Let the blame begins

The other day wife went on a shopping spree. Good to know I can now sue Westfield for my massive credit card bill!!

 

I actually don’t think it’s important who’s right and who’s wrong. It’s a dog eat dog world. I just want to know what impact this will have on the market? A flood of lawsuits in the middle of an epic downturn sounds like a perfect recipe for a GFC style credit crunch. No different than “jingle mail”, something many people said wouldn’t happen in Aus.

 

We were the same - Just did what "everyone else" had done to make their squillions. We had no true concept that you actually might have to move from IO to PI. It was a blessing in disguise when we sold a really bad IP in 2016 and were forced to refinance onto P&I. That was $50,ooo debts' long ago.

PS we still haven't made any squillions. What, the rest of Australia isn't the same as Sydney and Melbourne???? It didn't say that in those books about investing and at all the seminars.

 

dont worry, fast fwd another 5-10 years or another cycle,

and you will be well ahead of everyone else, and in a far stronger position

that is unless you do something stupid in the meantime

 

Unfortunately it only takes a few bad apples within the mortgage broking industry to give the industry a bad name, they were possibly writing out lots of loans that gave the customer what they wanted, but didn't necessarily reflect the truth about their clients ability to be able to manage the repayments.
The broker gets his money , the clients get their property and the bank gets to wear all the problems and bad publicity if things go pear shaped.
In the current market the banks might feel that they have better control of compliance and regulations if it was brought back "inhouse".

 

Unfortunately you are incorrect, as the bank assessed the deal

 

No thats been proven to be incorrect .
In many cases they used the numbers that the broker supplied.
They also applied a series of measurements regarding cost of living expenses that were also clearly wrong and not fit for purpose..
Its easy to not ask the right questions and just look the other way

 

What numbers are you talking about??
Also re living expenses at a minimum the HEM would have been used
And again. The bank assessed the deal, not the broker
So please enlighten us as to what has happened here?

 

Seriously, some the banks really stopped looking closely at many home loans in depth many years ago that came from brokers, although thats changed in the last year or two
They only really looked at the numbers that they wanted to see
The brokers knew themselves who they could approach and who would deny.
The banks became sales driven many years age , many "back of house functions" typically found at head office disappeared a long time ago , as they did not generate income.
Many of its staff that hung around were all sales driven, management were all sales driven
It also assumed that over time you would get pay rises well above inflation , those days are long gone, so the blowtorch has been put on actual household expenses, rather than a couple of assumptions that stopped working over 6 years ago.
Someone driven by sales(and commissions) isnt really going to question to deeply numbers that dont really stack up , as long as they can get the client across the line.
Especially when it came to actual serviceability.

 

So, the bank assessed the loan correct?

Secondly if I put down that my living expenses were $300 month, even 6 years ago the bank would not have accepted this figure and used minimum living expense to assess the deal.

So it leads back to the assessors which is what I stated in the beginning.

That however is not what this initial post was about. The lady having a cry and wanting to blame the bank is an idiot.

 

Many here just blaming the customer but banks keep making the same mistakes in many countries, Spain, UK, Ireland, USA, now Australia. Lending too freely when times are good then it all goes pear shaped and they and their customers and shareholders suffer.

Lending 95% IO over 10 times salary is just reckless. If banks can't regulate themselves properly then the government needs to

 

What do you think with your experience ,will Labor gain power in Australia and change everything or the dice are already loaded..

 

It's been a very, very long time since any lender did 95% IO at 10 times salary, but the other thing you said deserves a bit more interpretation...

Instead:

If people can't regulate themselves, then the banks need to. If the banks can't regulate themselves, then the government needs to.

Thus, the government needs to regulate the people.

 

We are becoming a more and more litigious society unfortunately, a lot like the US. If something bad happens the first question is who can I sue. Personal responsibility, what's that?

 

Personal repsonbilty!


What do you mean im going to get fat if i have 5 whoppers , 5 big macs and 5 kfc per week washed down with 14 l of coke

 

I'd say about 5-10% of society consistently take personal responsibility for most of their ****.

Taking personal responsibility for when things dont turn out how we like comes very unnatural to most and Its not hard to understand why. Easier to blame others than point the finger at yourself and admit you suck and screwed up .

I believe consistently taking PR is as much a life philosophy as it is a conscious mindset.

 

It's a shame banks can't counter sue for stupidity, shareholders would be getting special dividends monthly!

 

Don't forget to sue the bank you have the credit card with also. Unless she bought a winning lotto ticket at the shops, in which case you're investment geniuses, and the bank should stop constraining you with it's credit limit.

 

Meanwhile, it Texas, Disgraced Enron chief released from federal custody