This article appears to be all about writing fraudulent loans to get apartment sales over the line for the related property entity PIA. The banks knew what they were doing. The aggregator knew what they were doing. They all played along because the volumes were so high... and until the sentiment on fraud changed, they were all quite happy to turn a blind eye. Then came the terminations and the blame game. Their previous aggregator ( VOW - now merged with Yellow Brick Road) lauded these guys for years with all kinds of rewards and awards along the way.... They arent the only ones though... plenty of non resident focused mortgage businesses who were Top 10 year in and year out suddenly disappeared a couple of years back when the fraud suddenly became important to the banks.... but until then , this stuff went on all the time. Crazy ( and very lucky ) thing is.... in spite of the tens of billions of dodgy non resident investment loans written, they didnt go belly up and cost the banks any losses. The arrears and delinquency rates are extremely low. So anyone who ever wondered how the big non resident sales operations ( such as the onementioned in this article) ) get all their non resident off the plan sales over the line/settled .... here it is......
Appears all those shining towers in Sydney Olympic Park are built on these fraudulent loans.... They'll be bulldozing them in a couple of years time.
I wonder when the banks will audit these brokers who are doling out fraudulent loans and try to clawback commissions?
This was an open secret at the time. (Mostly) Chinese brokers creating fraudulent documentation for wealth foreign buyers purchasing OTP apartments. Some of these broker groups were writing $1Bn+ per annum. The aggregations knew about it, the banks knew about it and even gave them special assessors to approve the loans. Everyone these loans touched was complicit and complaints from the rest of the industry fell on deaf ears. It was a very different lending environment back then but even then this was undeniable fraud it flew in the face of NCCP legislation. IMO this was a criminal conspiracy. It wasn't just wrong by today's standards, it was illegal at the time as well. The brokers should be facing jail time. The aggregations and lenders that were complicit should be facing stiff penalties. The reason lenders were complicit is because they understood who the borrowers were. These loans didn't default, the clients were extremely wealthy foreigners that could pay cash for the properties. The reason the money was borrowed is because it was difficult to get that much money out of the country.
What criminal liability are those involved actually exposed to? If there are prosecutions, I wonder if they could go beyond just brokers and banks to borrowers as well? However unlikely it might be that these wealthy foreign nationals will actually turn up to court...
The brokers committed fraud or knowingly facilitated it. I've heard of cases where the brokers were generating payslips for the clients. The lenders knew the fraud was occurring ignored it and ignored responsible lending laws by funding the loans. There were stories going around of different applications being identical in their assets and liabilities, only the names of the clients and the property details were changed. The aggregators also knew these brokers were committing fraud and did nothing about it, also violating their own credit license. It must ring an alarm bell when 99% of the brokers loans are for foreign residents and 90% of the applications are going to the same lender. It would be quite difficult to prosecute the borrowers. Their English literacy skills would be questionable, they were simply told that they would get the loan if they signed on the line. All they thought they needed to do was to make the repayments (which they did). These individuals aren't stupid (far from it), but they could easily plead ignorance and that the misconduct was the broker and the bank.
