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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
Property Council of Australia urges RBA, APRA to let banks lend The Australian 12:00am May 16, 2019 Ben Wilmot   EXCLUSIVE  Property chiefs have appealed directly to the Reserve Bank and the Australian Prudential Regulation Authority during a private meeting for a loosening of the strict lending policies imposed on banks, as a credit squeeze starts to bite key parts of the industry. In a meeting with the nation’s top financial regulators this week, the property industry chiefs called on banks to be given the headroom to start lending again, according to people present at the briefing. The move comes in the wake of a collapse in a housing approvals to a near five-year low and puts the real estate industry on the same course as bank chiefs who have called for a relaxation of loan buffer repayment rules that have crimped lending to home buyers. Their input — delivered by...
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Australia to pay multi-million-dollar penalties to French submarine builders if deal collapses ABC News 15 May 2019 Andrew Greene   Australia will be forced to make multi-million-dollar compensation payments to France if the future submarine program is terminated, according to leaked figures obtained by the ABC. The "break payments" are outlined in the confidential Strategic Partnering Agreement (SPA) that guides the $50 billion project, which was signed in February by France and Australia's defence ministers. In 2016, former prime minister Malcolm Turnbull announced Naval Group (then known as DCNS) had beaten rival bids from Germany and Japan to build 12 new submarines for the Royal Australian Navy over the next three decades. The ABC has now obtained a section of the confidential SPA document, prepared last year, detailing at which point certain "break payments" will be invoked if Australia decides to walk away from the massive contract. Defence industry expert Andrew...
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APRA capital rules ‘stifle’ lending, says COBA The Australian 12:00am May 15, 2019 Richard Gluyas   The prudential regulator’s capital rules for home loans discriminate against small banking institutions and put them at a major competitive disadvantage, according to a report commissioned by the $116 billion customer-owned banking sector. The Pegasus Economics report, which concludes that the Financial System Inquiry’s 2014 warning about risks to competition in the banking sector have come to fruition, comes ahead of the Australian Prudential Regulation Authority’s release of a draft revised capital framework for the industry. Pegasus says the framework will have a “profound” impact on the level of competition in banking, particularly in the largest lending segment of residential mortgages. Customer Owned Banking Association chief executive Michael Lawrence said yesterday that there was an acute need for a competitive and efficient home lending market. “Following the financial services royal commission there’s a renewed focus...
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'Mr Dickens, what's your income and what are your expenses?' Australian Financial Review May 14, 2019 5.14pm Misa Han   Westpac has delivered a scathing attack on the corporate regulator, saying its "19th century approach" of fixating on the formula of income minus expenses does not stack up in the 21st century environment. ASIC and Westpac are fighting in the Federal Court over whether the bank lent irresponsibly because it relied solely on a conservative benchmark in estimating household expenses. In his closing submission on Tuesday, Westpac's barrister, Jeremy Kirk, SC, likened ASIC's approach to acting like "19th century accountants keeping a book" as the 19th century author Charles Dickens walks in. Mr Kirk mockingly said: "Mr Dickens, what's your income and what are your expenses?" Westpac's defence is that its automated decision making system applied more than 200 rules and if a home loan application failed any of the rules,...
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'A throwaway city of junk buildings': Leading architect slams NSW government over heritage Sydney Morning Herald May 11, 2019 1.19pm Andrew Taylor   Sydney is in danger of becoming “a throwaway city of junk buildings” built on the cheap to be knocked down every 30 years, a leading architect and City of Sydney councillor has warned. Philip Thalis also criticised the NSW government's sell-off of public buildings, which he said constituted "a theft of public assets", and the destruction of heritage buildings and streetscapes caused by projects such as the Sydney Metro, Westconnex and roadworks. "Public Sydney risks becoming privatised Sydney," said Cr Thalis, speaking at the National Trust Heritage Awards 2019 on Friday. "We know that regardless of political persuasion, privatisation is deeply unpopular with the majority of citizens, and constitutes a theft of public assets that would otherwise have been available to future generations." Cr Thalis pointed to the...
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Mortgage-backed securities defy homes slump The Australian 12:00am May 15, 2019 Joyce Moullakis   EXCLUSIVE  A housing market slump and emerging pockets of borrower stress this year have not deterred banks and other lenders from the securitisation market or their plans for future activity. That is the main finding of The 2019 Australian Securitisation Issuer Report that conducted two stages of research across 55 issuers of the securities. The report is being jointly released by Perpetual and The Australian Securitisation Forum (ASF), which counts the big four banks, AMP and Credit Union Australia among its members. Securitisation is an important funding source for banks and other lenders as they can package mortgages and other loans and sell them in tranches as tradeable debt securities. The report found that despite a marked slowdown in housing credit growth, 46 per cent of respondents said they would be likely to increase their securitisation issuance...
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Property Council PM’s dirty and dangerous FHB brain fart MacroBusiness 12:30 pm on May 14, 2019 David Llewellyn-Smith   Scummo revealed at Domain: A $500 million plan to help first-home buyers into the market did not go through cabinet and has not been modelled for its impact on property prices, as experts warn the policy will struggle to meet its objectives. The first some members of cabinet heard about the plan, which will see the government effectively guarantee a portion of loans taken out by first time buyers, was when Prime Minister Scott Morrison announced it during the Coalition’s election campaign launch on Sunday. More at Banking Day: Banking Day was told by several industry sources on Monday that the policy was slapped together by the coalition in the last week after the Housing Industry Association floated the idea to the caretaker government. The policy, which has triggered a stream of...
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Banking system the elephant in the room at this election The Mercury May 15, 2019 12:50am Ray Williams Ray Williams is a Citizens Electoral Council (CEC) candidate for the Senate. He was in banking for 22 years and for 30 years has been in business at New Norfolk including as owner of New Norfolk Gun Shop and Williams Outdoors. He has been a Derwent Valley councillor and a national director of hardware group Mitre 10.   The future of Australia’s banking system is the elephant in the room in the federal election campaign. The major parties ignore the reality of a new global financial crisis, either through negligence or wilful intent. What’s telling is their collusion to ram through a “bail-in” policy to protect the banks, even using people’s bank deposits if necessary — before the Banking Royal Commission was convened — which indicates they are well aware of an impending...
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CBA’s result does little to lift banking gloom The Australian 12:00am May 14, 2019 Richard Gluyas   As the curtain falls on the major bank profit-reporting season, there’s very little — if anything — for investors to celebrate. Even with last year’s hike in variable mortgage rates, every line of revenue is under pressure. Remediation and compliance costs continue to mushroom, and after eight years of the most benign credit conditions imaginable, the credit cycle has ominously started to turn. Commonwealth Bank’s third-quarter trading update failed to pierce the gloom. Cash profit for the three months to March was $1.7 billion, down 9 per cent or 28 per cent after notable items. The 4 per cent decline in group revenue reflected a 10 per cent slump in non-interest income after the adoption of more customer-friendly fee structures ($30 million cost), an unfavourable derivative valuation adjustment ($50m) and adverse weather events ($30m)....
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Westpac ’ignored’ credit checks on loans, ASIC tells court The Australian 9:04pm May 13, 2019 Joyce Moullakis   Westpac breached the law by relying on benchmark industry expenditure measures to assess potential mortgage customers rather than using them as a “cross-checking tool”, the corporate regulator told Federal Court on Monday. The Australian Securities and Investments Commission was making its closing statement before judge Nye Perram in an action against Westpac. It alleges the bank failed to properly verify the actual financial position of borrowers 261,987 times. Jeremy Clarke SC, for ASIC, said Westpac in many cases “just discarded” information on customer expenses and reverted to a formulaic Household Expenditure Method. “The HEM itself is not a reliable estimate of the particular consumer’s financial expenses,” he said. “We are saying they (Westpac) haven’t done the very first step” of considering the customer’s financial position. But Justice Perram at one stage sounded unconvinced...
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Bank compensation costs could hit $10b Australian Financial Review May 14, 2019 12.07am James Eyers   Commonwealth Bank of Australia's surprise $714 million in new customer compensation costs – taking its bill so far to $2.17 billion – shows the banking and wealth sector is far from settling its massive task of repaying customers. The price Australia's biggest banks must pay for years of misconduct in compensation to customers and increased spending on risk and compliance could hit $10 billion, according to veteran banking analyst Brett Le Mesurier. His estimate covers the big four banks and AMP and includes the costs of the Hayne royal commission and regulatory fines. One of the most glaring examples of these scandals – laid bare by the royal commission – was the practice of charging advice fees without providing services. At a briefing after a disappointing third-quarter trading result sent the CBA share price falling,...
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First-home buyer plans a poor joke The Australian 12:37pm May 13, 2019 John Durie   The sheer hypocrisy of politicians is a wonder to see, with Prime Minister Scott “Cry Me a River” Morrison’s last-minute $500 million scheme to encourage first-home buyers a case in point. Two years ago, when he unveiled his $6.2 billion bank tax on budget night, Morrison was asked about the banks’ reaction and he responded: “Cry Me a River.” He has kicked the bank can down the road consistently ever since, being bettered only by the ALP, which has stupidly and mindlessly agreed to provide the same deposit backing as the Coalition. On the one hand the politicians are doing their very best to make it harder for the banks to lend money to anyone, let alone first-home buyers. On the other, in the final days of an election, they think it is a good idea...
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ScoMo's loan scheme nationalises bank of Mum and Dad Australian Financial Review May 13, 2019 1.00pm Satya Marar Satya Marar is the Director of Policy at the Australian Taxpayers’ Alliance.   It’s a week before the federal election and both major parties now endorse a housing deposit scheme where the government will guarantee 75 per cent of the standard 20 per cent deposit on home loans required in lieu of paying Lender’s Mortgage Insurance. The policy helps prospective home buyers enter the market as they will only need to save 5 per cent of the value of the property since the government (read: taxpayers) has guaranteed to pay the remainder. Although noble in intent, such heavy-handed intervention could have disastrous and costly results. Lenders generally demand a 20 per cent deposit from borrowers because it recognises the credit risk of financing a greater portion of the loan, and insulates the lender...
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RBA running out of options, and the banks aren’t helping The Australian 12:00am May 13, 2019 Michael Roddan   Not content with a record run of inaction on official interest rates now stretching to 30 months, the Reserve Bank last week made an unusual plea to the banking sector, asking the lenders to do the central bank’s job for it. With the economy slowing — there was next to no growth over the second half of 2018 and all indicators are pointing towards a tougher first quarter — discussion has rightly turned to how the RBA plans to counteract stalled household spending and slowing credit growth. The cash rate has been on hold at a record low of 1.5 per cent since 2016 and, amid the gloomy economic outlook, financial markets are now pricing in two cuts by the end of the year — a projection the RBA acknowledged it has...
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Bank funding costs hit 'record lows': Reserve Bank Australian Financial Review May 12, 2019 4.25pm Jonathan Shapiro   The troubling spike in short-term bank funding costs has now completely reversed while the decline in Australian interest rates means long-term bank borrowing costs are now at "record low" levels, according to the Reserve Bank. The significant improvement in funding costs, which had prompted the banks to increase standard variable mortgage rates last year, should provide a boost to the bank margins, but also intensify calls for them to pass on the savings to customers. In its quarterly statement of monetary policy, the central bank noted that the spread between the three-month bank bill swap rate and the overnight cash rate had contracted from around 60 basis points at the start of the year, to about 20 basis points, its lowest level since 2017. That has provided a reprieve for the banks whose...
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Scott Morrison expressed interest in overhauling negative gearing, according to official documents ABC News13 May 2019 Dan Conifer   EXCLUSIVE  Prime Minister Scott Morrison expressed interest in overhauling housing tax concessions, including negative gearing, just days into his time as treasurer, according to official documents. The Morrison Government's opposition to the ALP's housing tax plan is central to its re-election pitch. But Mr Morrison did not appear to oppose changes to housing taxation early in his time as treasurer, according to "sensitive" government documents. Obtained under freedom of information laws, a senior NSW Treasury official in October 2015 wrote: "The Commonwealth appears more willing to consider broader tax reform. "The Commonwealth Treasurer has indicated that all options need to be considered, including superannuation, capital gains tax and negative gearing." Mr Morrison in February 2016 said there were "excesses" in negative gearing and that the government was considering changes. That same month,...
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Home loan scheme could increase negative equity risk, economists say Sydney Morning Herald May 13, 2019 12.00am Clancy Yeates   Both major parties' pledges to guarantee thousands of mortgages with deposits of only 5 per cent could result in more people ending up with a loan that is bigger than their house is worth, if the house price slump continues, economists say. After Prime Minister Scott Morrison on Sunday announced the scheme to lift housing affordability, market economists said the idea brought with it the risk of borrowers finding themselves in negative equity, where the outstanding balance on a mortgage is greater than the house's value. After banks cut back on low-deposit home loans in recent years, Mr Morrison on Sunday unveiled a new scheme that he pledged would allow buyers to overcome the difficulties of saving for a 20 per cent deposit, which is what is generally required by banks...
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PM betting the house on $500m first-home plan The Australian 12:00am May 13, 2019 Michael Roddan   Scott Morrison has unveiled a $500 million housing affordability plan in a pre-election assault on Labor’s negative gearing and housing policies, pledging to underwrite home loan deposits for first-home buyers struggling to hit a 20 per cent target imposed by the banks. Under pressure to match the Coalition pitch to younger voters, Bill Shorten yesterday agreed to support the first-home deposit scheme, which was backed by the Property Council of Australia and Master Builders Australia. The First Home Loan Deposit Scheme will be available from the start of next year to first-home buyers who earn up to $125,000 — or $200,000 for couples — who have amassed a 5 per cent deposit. The Prime Minister’s proposal would fill the loan gap usually funded through private lenders’ mortgage insurance, which protects the bank from a defaulting customer...
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Australian property still world's most expensive despite sharp falls Australian Financial Review May 10, 2019 8.50am Duncan Hughes   Sydney and Melbourne’s median property prices are still about 60 per cent less affordable than booming Seattle and New York, despite nearly 18 months of sharp price falls in Australian markets, according to global investment bank Morgan Stanley. Australia’s two most populous cities continue to be in the world’s top five most expensive. Hong Kong retains the top spot, where The Peak recently reclaimed the title as the planet’s most expensive land. But a nine-bedroom 13th century chateau set in more than 7000 square metres of parkland in eastern France is cheaper than a two-bedroom apartment in Sydney, according to Domain. The cost of borrowing money to buy a property is also much more expensivein Australia than other global property hotspots such as America, Canada and Hong Kong, despite the cash rate...
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The case that could reshape banking Australian Financial Review May 10, 2019 3.41pm James Eyers, Misa Han   It's a case that will define one of the most fundamental jobs of a bank – working out whether to lend to a customer. On one side is the Australian Securities and Investments Commission. The regulator has taken Westpac Banking Corp to task over allegedly breaking responsible lending laws 261,987 times. It is a headline-grabbing figure for a regulator hell bent on pursuing a "why not litigate" strategy, after its own reputation took a beating during the Hayne royal commission. In ASIC's view, Westpac acted egregiously by using a "frugal" benchmark to estimate potential borrowers' living expenses – a figure which, in some cases, mimics the expenses of a family living close to the poverty line. On the other side, Westpac remains defiant. It insists it acted in good faith when assessing the...
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The coming of Aussie quantitative easing Australian Financial ReviewMay 10, 2019 10.13am Christopher Joye The author is a portfolio manager with Coolabah Capital Investments, which invests in fixed-income securities including those discussed by this column.   The Reserve Bank of Australia’s governor Phil Lowe passed our controversial intelligence test with flying colours by surprising many of the best forecasters in the business with his sensible decision to wait on rates. And contrary to claims at the time, this has no ramifications for the RBA’s inflation targeting regime—whether it goes in June, July or August does not make a jot of difference to the ensuing economic outcomes. While I personally felt Lowe would be mad to go in May, immediately prior to the meeting I was torn on what he would do in practice. Based on both the RBA’s past behaviours (where it has not hesitated to pull the trigger close to...
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Life after Libor: be prepared or risk financial meltdown, ASIC warns The Australian 12:00am May 10, 2019 Richard Gluyas   ASIC has warned chief executives of a possible financial meltdown unless they adequately prepare for the likely demise of the global benchmark interest rate Libor in 2021. In an alert reminiscent of the Y2K information technology scare that ultimately failed to ­materialise, the watchdog has written to CEOs of the nation’s top financial institutions to seek an assurance that they understand the risks associated with a global move to new benchmarks that were less vulnerable to ­manipulation. “The transition away from Libor may have significant implications for the entities’ risk management, operational processes and information technology infrastructure,” the letter said. “Insufficient preparations for the transition could have a negative impact on the entities’ business, clients and the markets in which they operate.” The letter, which was strongly supported by the Reserve...
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Construction jobs casualty of property market downturn The Australian 12:00am May 8, 2019 Turi Condon   The housing downturn is flowing through to job losses in the construction sector with employment in the industry falling at its steepest rate in nearly six years, according to the Australian Industry Group/Housing Industry Association construction index. Activity in the construction industry weakened further in April with the index falling 3 points to 42.6 for the month. Readings below 50 show falling activity. Employment fell 6.9 points to 39.2. “The housing and apartment sectors both remain firmly in negative territory and commercial construction recorded a ninth month of contraction,” Ai Group head of policy Peter Burn said. Weakness in the sectors was partially offset by an expansion in engineering construction on the back of large-scale publicly funded infrastructure projects. But Dr Burn said there was little sign of any near-term improvement. “There are now strong...
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Big banks on war path over NZ central bank’s bid to raise minimum capital The Australian 12:00am May 9, 2019 Richard Gluyas   The nation’s big four banks are on a collision course with the Reserve Bank of New Zealand, and judging by the hostile rhetoric there’s no sign of the combatants taking a backward step. Final submissions are due by May 17 on the RBNZ’s proposal to increase minimum capital requirements by $13 billion-$16bn for the three banks that reported half-year results over the last week — ANZ, National Australia Bank and Westpac. The central bank is due to make a final decision by September. The stakes are enormous given the big four earn 15 per cent of their combined profit, or $4.4bn, in NZ — a market where they control 88 per cent of industry assets. The combative tone adopted by the banks, set by ANZ chief executive Shayne...
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Westpac ‘outlier’ on loan approvals, ASIC case told The Australian May 9, 2019 Joyce Moullakis   Westpac has conceded it was an outlier among its rivals in the way it assessed a borrowers’ ability to repay interest-only loans before changing its policy in mid-2015. On the third day of a Federal Court battle against the Australian Securities & Investments Commission, the regulator’s lawyers peppered Westpac managers with questions seeking to establish that the bank didn’t adhere to responsible lending obligations. Jeremy Clarke SC, for ASIC, argued that from 2011 to 2015 Westpac didn’t make an adequate assessment of customers’ ability to repay mortgages when they changed from interest-only to principal and interest. Westpac’s Robert Love, head of credit risk optimisation, admitted the bank had been an outlier in how it assessed those loans but noted the process had changed following an internal review. “We saw this change as an enhancement to...
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