Clik here to view.
Industry groups target predatory lending
4 September 2007
Finance industry associations and legal groups have banded together to fight the proliferation of predatory lending, which they say is causing an increase in home repossessions. Also known as "equity skimming", predatory lending occurs at the bottom end of the home loans market. It involves the deliberate targeting of borrowers who do not have the ability to pay but have equity in their homes. "These are lenders who are really sub-sub-prime," Public Interest Law Clearing House NSW (PILCH) chief executive Robin Banks said.
The Predatory Lending Coalition, which is being coordinated by PILCH and several legal aid groups, includes the Australian Bankers' Association and the Mortgage and Finance Association of Australia. The number of repossession proceedings in the Supreme Court in NSW had almost doubled in the last four years, Mrs Banks said. "That might have something to do with the economic cycle. "But the numbers are so big it would suggest that at least some, and possibly a significant percentage of the additional possessions matters, are based on this type of loan."
Mrs Banks said the coalition wanted all credit providers to be part of an external dispute resolution service approved by the Australian Securities and Investments Commission (ASIC). The coalition will also press state and federal leaders to adopt more stringent disclosure regulations for brokers. Western Australia is the only state that requires mortgage brokers to be licensed and obtain minimum qualifications. All other states and territories are pondering tightening their rules.
A New South Wales Office of Fair Trading spokesman Christian Fanker said this month that the NSW government would prepare a draft bill later this year on the regulation and licensing of mortgage and finance brokers. Lobbyists are also pressing the federal government to introduce a uniform, national regime for mortgage brokers. Reserve Bank of Australia assistant governor Philip Lowe told a parliamentary inquiry this month that the federal government should consider having ASIC take over the regulation of the credit advice industry from the states.
ANZ trials multi-million dollar online mortgage system - Herald Sun
10 July 2003
https://www.finextra.com/newsarticle/9421/anz-trials-multi-million-dollar-online-mortgage-system---herald-sun
The Herald Sun reports that ANZ has begun concept tests of a new online mortgage application service for broker intermediaries. The paper says the new system, known as eMOS, has been under development for some time. An un-named industry source puts the total cost of the project to the bank at A$20 million. ANZ remains tight-lipped about the system saying only that the bank is "committed to developing a standard for online applications for the broker market". Australian mortgage brokers currently need to deal with as many as 30 different lenders. Most use paper-based applications forms which are faxed to the lender along with any supporting documentation.
According to the Herald Sun, mortgage brokers dealing with ANZ have to fill in up to 40 pages of application forms on behalf of their clients. The head of ANZ's mortgage business, Chris Cooper, declined to comment on the eMOS project to the Herald Sun. A bank spokesman told the paper: "We will not be at a stage where we consider how we move forward until sometime next year." Rival Westpac introduced an online application system in September 2002 and promises conditional approvals for a plain vanilla mortgage within an hour. Australian intermediaries have established a Lending Industry XML Forum in an attempt to set standards for online data exchange with lenders.
Mrs Banks said the coalition, which had its first meeting on August 27, would talk to ministers from all state and federal governments about reforms to deal with predatory lending practices. PILCH had already met NSW Fair Trading Minister Linda Burney and Mrs Banks said she was encouraged by her response