NAB sacks 20 bankers because of dodgy documentation

Discussion in 'Loans & Mortgage Brokers' started by Air_Bender, 16th Nov, 2017.

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  1. Air_Bender

    Air_Bender Well-Known Member

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  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    They prob wont be the only bank to do this. The issue was flagged by all major lenders when they stopped lending to foreign persons. Westpac ANZ and CBA admitted to irregularities as well. NAB just gave others the green light

    2000 loans x $700K = $1.4 Billion as an estimate. That may need to be reflected as a write down in the annual report.
     
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  3. PandS

    PandS Well-Known Member

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    No NINJA or liar loans in Australia they said
     
  4. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    That's right no nija or liar loans. Just fraudulent payslips, tax returns and employment letters from overseas borrowers on the whole.
     
  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    LOL - Bank will pay the affected customers. WTF ! Bank should sell their property
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Sometimes brokers see a client and know they don't qualify for a loan with a particular lender and send the client away. Just after client approaches same lender and gets loan approved and tells everyone broker is no good as they couldn't get the loan but going direct they could.

    We now know why
     
  7. Perthguy

    Perthguy Well-Known Member

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  8. Scott No Mates

    Scott No Mates Well-Known Member

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    Only if they are at risk of default - at we know, property only increases in value and what would have been risky is now kosher at the LVR have reduced.
     
  9. MC1

    MC1 Well-Known Member

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    This would be tip of the iceberg stuff honestly. Had a client last week whose serviceability was not evident. Advised that I would be unable to proceed. He had preapproval with CBA within 24 hours.
    Have seen it numerous times over the years. CBA and WBC mostly
     
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  10. larrylarry

    larrylarry Well-Known Member

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    did he or she have multiple loans already?
     
  11. euro73

    euro73 Well-Known Member Business Member

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    NINJA borrowers defaulted in droves and most were non recourse loans. Australian loans are full recourse and the banks openly admit that their liar loans have lower delinquency rates than their prime stuff.... Not defending anything here...just lending some perspective to it all
     
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  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Thats because typically no doc and or lodoc loan borrowers have more substantial resources.

    Im always confused when i get a strong 80 % lend across various properties with dual incomes questioned and shaken upside down, yet the 97 % lvr single income FHB with 20 bucks left over after purchase sails through.................

    ta
    rolf
     
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  13. euro73

    euro73 Well-Known Member Business Member

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    Oh I meant actual "liar loans" ... the fraudulent full doc ones written by the sausage factory brokerages for non residents, that the majors have been acknowledging of late... you'll know who I mean if you look at the 2011,2012,2013,2014 and 2015 MPA top 100 and compare it to the 16 and 17 lists. They are conspicuous by their absence....

    As for lo docs and no docs, there has never been any disproportionate delinquency issues with those to the best of my knowledge. Its full doc liar loans where most the bad fraud has happened.
     
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    If you let the recipient of the comm, do the translating of the income docs............... you get what you expect I guess

    ta
    rolf
     
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  15. MC1

    MC1 Well-Known Member

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    Why do you ask that? Would it make a difference?
     
  16. larrylarry

    larrylarry Well-Known Member

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    wasn't sure what you meant by serviceability not evident. over leveraged and not able to service further loans?
     
  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Mitigation of 3 5 and 8 k of negative surplus isnt uncommon.

    My concept is that I am just not good enough with working through the financials.

    ta
    rolf
     
  18. Richard Taylor

    Richard Taylor Well-Known Member

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    Agree about the lower level of default for certain loans.

    Our Foreign National loan book stands at around 70M and growing each week and yet default rates stand at less than 0.10%.

    Whilst our Credit team takes every precaution to verify overseas documents you sometimes have a feeling that something isn]t right. At a 60% lvr and with the rental income being assigned it could be easy to turn a blind eye.

    Euro is correct i have seen many a false payslip provided at a 90% or 95% lvr where the lender is highly exposed to potential default.
     
  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Property wont always increase. Fraud remains fraud.
     
    Last edited: 16th Nov, 2017
  20. PandS

    PandS Well-Known Member

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    but as long as the properties keep rising this won't be a problem because people can flipped to a higher buyer until someone refuses to pay a higher price.

    all these problems only surface when the tides turn
    like Warren Buffett said "you only find out who is swimming naked when the tide goes out." and High tide lifts all boats even the one that can barely stay afloat and rusty bottum

    I am pretty sure Australia like any other highly leverage world, when the tides turn there will be some ugly stories coming out

    Banks know the tides start to turn and they doing early spring cleaning and hopefully be in better position to deal with it when the tides actually turns, you don't want all this **** to hit you all at once
     
    Last edited: 17th Nov, 2017
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