Brokers - Sellers NOT to blame for dodgy fraudulent Interest Only Mortgage Loans: Blame the Engineers at the Major Banks.
Blame the Corrupted Regulators
Denise L Brailey
7th April, 2018
The Royal Commissioner has been asked to look at the delivery of Bank driven "Financial Advice and "Financial Strategies" that have caused so much distress to ordinary Australians during the past two decades.
Reports handed in to the RC by Major Banks and the Australian Securities and Investment Commission ("ASIC") are expected to blame the sellers. ASIC has not been forthcoming in their explanations of the Mechanics of these frauds in lending. The Government pays ASIC half of what is received for ASIC minding the corporate database acting as a corporate librarian: approx $450 million annually to report to Treasury each month.
Shortly, the Turnbull Government will change the system of payment and ask the Banks to pick up the cost of running useless ASIC. The entire library fees of $850 million will go to Treasury coffers. The Australian Competition and Consumers Commission ("ACCC") became obsolete and impotent, years ago. Our Banks admitted to the Commissioner under Oath, and in answer to his direct question: "Yes we are all acting as ONE." Another suggested: "well no-one wants to be first horse out of the box." Peter Costello and the LNP created "The Twin peaks Model" and separations of regulatory powers in 1998. Joe Hockey was Finance Minister at that time. The ACCC will hand over "Competition" oversight to ASIC. The Banks will find the regulators under this LNP Government.
For two decades, the Financial Ombudsman's Service ("FOS") has been badly running a consumer "dispute service." the Banker's CARTEL ran all complaints to only look at one issue: Maladministration in Lending - in layman's terms: did the Bank ROBO Approval System (the computer did it) make an ERROR of judgement in unaffordable lending. Bankers chipped in around $35 million a year to control complaint handling - an essential element in white collar crime.
There is a Code Compliance Monitoring Committee ("CCMC") who are a Panel of 8 faceless useless people who do absolutely nothing for consumers yet, are supposed to oversee problems with FOS. Why are they nobbled? Their bosses are the Code Compliance Monitoring Committee Association (CCMCA) .
Who are these people at the CCMCA? THE FOUR MAJOR BANKS plus twelve other Lenders - all 16 are peddlers and profiteers of Dud Mortgage Loans under the Association aka Cartel named as the CCMCA. Consumers are left intentionally high and dry by Government.
Bankers are the ones who forced FOS and ASIC to falsely state that "brokers are the agents of the borrowers." IN LAW, the High Court ruled 2012: The Broker is the Agent of the BANK!!
Brokers are employed by the Banks to sell product: ONE PRODUCT: Sub Prime LOW DOCS now known as IO Loans or INTEREST ONLY dud Mortgages. You can never ever pay these loans off. These products collapse intentionally within 5 - 10 years and only serve to pump oxygen into property bubbles and threaten the economy.
These nefarious products have no warning labels by any of the above "bodies," who are supposedly established and cost taxpayers billions of dollars to run, yet serve no purpose than to permit the Banks to continue to manufacture highly toxic mortgage products.
In 2003, ASIC KNEW via its requested ATO cross correlation studies that $50k Incomes on tax returns were the TRUE income, and the corresponding income declared on the mortgage loan borrower Loan Application Forms were FALSE and exaggerated by a BANK engineered serviceability calculator as being wrongly "projected" as $130k.
In March 2003 ASIC commissioned and briefed Karen Cox and Katherine Lane of the Consumer Legal Centre to write a report on brokers and toxic mortgage loan. https://consumeraction.org.au/wp-content/uploads/2012/05/DL64.pdf
When I read this document in 2003, I could not believe how much vital information had been left out!
ASIC were blaming the Brokers and protecting the Lenders. Nothing has changed. Now ASIC is about to blame the brokers once again when the mounting evidence is to the contrary.
The Brokers were being hired by the banks, with high turnover rate, and taught to "source new victim borrowers" and fill in 11 pages of the Loan Application prior to visiting the prospective client in their home. The BDM's (bank business managers) would teach the brokers and branch managers and bank officers to never allow the borrowers to fill out their own forms.
NOT ONE AUSTRALIAN was permitted to fill in their own application for a loan!
An Army of BDM's would go to every office of every SELLER and teach how to sell LOW DOC sub prime loans.
How to source "Pensioners known as ARIPs who owned their own homes and had no debt."
How to fill in forms at the office and as an agent of the bank collect sensitive Identification docs from the customer.
How to use and attach the dreaded and secretive service calculator (the Income fudging bank computerised program)
How to ONLY PRESENT 3 PAGES for signature to the customer.
How to later on, when approved, sign up the contract and witness, using yellow stickers: Six Minute Sign Ups.
Some documents were marked DO NOT SHOW THE BORROWER.
ASIC has known since inception, this was a massive fraud in lending engineered meticulously by the Banks. If Sellers complained, ASIC would brush their complaints aside. Yet ASIC would chose around 10 sellers a year to "prosecute" and fine them, imposing 5 year banks etc. There were always a few "rogues." This worked perfectly for the Banks whilst the customers were left high and dry with and average loss of $200,000.
Brokers were threatened by banks under "Privacy Act." In any case, the Sellers were all taught to use the HEM as a benchmark for an evil Cost of Living assessment - one seize fits all and is below the HPI - Henderson Poverty Index. So every new bank mortgage client was deemed to have to live on bread and water for 30 years aged 60....."for this to work!!"
Sellers had no knowledge of the fraud as they were told by Bank Lawyers (Gadens, Kemp Strang, HWL etc) in emails direct to the broekr channels, that projections were in order and the serviceability calculator was a compulsory tool necessary for loan approvals. Just following orders...............
Sellers trusted the banking system and the regulators and so did the customers. Now the awful truth is emerging, as the bodies of victims keep piling up. Australia has become a landscape littered with broken hearts and shattered dreams as the ARIPs lose their own home that they worked hard for over 25 year period.
Banks intend to throw two million families out of their homes, farms and businesses. That 'pile' of human suffering and homelessness is about to become much larger, as bank executives race for the exits and claim their $150 million exit fee.
As the Royal Commission into Banking enters into its second session dealing with "financial advice," spare a thought for the 200,000 people who were victims of developer scams and all the agents who sold disasters such as Westpoint, Fincorp, ACR, Storm and 100 other companies who crashed in the past costing retirees well over $5 billion in losses.
People were also spruiked into taking equity from their own homes and borrowing on Interest Only loans from these same bad bankers. Same bank induced "financial strategies," and the same shockingly bad financial advice. Next were the "Investors" who were created by the banks to take equity loans to throw their own homes onto the PROPERTY BONFIRE.
Now the Bankers are bleating this was an unfortunate series of "BANK ERRORS!" Yet the ERRORS were entirely in the Banks' favour and never in the customer's favour: intentionally so.
The INTENTION TO DECEIVE is on every page of evidence we have reported to authorities over the years. The prudential regulator Australian Prudential Regulatory Authority ("APRA") was doing nothing to stop the carnage, yet was busy sending barrel loads of FAKE STATS to Banking International System ("BIS") in Switzerland.
APRA checked nothing. We doubt any statutory obligations were fulfilled and checked by two external auditors, as the audit firms are never named. OOPs!
The ACCC failed to note the activity of the BANKING CARTEL, or the lack of Competition. ASIC failed to warn the customers of what they knew were impending disasters years before the collapses occurred.
APRA and ASIC FAILED to properly investigate the 16 Banks, despite knowing the evidence clearly showed criminal asset-stripping taking place during two decades of sustained customer financial abuse.
During the next two weeks, ASIC will sharpen its regulatory knives to have a go at a few brokers as usual. APRA will duck for cover and ACCC will be saying: we no longer have authority to do anything.
Consumers have had enough!!!
We need an extended Royal Commission into THE CORRUPTED REGULATORS!