Royal Commision liar loans and people lent too much money (the other side)

Discussion in 'Property Market Economics' started by kaibo, 15th Mar, 2018.

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  1. kaibo

    kaibo Well-Known Member

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    Bank bashing is alive as well but shouldn't the people lying to the banks (even if this was encouraged by the broker) be also to blame instead of just criticising the banks for allowing it to happen

    How about all those people who were lent more than they could afford but made a tonne of money in the Melbourne/Sydney market over the last few years even if they couldn't afford payments and were forced to sell.

    When they purchase a bad investment and lose money they may claim the bank shouldn't have lent to them and sue them.

    Was happens when they make money from irresponsible lending would they donate some money back to the bank
     
  2. Terry_w

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

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    Of course I say. They wouldn't be complaining if their properties boomed. They took a gamble and it didn't work out.

    Is it a case of the banks lending them too much money or a case of them borrowing too much?
     
    Marg4000 likes this.
  3. marmot

    marmot Well-Known Member

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    The bank wanted to give us just under $1mill in 2009, we were gobsmacked , we only wanted 20% of that.
    It was like going to maccas and ordering a big mac , would you like fries with that sir.
    So easy , I'm sure many would have taken the full amount and this was only one year after the GFC ,in those days everything was rolled into the loan , we didn't have to put up anything.
    In a rising market no one cares, its only when the market goes backwards it becomes an issue , especially if you were silly enough to go interest only with no intention to pay of the principal or could not afford a P&I loan.
     
    Last edited: 15th Mar, 2018
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  4. Zoolander

    Zoolander Well-Known Member

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    Take the full amount and park it in offsets, untouched until a good opportunity comes around. Bless 100% offset facilities- hopefully these never become targets of mainstream ire.

    Never know when lending will tighten and having some buffer helps weather change. Dont wanna be that household (or single income dude) who’ll get pushed off a cliff with a $50/wk bump in repayments...
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    personal entitlement, social responseability

    Welcome to 1984

    ta
    rolf
     
  6. Willy

    Willy Well-Known Member

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    It's easier to blame the bank than take any responsibility for your own situation.

    You hear people complaining that a bank wants them to pay LMI. The bank must be crap so they go to another one. Instead of thinking, if the bank is worried about my ability to repay this loan then maybe I should look at my situation again.
    Seeking instant gratification can be a problem for investors and borrowers as well.
     
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  7. Nadine Cross

    Nadine Cross Well-Known Member

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    Agree. Generally, the Banks' qualifying criteria are strict enough to filter out the vast majority of risky loan applicants if those applicants are telling the truth when they apply.
    I've applied for numerous loans over the years, and have had 4 knocked back - all due to poor DSR.
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    In the last few months, I have come to the conclusion on something

    Many Pre Apra investors that we have as clients are people that use their investing as a brain taxing exercise. That is they could do their middling to high-paid PAYE jobs while standing on their head and got very little self-satisfaction from the work that they were doing, it's almost as if their self-worth was highly dependent on how successful they were with their investment portfolio.

    Take this one step further, I have identified I think, that many people suffer a very strong sense of loss associated with not being able to exercise themselves into that area of what they see as significance.

    Of course most of us don't see that stuff inside ourselves, it takes an outward mindset to be aware of it.

    So, what tends to happen is that we sideline risk a little more for the next "fix"

    Can this stuff really be a form of addiction ?

    ta
    rolf
     
  9. Willy

    Willy Well-Known Member

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    I believe so.

    Take peoples reaction to APRA. Most see it as a hurdle to get around in the pursuit of more properties rather than a sign that a change of strategy may be necessary.

    Lives seem to be defined by the number of properties they hold. Another sign of a bubble perhaps?

    The investors with the most equity never make it into the media.

    Willy
     
    Last edited: 18th Mar, 2018