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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
It’s been normal practice since the 1990’s Libor: Bank of England implicated in secret recording By Andy VerityBBC economics correspondent http://www.bbc.com/news/business-39548313 Watch the report on utube    https://www.youtube.com/watch?v=E_QJ6PcyWyU A secret recording that implicates the Bank of England in Libor rigging has been uncovered by BBC Panorama The 2008 recording adds to evidence the central bank repeatedly pressured commercial banks during the financial crisis to push their Libor rates down. Libor is the rate at which banks lend to each other, setting a benchmark for mortgages and loans for ordinary customers. The Bank of England said Libor was not regulated in the UK at the time. The recording calls into question evidence given in 2012 to the Treasury select committee by former Barclays boss Bob Diamond and Paul Tucker, the man who went on to become the deputy governor of the Bank of England. 'Serious pressure' Libor, the London Interbank Offered Rate, tracks...
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Superannuation for house deposit proposal fuels rift within Federal Government ABC News12 April 2017 Caitlyn Gribbin   A controversial proposal to allow young people to use their superannuation to buy a home is causing growing division in the Federal Government, with one MP labelling the proposal "mad," while a Cabinet minister is urging his colleagues to consider the idea. The proposal, which could see young Australians divert compulsory super payments into a special account, is being discussed in the lead-up to the May budget. The ABC understands Scott Morrison supports the idea, which has also been backed by former prime minister Tony Abbott. Resources Minister Matt Canavan has also thrown his support behind the plan and told the ABC while it is ultimately Mr Morrison's decision, his colleagues should be open-minded and "consider all these elements". "This is, I think, a legitimate idea — it's had support from people like Paul...
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APRA trying to rein in non-banks: Firstmac Australian Financial Review Apr 3 2017 4:54 PM Larry Schlesinger   The "invisible hand of APRA" is trying to rein in mortgage lending by non-banks to property investors, according to the country's biggest non-bank lender, Firstmac. Speaking to The Australian Financial Review after the prudential regulator announced new bank lending limits on interest-only loans last week, Firstmac CEO Kim Cannon and CFO James Austin highlighted APRA's comments on "warehouse facilities" provided by banks to other lenders. These warehouse facilities provide the upfront wholesale funding that allows non-banks like Firstmac, Liberty Financial, Pepper and some of the smaller banks to write home loans, which they then securitise and sell to overseas investors. Alongside a suite of new macro-prudential measures aimed at reinforcing sound lending practices, APRA said it was "monitoring the growth in warehouse facilities provided by ADIs to other lenders". "APRA would be concerned...
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The Big Guys Work For The Carlyle Group By Melanie Warner Fortune.com 3-11-2 http://rense.com/general21/car.htm ...Arthur Levitt, who just left the SEC, also work for Carlyle https://theconversation.com/blockchain-a-regulatory-unicorn-52673   Blockchain – A Regulatory Unicorn? January 2, 2016   Never one to let a bandwagon pass by, Greg Medcraft, the Chairman of the Australian Securities and Investments Commission (ASIC), has enthusiastically hopped onto the Blockchain wagon. Mr Medcraft has seen the light and recently proclaimed “Blockchain is an important technology development that has the potential to change fundamentally the world’s capital markets.”  This is a hugely extravagant claim for what is a basic, if very elegant, piece of computer code. And Mr Medcraft is not alone. None other than Arthur Levitt, the esteemed ex-Chairman of the Securities and Exchange Commission (SEC), has also been converted. And banks, such as Commbank, have eagerly embraced this “next big thing”.   https://en.wikipedia.org/wiki/Arthur_Levitt    Arthur Levitt Jr. (born February 3,...
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Housing curbs reflect genuine concerns, says ABA's Anna Bligh Australian Financial Review Apr 3 2017 11:00 PM James Eyers   New Australian Bankers' Association chief executive Anna Bligh says it won't be her Labor background that helps the banks fend off a royal commission but actions that convince customers they are valued as much as shareholders. The former Queensland premier has also backed moves by financial regulators targeting interest-only loans, saying they have presumably acted on "genuine and well-evidenced concerns". Just a few hours into her first day on Monday as boss of the banking industry association, Ms Bligh warned that political pressure on the sector isn't going to abate any time soon because it reflects real customer anger that has resulted in an "erosion of trust" in the industry. "I think the public want to see action and I know the government wants to see more action from banks," she...
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Mortgage crackdown to crimp borrowing capacity Australian Financial Review Apr 4 2017 11:00 PM Jonathan Shapiro, James Frost   A mortgage lending crackdown could cut in half the amount a typical household can borrow once higher living expenses and greater interest rate buffers are applied. A typical couple with an existing mortgage would see borrowing capacity reduced from $450,000 to about $235,000, according to Fitch Ratings, which presented a worked example to clients in 2016. The analysis was in anticipation of tougher lending standards that would require lenders to assume higher interest rates and living expenses when writing mortgages. It shows that tougher enforcement of responsible lending has the potential to take credit out of the system by dampening the borrowing capacity of households keen to get a foothold into a rising market. It follows steps announced by the Australian Securities and Investments Commission to up its surveillance of lenders and...
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CBA to mortgage brokers: Beat rivals by churning Australian Financial Review Mar 26 2017 5:17 PM Duncan Hughes   Commonwealth Bank of Australia is encouraging brokers to churn mortgages rather than lose borrowers to competitors who are offering hot incentives to switch lenders, analysis of offers reveals. It comes as new strategies from major and smaller lenders rapidly emerge in response to changing regulatory, funding and marketing pressures, according to bankers and market analysts. CBA has written to brokers with clients concerned about rising rates to consider seven alternative strategies involving its existing product range. "With the introduction of new reference [interest] rates for investment home loans and the change to rates for interest-only investment home loans, you may see an increase in customers wanting to switch product types or change their repayment type," the bank stated in a memo to mortgage brokers. The memo went on to outline alternative loan...
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Do-Nothing Malcolm under pressure over negative gearing flip-flop By Unconventional Economist in Australian Property at 12:12 am on April 10, 2017 | 1 comment By Leith van Onselen   https://www.macrobusiness.com.au/2017/04/nothing-malcolm-pressure-negative-gearing-backdown/   Last week, the ABC released details of a Freedom of Information (FOI) request, which revealed that the Turnbull Government performed a back-flip on reforms to negative gearing and the capital gains tax (CGT) discount in the lead-up to last year’s Federal Budget: Federal Cabinet formally examined the impact of tax breaks on Australia’s booming housing market in early 2016 but decided not to act, an ABC investigation has revealed. …instead of making changes last year, the Coalition embarked on a blistering campaign against Labor’s plans to curb property tax concessions. That is despite the issue being considered at the highest levels of the Turnbull Government as early as February 2016. This followed details from my cousin’s book, which revealed that...
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Morrison flags sweeteners for super to fix affordability crisis Australian Financial Review Apr 10 2017 12:01 AM Jacob Greber   Super funds and other large pools of capital are being challenged to help fix the nation's worsening housing affordability crisis, with Treasurer Scott Morrison hinting at plans that would provide fresh incentives for private investment in homes for low-income Australians. In a major speech on Monday that slams as an abject failure the current national affordable housing agreement with the states – which has cost $9 billion over eight years and yielded 16,000 fewer public housing dwellings – Mr Morrison will make the case for a significant policy rethink. "We don't need to spend more, and it's not necessarily about spending less, provided we spend it better," Mr Morrison will say, pointing out that public housing waiting lists have risen from 177,700 to 187,000 in that time. "You simply despair. "This...
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Liberals blaming everyone but themselves.  They were supposed to control these Bankers.  Banking Laws are there, but bad Government policies, self reg thought bubbles and non-enforcement of law are the reasons we have to suffer a rotten to the core banking and finance sector.    Scott Morrison, tries to blame banks, voters and himself 8 April 2017 Alan Austin https://independentaustralia.net/politics/politics-display/morrison-tries-to-deceive-the-bankers-the-voters-and-himself,10188   Australian Treasurer Scott Morrison is distorting the record to make an appalling set of outcomes look acceptable. His speech on Thursday to the AFR Banking and Wealth Summit was riddled with evasions, half-truths and even a few falsehoods. But who was he trying to convince? Job losses “In last year's Budget, I said we needed to focus on jobs and growth ... Since last year's budget, we've made good progress.” Untrue. There has been no progress this financial year. Since June 2016: People unemployed have increased by 16,200 to more than 748,000. Job participation...
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Australia: Following Canada into a Financial Black Hole By Unconventional Economist in Global Housing at 10:20 am on November 10, 2010 | 18 comments https://www.macrobusiness.com.au/2010/11/australia-following-canada-into-a-financial-black-hole/ No doubt many readers have heard that the Australian Government is looking to follow Canada’s lead and implement a Government guarantee of residential mortgage-backed securities (RMBS), in order to foster greater competition in mortgage lending and reduce the power of the big four banks. Following on from David Llewellyn-Smith’s critique of this proposal, I thought it timely to provide an examination of the Canadian Government’s guarantee of its RMBS market, and show readers why adopting a similar approach in Australia is a terrible idea. In doing so, I have borrowed heavily from Canadian financial blogger, Ben Rabidoux, as well as my previous article on the Canadian Housing Bubble. Canadian Housing Mortgage Corporation (CMHC): the Great Enabler The government-owned CMHC is Canada’s national housing agency. CMHC works...
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NAB, Westpac to add web warnings on interest-only loans Australian Financial Review Apr 7 2017 11:00 PM Geoff Winestock   Westpac and NAB say they are updating their online calculators of mortgage repayments to warn borrowers they could face a huge hike in monthly repayments after five or 10 years on an interest-only loan. At current mortgage rates for investors of about 5.5 per cent, repayments for a $700,000 loan will jump from $3209 a month to $4299 at the end of the standard five-year interest-only period, a rise of about a third. But if prevailing interest rates rise by just two percentage points to 7.5 per cent, repayments will jump to $5173 a month, a jump of about 61 per cent. The increase is far greater than for the same principle and interest loan which starts higher. Those figures come from the front page of the CBA website but ANZ,...
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Developers, non-banks behind property bubble The Australian 12:00am April 8, 2017 Alan Kohler   The regulators are cracking down on bank lending, but they may be missing the mark. A property financier — not a bank — told me this week that developers don’t argue about interest rates these days; the only negotiations are about the loan to value ratio and how quickly the money can be approved. The interest rate this guy charges is 13 per cent, take it or leave it. Others are the same. They always take it. The LVRs average 60-65 per cent, although the numerator (the value) can be a bit wobbly before the project starts, and most of the non-banks can approve the funds pretty quickly: they don’t usually have boring credit committees to worry about. There has been a bank credit squeeze for residential development for 18 months, ever since the Australian Prudential Regulation...
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If the housing bubble bursts economy will come tumbling down The Australian 12:00am April 8, 2017 Adam Creighton If Australia’s debt-fuelled housing boom proves to be a bubble and pops, it will be one of the biggest and most devastating crashes. No major country’s fortunes are so entwined with property as Australia’s. It also would be entirely self-inflicted, an inevitable reckoning from many years of perverse government regulations that induce banks to issue excessive quantities of cheap mortgages. More than a fifth of the country’s economic growth during the past four years, excluding resource exports, has been home building, spurred on by rising house prices, strong population growth and ultra-low interest rates, on which almost 600,000 jobs depend. And rising real estate prices have underpinned the confidence that has fuelled strong household consumption growth. Whether this turns out to be the economy’s Achilles heel is hotly debated — indeed, Australians’ confidence...
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Housing correction 'won't be orderly' Australian Financial ReviewApr 7 2017 9:00 PM Larry Schlesinger   Ask respected property analyst Martin North what form the coming downturn in the housing market might take and "orderly" is not the description he uses. Instead North anticipates a much more significant downturn in the investor-driven, debt-laden markets like Sydney and Melbourne. "Orderly" is how S&P Global Ratings director Sharad Jain described the likely unwinding of the overheated housing market, where annualised house price growth is running close to 20 per cent in Sydney and Melbourne. "It could unwind in an orderly manner as we are seeing in parts of Western Australia and Queensland," Mr Jain said at the Australian Financial Review Banking and Wealth Summit this week. But according to Mr North, whose says his view on the housing market has turned increasingly gloomier, Australia could be at the very early stages of where the US housing market...
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Valex is risk management system used by lender for credit enhancement for property valuations to go into the black box to be securitised....... Tough if you have a unique property and the property data is wrong....hence the warning by APRA on 23 May 2005 of the risk to individual properties not entire postcode areas....... At the exit if you go into default....you have to be 3 months behind in your payments, because on Day 91, the bank cashes in on all of its “side bets” (credit default swaps, default insurance payments, title insurance payments, etc.).    Potentially flawed data used by banks and lenders bump up house prices GRANT ROBERTSON and TARA PERKINS The Globe and Mail Published Wednesday, Oct. 10, 2012 http://www.theglobeandmail.com/report-on-business/economy/housing/potentially-flawed-data-used-by-banks-and-lenders-bump-up-house-prices/article4603237/  Flaws in a national databank that helps determine the value of houses across Canada have helped fuel inflation in home prices, putting mortgage lenders and borrowers at greater...
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WHY THE GREENS BILL WILL NOT GET TO THE TRUTH and WHY WE NEED A ROYAL COMMISSION INTO THE BANKS   Australian Bankers and regulators are keeping a dark dirty secret:  a massive SUB PRIME CATASTROPHE: 90% of Mortgage Loans have been written according to a cross-section of Sellers. Victims did not know these loans were INTEREST ONLY. That is the essence of this cleverly concealed plan by Bankers. The negative gearing factor is low as most people caught in this scam, earned less than $50,000 per annum per household and many were pensioners who owned their own home and had NO DEBT. Banks held 1000 strong seminars to tell sellers to hit the TARGET MARKET: People aged 50 - 90 who owned their own home and had no debt. Their tax was low to negligible so the neg gearing factor was never really an advantage. Even young people were on...
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Getting serious now:  Senators Warren, McCain, Cantwell, and King Introduce New Glass-Steagall Act   6 April 2017 http://wolfstreet.com/2017/04/06/senators-warren-mccain-cantwell-king-introduce-new-glass-steagall-act/   Sometimes Senators can move fast. Earlier today, I reported on a confidential meeting yesterday where White House economic advisor and ex-Goldman executive Gary Cohn had dropped a bombshell by speaking in support of reverting to a version of the Glass-Steagall Act. It had once separated banks from all other financial activities, but was repealed in 1999 – with terrible consequences that ended in the Financial Crisis. Read… Ex-Goldman Trump Advisor Drops Glass-Steagall Bombshell – Is there Hope? Now Senator Elizabeth Warren (D-Massachusetts) announced that she and three other senators – John McCain (R-Arizona), Maria Cantwell (D-Washington), and Angus King (I-Maine) – would re-introduce “the 21st Century Glass-Steagall Act.” Senator Warren said in the statement that it would protect American taxpayers, help community banks and credit unions compete, and decrease the likelihood of...
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The data explains Australia’s addiction to interest-only loans which has reached endemic proportions, both in terms of stock and flows (approvals). The two primary reasons why IO loans are attractive to investors is that 1) payment of interest but not principal means a larger loan can be secured against a given household income; and 2) interest, not principal, is tax deductible.   APRA has recently tightened ADIs’ ability to issue IO loans, as they assist with inflating residential land prices. In other words, they facilitate what amounts to Ponzi lending. On this basis, regulators ought to ensure existing IO loans be converted to P&I and ban future issuance altogether. An understanding of Hyman Minsky’s definition of an asset bubble would assist to confirm that IO loans have no place in the mortgage market.   The proportion of IO loan approvals relative to total approvals reached a stratospheric 46% in 2015, before...
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Beware of the Shadow Ledgers   Look at this timeline and note the similarity...S Shadow Inventory Timeline September 2011 - "Home Sales 7% Higher Than Last Year." Banks started working through the foreclosure pipeline, boosting home sales but lowering prices. July 2011 - "One Million Foreclosures Pushed Out to 2012." Foreclosures continue to back up, thanks to delays in bank processing. It took 318 days for banks to foreclose in the second quarter, 41 days longer than a year ago. May 2011 - "Home Prices Keep Falling." Sixteen million homeowners (28%) were upside-down in their mortgages, adding to the shadow inventory and causing home prices to fall 1% a month. December 2010 - "Foreclosure Probe Adding to Shadow Inventory." The foreclosure rate was down 24% from the prior year. That should have been great news, but wasn't. It was because banks were slowing down their foreclosure process in response to a...
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EX-RBA boss rubbishes company tax cuts By Unconventional Economist in Australian budget at 12:12 am on April 7, 2017 | 1 comment By Leith van Onselen   https://www.macrobusiness.com.au/2017/04/ex-rba-boss-rubishes-company-tax-cuts/   Do-Nothing Malcolm gave a keynote address last night at The Sydney Institute’s 2017 Anniversary Dinner, whereby he pushed the case for further company tax cuts, claiming that the benefits will flow to workers [my emphasis]: Most of the burden of high company taxes is borne by workers because high taxes discourage firms from expanding, from hiring and from paying better wages… Company tax, as I have noted is ultimately a tax on workers, a tax on jobs, a tax on wages. Reducing company tax means businesses can invest more, employ more staff, and pay them more. An uncompetitive business environment can be the difference between firms investing in Australia or choosing to invest elsewhere. If we don’t act now we will be...
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Read the comments....... Ex-Goldman Trump Advisor Drops Glass-Steagall Bombshell 6 April 2017 http://wolfstreet.com/2017/04/06/chances-of-new-glass-steagall-act/ Is there hope? According to “people with direct knowledge of the matter,” cited by Bloomberg, White House economic adviser and one of the ex-Goldman Sachs executives in the Administration, Gary Cohn, dropped a bombshell at a meeting on Capitol Hill yesterday. The meeting was arranged by Senate Banking Committee Chairman Mike Crapo of Idaho. Lawmakers and their staffs from both parties participated in the discussion that ranged from tax reform to financial regulation. Cohn said he generally is in favor of splitting commercial banks from everything else, in a return of sorts to the days of the Glass-Steagall Act. Bloomberg: Cohn’s remarks were prompted by a question from Senator Elizabeth Warren, one of the finance industry’s most relentless critics, said the people who asked not to be named because Cohn’s meeting with Senate Banking Committee members was private....
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What about all those gold rolex watches and planes bought by property developers? Bob Day, Rod Culleton could be forced to repay their Senate salaries, allowances Adam Gartrell 7 April 2017 http://www.watoday.com.au/federal-politics/political-news/bob-day-rod-culleton-could-be-forced-to-repay-their-senate-salaries-allowances-20170406-gveykg.html The Turnbull government is considering pursuing dumped senators Bob Day and Rod Culleton to repay hundreds of thousands of dollars to taxpayers. Senior government figures are discussing whether to go after the pair for up to $250,000 paid to them in parliamentary salaries and expenses last year. The High Court has ruled Bob Day's election invalid so who will replace him? The High Court has now ruled both men were invalidly elected - Mr Culleton because he was bankrupt and Mr Day because he had a constitutionally prohibited financial interest in the Commonwealth because of a complex office leasing arrangement. Mr Culleton was paid more than $100,000 in salary and superannuation between the July 2 election and the court's...
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Negative gearing is only part of the problem...INTEREST ONLY LOW DOCS are the sub prime generator of selling homes to people who cannot afford to buy. Steve Keen stated property was 40% overvalued when the GFC hit and it was for those who had low doc loans approved and had to sell.. APRA’s guide was banks only had to insure 40% of their loan portfolios. It’s just going to mean more recycling of properties which is exactly how a PONZI works!   7.30 Report does the investor bubble By Unconventional Economist in Australian Property at 12:27 pm on April 6, 2017 | 52 comments   By Leith van Onselen https://www.macrobusiness.com.au/2017/04/7-30-report-investor-bubble/   ABC’s 7.30 Report last night ran a segment on how first home buyers (FHBs) are becoming casualties of Australia’s specufestor bubble. The segment features a property developer, Pat Singh, basically telling FHBs to  do whatever they can to enter the...
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read the comments...... David Murray warns of 1890s housing crash depression By Houses and Holes in Australian Economy, Australian Property, MB fund at 4:51 am on April 5, 2017 | 167 comments https://www.macrobusiness.com.au/2017/04/david-murray-warns-of-1890s-housing-crash-depression/ God bless David Murray. Somehow this goes virtually unreported today: The chairman of the government’s Financial System Inquiry, former Future Fund chairman David Murray, yesterday sounded a further alarm on the housing boom, saying a crisis on the scale of the 1890s great property collapse could not be ruled out. “What people should do is look at the 1890s, which was caused by a housing land boom,” he told The Australian. “To say it won’t happen and simply ignore it is wrong.” Half of the nation’s banks closed their doors following the 1890s crash. “Many people say a crisis has a low probability of ­occurrence, but the problem with that view is that whatever the probability, the severity...
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