Let the blame begins

‘Dealing with Westpac has devastated us’

Can banks get profits off people in similar circumstances ride the boom and get rich quick ?

 

****ing idiots - about time people took responsibility for their own screw ups, rather than looking to blame somebody else! Sure the bank (in the past) has done a basic check, but you have to do your own sanity check and sums to ensure you can pay back what you borrow. It's the nature of our society these days, it's always "somebody else's fault".

 

Sounds good to me take a risk speculating on the market, if it goes wrong blame the bank for funding your gamble.

So the bank trusted what the broker supplied, who supplied those cost of living numbers to the broker

 

How many articles do you see that say, oh we took a massive gamble with the banks money, and it paid off. We owe it to the banks for letting us borrow too much

 

Unfortunately it will probably help push the banks into being a bit more rigorous with regards to their lending standards and the ability for investors to repay ,based around P&I repayments and their actual spending habits.
There is probably no shortage of people that came in late , after seeing friends, work colleagues and family do exactly the same , but only a few years earlier and make a small fortune .

 

yeah they should take responsabilities but Banks should not enjoy taxpayer support and be allowed to fail and shareholders be wiped out.

 

banks are ez targets because they are they one with the money.

 

People only look at the $dollar profit of the banks. But forget the size of business, actual return to share holder, amount of tax paid etc.

As a shareholder, the banks on average return about 10% p.a. If i invested in a small business say $1,000,000, I did want more then $100K in return

 

It's idiots like this that have played a major part. It's no wonder the banks don't want to lend.
Bleeding heart society rules these days unfortunately

 

All the things the couple in the article are winging about are outlined on the front page of Westpac's loan offer documents. It's pretty clear if you bother to read these documents.

The brokers here constantly encounter people who we tell them they can't borrow the money they want to. Those people then go to the next broker, then the next lender and so on until they get someone who says yes.

These people bought their own home in 2008 and they were comfortable. They then bought an investment property in 2013, then another in 2014. They had plenty of time to learn about what they were actually doing. They would have had ample opportunity to reflect on the changes these investments made to their budget over time.

I've no love for Westpac, but the bank isn't responsible for the borrowers bad decisions. The best outcome for all borrowers would be that Westpac wins this case.

 

Let me guess. She lied about her employment and now thinks it's not her responsibility?

 

Last night I sat down with a couple to sign some loan documents. I pointed out the repayments, they added it up and stated that their repayments would be less than they are currently saving, plus they'll no longer be paying rent.

I basked in the warm fuzzy glow of responsible lending.

 

and you think adults, are consider adults because they are able to think for themselves ?this should be the norm no ?

 

and you realised that is what makes it all worthwhile, so you rebated your commission...?

Cheersm
Inertia.

 

No, but through nobodies fault, it's probably going to settle two days late. If they get charged penalty fees, I've already offered to compensate them.

 

I admit when I went on my IP shopping spree, I didnt think what would happen once my IO repayments finished,

I just assumed, you could renew or roll over or arrange it so the repayments wouldnt change too much

however as the deadline got a bit closer, I went into defensive mode slightly, and sold a few that had decent CG, and other factors, to increase my cash reserves

so it was a bit of luck, good timing, lack of financial literacy, financial literacy that ensured I didnt end up in the news

im now in a less aggressive mindset now that my accumulation phase is mostly over

 

just wait its okay,, u lived and you learn..

next up.. car loans.. if you think home mortgage is irresponsible lending..

car loans are about 10x worst ?

 

any personal loan not secured by an appreciating asset... If the thing doesn't improve your income, don't borrow for it! (a car can improve your income - eg able to get to/from a further workplace, able to transport more goods...)

Cheers,
Inertia

 

It's not clear from the article whether the borrowers underestimated their expenses or whether the broker did. Either way the borrowers signed the loan documents for loans they could not afford to repay. Or, they could afford the repayments on IO but not P&I. Either way they borrowed a lot of money with no plan and no clue.

I don't know what the solution is. You can't legislate against stupidity.