Attached to THE ARGUMENT OF AGENCY PAPER 2011
BFCSA: Bankers permitted to become a LAW UNTO THEMSELVES - more 2011
revelations on Mortgage Fraud Engineered By Bankers
Ostensible Authority:
1. There existed strong Ostensible Authority links directly between Introducers and Lenders. The links are as follows:
a. Introducer’s were provided with database access to track their approvals.
b. Introducer’s were provided with stationary bearing the Lender Logo’s.
c. Introducers were provided with Lender material to enhance sales.
d. Emails between Loan Processing Officers and Introducer ensured direct communication between the Lender and its own agent: the Introducer.
e. Lenders employed BDM’s to teach Introducers the system and how to maximise loan approvals....driven by a very high commission structure provided by the Lenders.
f. Emails between BDMs and Introducers paint a clear picture of loan acceptance practices.
g. ABN ‘for a day” became standard industry practice and accepted by the Lenders
h. The Lenders were at all times the creators of the system and at all times “in control” of operations retaining the power to change bad conduct via warranties and agreements and the AFS licensing system.
2. The Lenders sent their clients a universal “Welcome as a client” letter.
3. The only contract signed at the relevant time, by both Lender and Borrower was the Mortgage Contract. Neither the Introducer, nor SP was party to this document, other than as a delivery conduit and on occasions, witnessing of signatures.
4. The only contractual arrangement was between the Lender and the Borrower.
5. The STRUCTURE was completely authorised and created by the Lender.
6. The Argument of Agency is clearly on the side of the Borrower as client of the Lender according to the Courts.
7. The Lender contracted with the Service Provider (SP) to hire “Introducers” (formerly known as Brokers) to spruik new persons to become clients of the Lender.
8. The Service Provider provided warrants to the Lender as to conduct etc, and as the Nine Judges suggested, the Lender ought to be exercising those warrants.
9. The Lender provided commissions to the SP, who then paid commissions to the Introducer as the Lender intended.
10. The Lender manufactured the products known as Low Doc Loans and created the legal contracts, the forms, the stationary and the LOGO.
11. The Lender employed BDM’s to scrutinise the activities of the Introducers, as a safety valve in case the SP’s were dishonest or negligent.
12. The LOGO gave comfort to the potential client that they were dealing with a well known and hopefully reputable brand of Lender – hence the LOGOS to encourage consumer trust.
13. The Lender provided commissions to facilitate an overflow of new clients for the bank.
14. The Lender provided the services of the Business Development Manager (“BDM”) to ensure direct communication between the Lender and the Introducer.
15. The BDM assisted the Introducer in preparing paperwork (“LAF’s”) including advice and tips for the Lender’s potential client to ensure a greater volume of business approved.
16. The BDM was a direct employee of the Lender – a bank officer. The BDM was required to call into the office of the Introducer on a weekly basis.
17. BDM’s established regular contacts with the Introducers for the purpose of boosting Low Doc Loans as a favoured product. BDM’s were required to teach Introducers how to use the lending facility and prepare applications in a favourable light.
18. Loan Application Forms ere FAXED by the Introducer to the Lenders.
19. Introducer’s generated public interest in mortgage loans and at times MV loans as a carrot to generate new inquiries. As the name suggested the Introducer would then “introduce” the Inquirer to the Lender as a potential Lender client.
20. The repetition of the above activities suggests a collusive nature of dealing between Lenders, Mortgage Managers, Special Providers and Introducers. The patterns are disturbing. Dealing with each case as an individual activity denies the complainant of a fair assessment of what is now apparent to us: systemic issues in the selling and promotion of Low Doc lending.
21. Lenders have constantly referred to “standard industry practice,” in reference to these serious allegations.
22. Lawyers of the Lender prepared and then posted the Mortgage Contract to their Client.
23. Borrowers were not given advice as to risks and were not required to attend an office of the Lender for this crucial stage of Lender/Borrower agreement.
24. Low Doc Loans required business people with ABNs who could produce tax returns from a minimum of two years prior to the application. Had the Lender telephoned the client to verify financial details, the truth would have immediately been discovered and the loan declined.
25. The Lender made a corporate decision to hire Introducers knowing the high potential for fraud and forgery to the client.
26. The Lender made a corporate decision to arrange for SP’s to verify loan details and both failed in their duty to make a phone call to the potential client or indeed ask for financial documents such as pay slips etc.
27. The Lenders owed a duty of care to clients and failed in their duty to do so.
28. Lenders knew the risk that had been inherent in these types of loans during the previous decade.
29. Lenders knew the age of their clients would prevent them from paying off such a large loan.
30. Lenders knew the only property owned at the time of signing was their own residential home and would therefore place them at risk of huge losses.
31. Lenders knew this loan was classified in law as “asset lending.”
32. Lenders knew the purpose of the loan was specifically for investment and knew of the inexperience of the client and the risk was problematic for Lender and Borrower.
33. Lenders knew the risks associated with using the “Broker Model.”
34. Lenders ignored the dangers for themselves and their clients and any members of the public who may have been related to the victims.
35. There are documents in existence known as “Confirmation of Conversation” forms and also Audits on client files. These documents were created by the Lender, knowing the duty owed to their client, to demonstrate “prudent lending.”
36. Introducers had access to a system called FLEX and were also given access to bank databases to track the progress of the loan approval. The FLEX system also provided details of their volume commissions and quotas set by the Lender and its’ SP.
37. Introducers were also given access to Lender “service calculators” and online Loan Application submissions direct to the Lenders.
38. The Lender/SP Agreements attempted to protect the Lenders in the event of fraud, establishing the knowledge and expectation of such an activity, yet created as a weapon to cast blame on others. In other words, a cleverly constructed document to gather all the profits and retain zero liability for criminal conduct.
39. The Mortgage Contracts have been deemed by the Courts as being unjust and the Borrowers being identified as the client of the Lender.
40. The evidence obtained to date points to Maladministration in Lending on a grand scale due to the Authority given by the Lender to the Introducer to gather in new clientele which the Lenders stood to gain enormous profits from.
41. The most overrepresented Lender in terms of complaints to date is well known to FOS.
EVIDENCE of CONSPIRACY / COLLUSION / MOTIVE
CREATOR
Target Market - ARIP’s
Business Development Managers: “BDM’s”
Introducers
Strategy
The “Business Product” - Low Doc Loans
Attempt to hide Client Relationship
Provision of all Materials
Use of LOGOs
Use of database
Provisions of all contracts, forms and agreements
STRUCTURE
Sub Prime Lending
Agency Agreements
Subsidiaries and Partnerships
Never to Phone
No Copies
Inequality of Information to Consumers
Communication between BDMs and Introducers
LOAN APPLICATION FORMS
ABN for a day scam
Age
Income
Assets
Never to Phone
No Copies
Affordability – Ability to repay the loan
FAILURES in BANKING ETHICS
Mal Administration in Lending
Failure to report to Regulatory Authorities
Evidence of a Conspiracy to Defraud
Evidence of Collusion between Lenders
Intention to deceive the public and avoid liability
END