Low doc loans

[Franklin Clinton]

Found this in the paper today:

Maha Al Nasser got a little bit more than she bargained for on her shopping trip to the local mall.
She may have had groceries on her mind when she set out that day, perhaps a few Christmas gifts too. By the time she got home however Ms Al Nasser had bought a $207,000 time-bomb – a home loan she could not afford. It was to break up her marriage and bleed her dry financially.

Maha Al Nassar was signed up at the mall by scouts for the now defunct Adelaide mortgage broker, Power Loan. On top of the $207,000 loan, she was also inveigled into making a $120,000 ‘property investment’ in the doomed Westpoint Financial group.

The idea was that the income from the Westpoint investment would meet the repayments on the loan. Little did she know that financial planners were being paid hefty upfront commissions to plonk their unwary customers into Westpoint products. Little did she know Westpoint would soon go belly up.

The South Australia magistrate's court sentenced founder of Power Loan, Stephen McArdle, to 12 months in prison. There has been no justice for Maha Al Nassar though, or her family.

It began with that fateful trip to the mall, Westfield Shopping Centre in Parramatta, Sydney, in December 2004. She was approached by a Power Loan salesman with a deal she could hardly refuse: a ‘low-doc’ loan which did not require any proof of income.

http://www.smh.com.au/business/bank...hat-brought-down-a-family-20131029-2wcrx.html

This reminds me of my experience in obtaining a personal loan, like I said in my other thread. I lied to the bank saying I needed $40k for a holiday, and they didn't even scrutinise my claim. They also did not call my employer to verify I worked there. All they did was look at my bank statement and saw that I had received my pay a few days ago.

A few days later, I had $40k at my disposal. Does this not scare anyone?

 

[Judd]

This reminds me of my experience in obtaining a personal loan, like I said in my other thread. I lied to the bank saying I needed $40k for a holiday, and they didn't even scrutinise my claim. They also did not call my employer to verify I worked there. All they did was look at my bank statement and saw that I had received my pay a few days ago.

A few days later, I had $40k at my disposal. Does this not scare anyone?

The fact that you lied? Yes, that does scare me.

As for the bank very careless and slapdash.

 

[sydboy007]

As Marcus Padley wrote about in the SMH recently, you don't see any qualifications to sell property and you can pretty much say what you want, and there's no legal requirement to disclose any commissions you are receiving.

How the Govt can allow this situation to occur I do not know.

Even used cars salesmen have laws to abide by.

As Mulder said trust no one

 

[bigheadache]

Found this in the paper today:



http://www.smh.com.au/business/bank...hat-brought-down-a-family-20131029-2wcrx.html

This reminds me of my experience in obtaining a personal loan, like I said in my other thread. I lied to the bank saying I needed $40k for a holiday, and they didn't even scrutinise my claim. They also did not call my employer to verify I worked there. All they did was look at my bank statement and saw that I had received my pay a few days ago.

A few days later, I had $40k at my disposal. Does this not scare anyone?

Not really. Because if you got the loan from the same bank your pay regularly goes into, then they already know sh*tloads about you. All the big banks do datamining exercises. Ever wondered how you used to get credit card limit increase letters? (before the govt restricted them)

As for the article you linked to, why should you be surprised? The lady borrowed money from a mortgage fund through a mortgage broker to invest in Westpoint. She's probably dealing with 3 levels of dodginess right there.

 

[trainspotter]

Not sure if this is the correct answer but I am pretty sure that when you signed the application that you are signing a legal document whereby the bank has the ability to enforce the contract for the return of THEIR money that you claimed under a falsehood.

Oh yeah ... they would have performed a credit check on you as well to see if you have been a good boy/girl/liar. Statement of position would have been noted down, ability to service loan, current debt levels etc. Dunn & Bradstreet, VEDA, OAIC to name a few who record every loan you have applied for and any defaults you may have caused.

Also on the document you signed there would have been a SPECIFIC question as to the "usage" of the monies that you borrowed under a cloud of misnomers. The question would have asked if the loan is for business or personal usage. Depending on how you answered this then under the Uniform Consumer Credit Code you would have foregone all of your rights and protection as you advised them the loan was for a "holiday".

Anyways off topic ...... if the lady is stooopid enough to sign up for that kind of money then she deserves everything she gets. There would have been a plethora of people involved in this dealing that would have advised her it was a dodgy deal as well. She continued to proceed with the transaction. Husband leaving implicates him as guilty IMO.

Too many unknowns in the story to be specific but sounds like a media beat up to me !!

 

[trainspotter]

As Marcus Padley wrote about in the SMH recently, you don't see any qualifications to sell property and you can pretty much say what you want, and there's no legal requirement to disclose any commissions you are receiving.

How the Govt can allow this situation to occur I do not know.

Even used cars salesmen have laws to abide by.

As Mulder said trust no one

You just shoot from the hip don't you syd?

http://www.reia.com.au/real-estate-australia-trade-practices-act.php is the website you need.

Yep ... you do need to be qualified in the RE game and yep there are laws in place protecting the consumer.

Misleading and deceptive conduct
3. The ACCC has advised REIA that whilst the majority of estate agents value their clients and act
accordingly, the ACCC is concerned by an increase in complaints about the conduct of some agents.
4. Moreover, the ACCC has stated that:
a. “Section 52 of the Trade Practices Act prohibits misleading and deceptive conduct. This
provision has been adopted by states and territories in their respective Fair Trading Acts.”
b. “Misleading and deceptive conduct is a very broad concept. It need not be overt, and can include
actions, not just words. Misleading conduct can also include acts of silence or omission. Conduct
can be misleading even if the agent doesn’t actually make any specific representation. It is not
necessarily relevant whether the agent actually intended to mislead anyone to establish negligence.
What is relevant is the overall impression created by the conduct, and its actual or likely effect on
the target audience.”

http://www.reia.com.au/userfiles/REIA_Guidelines_TradePracticesAct2004.pdf

Oh well .......

 

[sydboy007]

You just shoot from the hip don't you syd?

http://www.reia.com.au/real-estate-australia-trade-practices-act.php is the website you need.

Yep ... you do need to be qualified in the RE game and yep there are laws in place protecting the consumer.

Misleading and deceptive conduct
3. The ACCC has advised REIA that whilst the majority of estate agents value their clients and act
accordingly, the ACCC is concerned by an increase in complaints about the conduct of some agents.
4. Moreover, the ACCC has stated that:
a. “Section 52 of the Trade Practices Act prohibits misleading and deceptive conduct. This
provision has been adopted by states and territories in their respective Fair Trading Acts.”
b. “Misleading and deceptive conduct is a very broad concept. It need not be overt, and can include
actions, not just words. Misleading conduct can also include acts of silence or omission. Conduct
can be misleading even if the agent doesn’t actually make any specific representation. It is not
necessarily relevant whether the agent actually intended to mislead anyone to establish negligence.
What is relevant is the overall impression created by the conduct, and its actual or likely effect on
the target audience.”

http://www.reia.com.au/userfiles/REIA_Guidelines_TradePracticesAct2004.pdf

Oh well .......

When I said sell I should have said spruiked.

http://www.macrobusiness.com.au/2013/10/the-free-for-all-of-property-advice/

To become a property investment adviser, what educational qualifications are required?
Diploma in Financial Services
Diploma in Real Estate
Bachelor of Business
Answer: none of the above.

That’s right, you can advise someone on buying a million dollar property and make tens of thousands of dollars in commission in this one transaction, yet you are not obligated to have any educational qualifications; not even completed Year 12.

The compulsory continuing professional development requirements for a property investment adviser are:
Attendance at the national conference (15 hours)
Equivalent of 20 hours which can include attendance at seminars, conferences, guest speaking
Equivalent of 30 hours which must include attendance at the national conference.
Answer: none of the above.

t makes sense, doesn’t it? Why would you have to do any ongoing training or development to keep up your skills if there was no minimum training or education requirements when you first started in the job?

The licensing requirements to become a property investment adviser include:
Police check
Minimum entry educational qualifications
Endorsement from two current property investment advisers
All of the above
Answer: none of the above.

A life insurance salesperson needs to be licensed. A real estate agent needs to be licensed. You would think that someone who is advising you on making one of the biggest decisions in your life is also licensed. Well, you thought wrong.

The regulatory body that oversees the property investment advice industry is:
Real Estate Institute of Australia
The Financial Advisers Commission
Australian Securities and Investments Commission (ASIC)
A and C
Answer: none of the above.

The simple answer is real property is not considered a “financial product” under the Corporations Act. Anyone can give advice on real property and is not obligated to abide by the Corporations Act nor do they come under the scrutiny of ASIC.

 

[trainspotter]

http://www.macrobusiness.com.au/2013/10/the-free-for-all-of-property-advice/

Maybe you need to do your research a bit better next time trainspotter.

Ahhhhhhhh nice catch on the "sell" vs "spruik" thingymajiggy.

Big difference between being an "adviser" and a "seller" by the way. You stated the following: As Marcus Padley wrote about in the SMH recently, you don't see any qualifications to sell property and you can pretty much say what you want, and there's no legal requirement to disclose any commissions you are receiving.

So the moment the "adviser" becomes a "seller" he/she/inanimate object/meat with hands will require a "licence" governed by REIA or relevant state authority protecting the purchaser.

Usually the adviser is the starting point who pre-qualifies the buyer who introduces them to the "seller" who then in turn introduces them to the settlement agent/solicitor/insurance broker/flower selling person/gardener blah blah blah ad infinitum.

Have you heard of this mob? The Office of Fair Trading? Here is a link to the NSW Branch. You might need them.

http://www.fairtrading.nsw.gov.au/ftw/Property_agents_and_managers/Licensing_and_certification.page

Interesting to note that the person that wrote the article is who? Peter Koulizos, Tutor in Property at University of South Australia. Peter Koulizos is affiliated with PIPA.

WHO IS PIPA? My research syd http://www.pipa.asn.au/about-us/our-mission

So an affiliated (PIPA) lecturer spruiking for his company to get more members by writing a trashy article in a barely read online mag is your reference point?

Anyhooooo Low Doc Loans are not that hard to get really ? Oh wait ... ya got to have some brains first.

How to get a Low Doc Loan?

If you're self-employed and looking for a Low Doc Loan there are a few conditions we've put in place to ensure the safety of our investment. These are:

You will need to have been self-employed in the same industry for at least 1 year and supply details such as your ABN and/or Certificate of Incorporation.
The maximum amount you can borrow as a Low Doc Loan is 80% of the value of the security provided.
You will need to take our Lenders Mortgage Insurance if you are borrowing more than 60%.
You will need to provide your Business Activity Statements (BAS) for the past 12 consecutive months verified by the Australian Tax Office (ATO).
You need to confirm that your income has been registered for GST for a minimum of 12 months.
You may be asked to provide 6 months' worth of statements for your primary business or personal transaction account.
Low Doc Loans are available on a limited selection of loan types. Please speak to your lender to discuss available options.
Package discounts are not available on Low Doc Loans.

https://www.commbank.com.au/personal/home-loans/our-borrowing-options/low-doc-home-loans.html