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ANZ and Westpac Investigating Hundreds of Approved Dodgy Foreign Mortgages

Discussion in 'Property Finance' started by House, 9th May, 2016.

  1. House

    House Well-Known Member Premium Member

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    Who would have thought;
    ANZ, Westpac hit by hundreds of Chinese home loan frauds
     
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  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    That's good that they are, but I bet there's plenty of local ones too.
     
  3. larrylarry

    larrylarry Well-Known Member

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    So are they saying that despite being fraudulent, it's still good business. I don't believe they never suspected it to be the case. Seriously.
     
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  4. emza

    emza Well-Known Member

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    They knew the whole time... it's just politically convenient to pin it on brokers now to fend off a royal commission and to also appear as responsible lenders.

    I think we're going to be hearing a lot more of this and brokers are going to be blamed for most of it.

    Oh, the broker fudged the income? Well, we had no idea! No idea I say! We're as shocked as anybody.

    Any brokers out there who ever fudged/lied/engaged in fraud should be very worried. The banks are only out to save themselves and when more of those fudged loans go bad, they'll be pointing the finger at the brokers.
     
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  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Hundreds of fraudulent loans? What they really mean is tens of thousands of fraudulent loans and frankly they know about it and always have.

    I'm aware of quite a few large mortgage broking firms that market exclusively to Chinese investors, writing upwards of $1B a year and 70% of it is with Westpac. They can't get regular income documents for these borrowers so the documents are created to meet the requirements. These firms are little more than 'sweat shops', most of the people organising these loans aren't even legally qualified brokers. It's simply get a basic spec sheet, tell the borrowers what they need to produce, tell them where to sign, send the loan application to the bank, move onto the next one.

    I've heard that 4 out of 5 of the loans coming out of some firms are fraudulent (from one of the brokers themselves). These firms always specialise in foreign investment.

    It would be a nice example of the 80/20 rule, but the numbers are wrong. More like it's less than 5% of the broker market committing more than 95% of the fraud.

    Banks know about this but they also know that these borrowers have so much money that the chance of them defaulting is negligible, even the article acknowledges this. The banks are incredibly complicit in this fraud as they knowingly allow the policies and procedures that create these loopholes. They could very easily shut it down with a very simply policy change but they choose not to.
     
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  6. MTR

    MTR Well-Known Member Premium Member

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    Of course.
    There are also lo docs around today which can easily be manipulated to improve chances of sourcing loans, what's new and some very clever/creative brokers around.
     
    Last edited: 9th May, 2016
  7. truong

    truong Well-Known Member

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    Not surprising really. It’s an open secret in Chinese communities around the world that this is something you can do. Even I have been approached to recommend some friendly brokers they can deal with. The relative I mentioned in this post asked for “help” in this regard and was sternly advised not to do it.
    They tend to act on hearsay, so when one person does well in something others tend to flock into it without much thought. By just observing patterns the banks should have known about this for yonks. Same goes for education, immigration, money transfers, etc…
     
  8. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Yep ive been saying and thinking this for years. Heaps of these Chinese brokerages writing staggering numbers of loans and often they pop out of nowhere run by some guy with no banking or broking experience. Just not possible without something dodgy going on.
     
  9. dabbler

    dabbler Well-Known Member

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    Gee, wonder if they are all trying to look like the good guys now, passing on rates quickly and largely in full, finding the internal problems (look, we can self investigate and rectify etc)

    Would have nothing to do with an election would it ?


    Here is the thing though, how can it be fraud if they are the ones advancing the loans and they feel the repayments are better than the local market, whom is being defrauded ?

    I heard of a bank that caught a local who falsified probably everything before applying, but settlement proceeded & if what I know was right, they would not qualify for a phone plan, and what about all these people with dirty money, they seem to get loans.

    What I am saying, is the banks really only care about getting the repayments from where I stand. Surely there are people within a bank that can make such decisions, borrowing guidelines are just that, no ? What about the discussions of some members of the other site who were able to seemingly get everything rubber stamped.
     
  10. melbournian

    melbournian Well-Known Member

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    it's no big secret - they been doing this in the 80s. i got relatives who can't really disclose their income overseas as much is through cash and shell companies.Sometimes if they disclose too much or through the proper channels in asia, you get caught out in asia for brides or initimadation from local socities. THere are legitimate reasons why some ppl do this. It is not that they can't afford it he can well more afford it so they just buy it for their kids and get the necessary paperwork done. To be honest, yes it is wrong but it is less riskier borrowing to these people oppose to other riskier borrowers.
     
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  11. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    The thing is if something changes in China the money being used for repayments may disappear so from the banks point of view it is still inherently risky to rely on misinformation / fraudulent docs.
     
  12. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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  13. JDP1

    JDP1 Well-Known Member

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    damn i wish i had a job in china, india etc...would have been a millionairre by now.:)
    zero sleep at night factor..yes, but many digits in the bank account :)
     
  14. Scott No Mates

    Scott No Mates Well-Known Member

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    I'd rather my digits intact on my hands
     
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  15. melbournian

    melbournian Well-Known Member

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    hmmm not everyone is a millionaire as one would presume. go the villages in china, indonesia, thailand, malaysia and you see poverty that you can't see in Australia. Some of these people became millionaires by chance such as ok gov decides to let you run this farm or factory or you can now have the rights to this tin mine and become instant millionaires. Also not everyone sleeps well at night being worried of getting asked for bribes or being taken to jail out of spite from others. Some get monopoly businesses like supplying stationary to universities in the whole country at inflated prices and Others like a friend of mine makes money selling hair growth formulas in asia (one would laugh) but is able to buy properties worth 10 mil in cash in australia. Others do business and other methods to get ahead in life.
     
  16. JDP1

    JDP1 Well-Known Member

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    Of course not everyone...and if any of the forum went there i doubt anyone would be a villager. .quite the opposite..
     
  17. dabbler

    dabbler Well-Known Member

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    Yes, I understand that, and I am sure the banks already understand the risk, what I am saying is it seems hardly likely to be fraud, however they may hang out some of these brokers for it saying they had no idea how naughty they were being, just to get brownie points.
     
  18. Skilled_Migrant

    Skilled_Migrant Well-Known Member

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  19. propernewb

    propernewb Well-Known Member

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    Royal commission here we go...
     
  20. Redwood

    Redwood Well-Known Member

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    The worlds best kept secret. A top 4 bank used to have a one page application for foreigners. Great post by Pete. You will see the big boys exclusively chase these guys manipulating the foreign income source - this has happened for ages. Banks keep a blind eye and just count the dollars..... bit like a "mini Madoff".

    Cheers Ivan