumed much of the broker industry and stopped competitors expanding in some markets. "All are indicators of the use of market power to the detriment of customers," the report says. The commission's recommendation for banks to create an "integrity officer" to monitor mortgage brokers is "an interesting idea" that could have broader application, Mr Morrison...
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Super: the $1m difference between retail and industry funds The Australian3:01pm August 2, 2018 Anthony Klan   The $2.6 trillion super industry has on average delivered poor returns over the past two decades due to the underperformance of super funds run by the Big Four banks and major financial institutions, costing the nation more than $12 billion a year, according to an expert submission to the Productivity Commission. The detailed report by analyst Wilson Sy, formerly a principal researcher with the Australian Prudential Regulation Authority, says the poor performance is “largely attributed” to for-profit retail funds, which have delivered returns well below market rates. According to the report, filed with the Productivity Commission on July 23, retail funds delivered an average return of 4.6 per cent a year, compared to an average 6.7 per cent for “industry” or not-for-profit funds.  “At March 2017, retail sector assets were $577bn; if the retail...
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David Murray's defiant plan for AMP Australian Financial Review Jul 31 2018 11:00 PM Tony Boyd   EXCLUSIVE  AMP chairman David Murray says he will push back hard against the ASX corporate governance principles and restore the primacy of the chief executive at the troubled wealth manager, to make the board and management more clearly accountable for their actions. "I think the board's got to conduct itself in a way that it looks to the CEO for everything," he said. In his first in-depth interview since replacing Catherine Brenner as chairman of AMPin June, Mr Murray said he would strengthen internal control systems, give increased power to AMP's internal auditors and put more distance between management and non-executive directors. Mr Murray said the ASX governance principles had led to directors being swamped by hundreds of pages of board papers and not having enough time to debate important strategic issues, which he...
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Treasury not worried about vertical integration. Not a problem The Adviser 31 July 2018 Tas Bindi   The Australian Department of Treasury has told the financial services royal commission that there is a lack of evidence showing that consumers are being harmed by vertical integration. In a background paper to the financial services royal commission, the Department of Treasury agreed with a recommendation made through antecedent inquiries, such as the Financial System Inquiry and ASIC's review of broker remuneration, that lender-owned aggregators and brokerages should be transparent about their ownership to customers. However, Treasury believes that while there are "risks" with vertically-integrated models, there is limited evidence to show that consumers are being harmed by vertical integration. Touching on ASIC’s findings that lenders’ shares of the flow of vertically-aligned aggregators were “substantially higher than their overall share of brokered home loans” when there was also a white label arrangement in place,...
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Credit crunch could hit house prices by 20pc: Endeavour Australian Financial Review Aug 2 2018 12:03 AM Jonathan Shapiro   Sydney and Melbourne house prices could fall by 15 to 20 per cent in a repeat of the late 1980s and '90s, an independent equity research firm has argued, citing the "largest regulatory credit crunch in 30 years" as the cause for the slide in property values. Endeavour Equity Strategy said in a detailed 30-page report that more evidence had emerged to support its claims that about 40 per cent of all mortgages were "non-prime", based on the level of borrower's income relative to debts, as it called on the prudential regulator to force the banks to increase their disclosures of mortgage risk. A crackdown on the use of measures that understated borrower expenses, and overstated their borrowing capacity, would reduce loan values by up to 30 per cent and have...
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A Housing Bubble Pops: Update on Australia Wolf StreetAug 1, 2018 Wolf Richter   In Sydney, Australia’s largest housing market and one of the world’s biggest housing bubbles, prices of homes of all types fell 5.4% in July compared to a year ago, and 5.5% from the peak in September. Prices of single-family houses dropped 7.0%, and prices of condos (“units”) fell 1.6%, according to CoreLogic’s Daily Home Value Index: The most expensive quarter of the market got hit the hardest, with prices down 8.0% in July compared to a year ago. Across the so-called “most affordable quarter of the market” – “least unaffordable” would be more appropriate – prices fell by 1.8%. And supply in Sydney is starting to come out of the woodwork: Total number of homes listed for sale in July, at 26,103, was 22% higher than a year earlier, and according to CoreLogic, the most since July...
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New quality of financial advice rating system to probe licensee governance Australian Financial Review Jul 31 2018 6:21 AM Alice Uribe   EXCLUSIVE   A federal government-backed body has thrown its weight behind a plan for a national financial advice rating system for planning firms, as the sector attempts to reverse the destruction of trust brought about by a raft of bruising royal commission revelations. Consumer group Adviser Ratings on Tuesday unveiled a proposal for a "quality of financial advice rating system" which would rank more than 1800 financial advice licensees using metrics such as quality of internal governance, and whether its authorised representatives have ever been banned. "The focal point of our methodology is to predict actions within a licensee that are detrimental to clients' interests. Chief among these are instances of misconduct," said an accompanying white paper co-authored by Adviser Ratings' chief executive Mark Hoven and Jerry Parwada, professor of...
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Housing stress in Sydney hits a new high Sydney Morning Herald 30 July 2018 11:01pm Matt Wade   Sydney’s long property boom has left one in eight low and middle-income earners across the city in housing stress, the highest proportion in Australia. The latest Household, Income and Labour Dynamics in Australia (HILDA) survey shows the rate of housing stress in Sydney was 10.1 per cent between 2001 and 2004 but reached an all-time high of 13 per cent between 2013 and 2016. The respected study has also revealed a sharp decline in the share of those aged under-45 making the mover to home ownership suggesting the transition from renter to homeowner has become much more difficult. People living in flats have the highest rate of housing stress followed by people living in semi-detached houses. Those living in detached houses have the lowest rates of housing stress. The report found growth in...
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Minnows clear path for Big Four mortgage rate hikes: Moody’s Investors Service The Australian 11:08am July 30, 2018 Cliona O’Dowd   Higher funding costs that have forced smaller banks to raise home loan rates will make it easier for the majors to follow suit, according to ratings agency Moody’s Investors Service. The action by the smaller lenders also shows they are holding on to their pricing power despite the challenges confronting the big banks, Moody’s said in a new report released today. “The smaller banks have been prompted to action because of higher wholesale funding costs and slower loan growth, but the Big Four — which have traditionally led on rate changes — have so far held back, possibly because of political scrutiny against the backdrop of Australia’s ongoing royal commission into financial services,” Moody’s analyst Tanya Tang said.  “The action of the smaller banks could make it easier for the...
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Malcolm Turnbull under pressure to dump company tax cuts Australian Financial Review Jul 29 2018 9:36 PM Phillip Coorey   Malcolm Turnbull faces pressure to dump his company tax cuts after a poor showing in Saturday's byelections stoked concerns in his party that he will struggle to win seats in the clutch state of Queensland at the federal election. By contrast, Opposition Leader Bill Shorten, who faced a possible challenge had Labor failed to hold its seats in the byelections, has cemented his position after Labor retained the key Queensland seat of Longman with an increased margin, held Braddon in Tasmania, and cruised to victory over the Greens in Western Australia to retain the seats of Perth and Fremantle. The Liberals failed in their bid to take back the South Australia seat of Mayo where incumbent Rebekha Sharkie crushed Georgina Downer. Mr Turnbull played down the Longman result, noting it was...
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ASIC chases an alleged international scam linked to FBI probe Sydney Morning Herald 30 July 2018 12:00am Sarah Danckert   The corporate regulator is attempting to shut down an investment scheme that has allegedly siphoned off millions of dollars from unsuspecting consumers and has the hallmarks of a major US fraud case and an FBI investigation. Nearly $18 million of investor money held in accounts linked to Australian company AGM Markets has been frozen by the Federal Court as the Australian Securities and Investments Commission (ASIC) picks its way through a complex web of companies behind local online investing website operators OT Markets and Ozifin. ASIC was granted the freezing orders after alleging AGM Markets, OT Markets and Ozifin, deployed high pressure sales techniques including luring investors to deposit tens of thousands of dollars on the promise of bonus payments. The tactics are similar to those of Israeli online trading group...
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APRA chastised for inadequate super scrutiny The Australian 12:00am July 30, 2018 Michael Roddan   EXCLUSIVE  The Australian Prudential Regulation Authority’s failure to subject “higher risk” superannuation funds to “more intense supervision” was detailed in a damaging official audit two years ago, which found problems with record keeping, inconsistent supervisory practices and tardy review completions. The “effectiveness of superannuation regulators” is set to be probed by Kenneth Hayne’s royal commission, with APRA due to make its first public appearance at the year-long inquiry in hearings that begin next month. APRA is gearing up for a bruising expedition as it faces intensifying criticism from Treasury, the Productivity Commis­sion, financial experts and consumer groups. A 2016 review of APRA’s regulation of super funds by the Australian National Audit Office found only 4 per cent of proposed actions to be taken against funds were recorded in the regulator’s systems, which “limited” its ability to...
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ASIC's 'coercive' approach commoditising audits Australian Financial ReviewJul 29 2018 5:07 PM Misa Han, Edmund Tadros   The corporate regulator's coercive approach has led audit firms to engage in standard "box-checking", which in turn may decrease overall audit quality. The regulator's shift from a collaborative to a coercive approach may be leading to over-reliance on checklists at the risk of taking into account the individual needs of clients, according to the working paper by University of Melbourne's Carlin Dowling, University of Florida's W. Robert Knechel and Monash University's Robyn Moroney. This then results in the commoditisation of audits, which puts pressure on fees and the level of investment in the audit process. The upshot is a vicious cycle of falling audit quality and negative feedback that is eroding the public's perception of the accounting profession and leading to experienced people leaving the audit profession, according to the research. The findings are...
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Save our Super: IOOF calls out rivals on cash plays ·         The Australian 12:00AM July 28, 2018 ·         ANTHONY KLAN   EXCLUSIVE One of the nation’s biggest financial services companies, the listed IOOF, says many of the largest retail superannuation providers have been fleecing the public of $50 million a year — $1 billion a year when accounting for compounding over a worker’s lifetime — by pocketing member returns on “cash” super ­investments. In a report for financial advisers, IOOF describes in detail how many super “wrap” platforms — which are operated by “retail” or for-profit providers, the big four banks, AMP and IOOF for millions of Australians — gouge their own members by paying them returns on risk-free cash ­options that are a fraction of ­actual market rates. IOOF, which operates a $26bn wrap super fund with 340,000 members, has also been paying members returns on cash investments substantially below actual...
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A Black Forest: pain for forgotten victims of a financial disaster Sydney Morning Herald 27 July 2018 Adele Ferguson & Ruth Williams   For almost a decade Dave Gilham has dragged around 20 kilograms of documents in a battered suitcase. The forensically compiled folders hold evidence of inappropriate advice, doctored loan forms and more than one hundred items of correspondence pleading with a bank for mercy. Gilham believes he was the last of the 52,000 investors who sank  money into one of the many disastrous schemes flogged by one-time ASX200 member Great Southern, which  collapsed under more than $600 million in debt in May 2009. Gilham, who was advised to borrow to invest in the schemes, is saddled with debts that have almost tripled in the years since due to interest and penalties. “Some days, I get in a dark space, and think dark thoughts, that’s the headspace I get in,”...
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Negative equity starts to bite for buyers 'flipping' property Australian Financial Review Jul 27 2018 1:13 PM Duncan Hughes   Sydney residential property owners who bought a median-priced home at the peak of the boom could face losses of up to $194,000 – or more than 18 per cent of their purchase price – if they decide to "flip" their asset into a falling market. A Melbourne owner in the same position could lose up to $152,000. That's according to research by online comparison site RateCity, which looks at the potential losses faced by property owners in both cities who bought at the end of 2017 and wanted to sell roughly 18 months later. What this illustrates is growing instances of negative equity – where the market value or sale price is lower than the size of the loan. Falling prices plus the upfront costs of stamp duty and the cost...
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AMP shares hit all-time record low as Wilkins flags $300m compo bill The Australian 12:00am July 28, 2018 Michael Roddan   Acting AMP chief executive Mike Wilkins has launched a defence of vertically integrated wealth managers as he flagged compensation close to $300 million for victims of poor financial advice and a raft of cuts to superannuation fees. Shares in the $9.5 billion company plunged 5.2 per cent on the news yesterday to close at an all-time low of $3.30 apiece. They have now lost more than 40 per cent since before its appearance at the banking royal commission. Shareholders will also have to weather a cut to dividends despite the company’s surplus regulatory capital levels, as Mr Wilkins attempts to steer AMP through the “fairly choppy waters”. AMP’s profit for the first half of the year would feel the impact of $55 million for costs incurred during the royal commission,...
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Honeymoon lending rates could turn sour for banks and borrowers, analysts warn Australian Financial Review Jul 26 2018 4:53 PM Duncan Hughes   Lenders' attempts to attract cashed-up borrowers with honeymoon rates could turn sour for banks and borrowers as yield compression and high reversionary rates squeeze profits and discounts, analysis reveals. More than 10 lenders, including Commonwealth Bank, Westpac Group and Suncorp are increasing honeymoon rates on home loan products by up to 55 basis points for investors and home buyers. The deals are intended to stimulate a flagging market, attract borrowers that meet tough serviceability criteria and win new and existing borrowers from competitors. But analysts warn lenders will face increased repricing pressure for existing borrowers – or what is known as the back book – that could squeeze margins of their lucrative books and potentially lower group profits. "Institutional investors are holding the toes of banking chiefs against...
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NAB to refund $67m in fees charged by wealth arm MLC The Australian 10:53am July 26, 2018 Michael Roddan   National Australia Bank has been forced to refund $67 million to customers who were charged hundreds of dollars in fees for the opportunity to access a financial adviser — even if they didn’t use the adviser’s services. NAB today said it would be refunding customers for the so-called “plan service fee” after the Australian Securities and Investments Commission raised concerns the bank’s wealth arm, MLC, did not tell customers they could opt out of the automatic fee once they left the “business super” product to a “personal super” account after they left their job. More than 300,000 customers will be refunded an average of $220 per person, with the bank repaying people wrongly charged fees back to 2012. That totals more than $67 million. The issue affected customers of MLC’s masterkey...
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ASIC costs more than ever but scalps are hard to come by The Australian 12:00am July 27, 2018 Anthony Klan   The corporate regulator’s criminal conviction rate has plummeted to less than a third of its success rate two decades ago while its cost to taxpayers has almost trebled. Australian Securities & Investments Commission chairman James Shipton yesterday made a case for increased government funding, but reviewing the regulator’s own annual reports shows its performance has declined woefully since it was created out of the old Australian Securities Commission in 1998. The revelations of the regulator’s systemic poor performance came as Mr Shipton promised a “wholesale review” of conflicts of interest in the ­nation’s $2.6 billion super sector, following revelations of widespread gouging. Speaking at a conference run by the Financial Services Council, the key lobby group for “retail” or for-profit super fund managers, Mr Shipton said there had been a...
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ASIC boss reminds financial sector it’s ‘managing other people’s money’ The Australian 1:06pm July 26, 2018 Ben Butler   Corporate watchdog James Shipton has told the superannuation industry to stop exploiting people and immediately clean up its act. In a blunt speech to financial services executives this morning, the chairman of the Australian Securities and Investments Commission said he had heard much rhetoric about addressing the industry’s “trust gap” with the community, but the time for action was now. “Now is the time to move from rhetoric to reality,” Mr Shipton told the Financial Services Council annual summit. “So, ladies and gentlemen, let’s get on with it.” Mr Shipton said the misconduct revealed by the royal commission into financial services, which has been running since February and next month will hold hearings into super, reflected the community’s lack of trust in the scandal-plagued financial services sector. He said many people in...
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Treasury lashes corporate Australia, tells APRA to toughen up Australian Financial Review Jul 26 2018 9:51 PM James Frost   Treasury has delivered a strong critique of financial services companies, saying profits have been propped up by a lack of effective competition that led to a collective dulling of the senses for board members. It also delivers an unflinching view of the banking regulator's preferred method of operation, saying it might be time to drop the co-operative approach in favour of taking a harder line against regulated firms. The remarks were made as part of a response to a series of questions about misconduct by financial services companies posed by the Hayne  banking commission. Commissioner Kenneth Hayne asked for information about the culture of financial firms, the effectiveness of regulators and views about conflicted remuneration. Treasury argues that while no financial system is free of misconduct, the Hayne inquiry has exposed...
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