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Banned broker: I’m a scapegoat

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Australian Broker | 11 Oct 2012, 08:00 AM Agree 0
Banned Sydney broker Athol Halvorsen hits back at fraud allegations from ASIC, telling Australian Broker Online exactly who is to blame
  • BradQ | 11 Oct 2012, 09:51 AM Agree 0
    mmm.... I dont see how ASIC can ban him under NCCP for something that was prior to these regulations coming into effect.
  • Moonae | 11 Oct 2012, 10:32 AM Agree 0
    Rattle that sabre ASIC. Destroy the Broker to prove whose boss and then don't go after the Bank whatever the evidence as you don't have enough money in the tin can to fight the Bank on a justice principle. Terrible situation just proving that ASICs role in NCCP enforcement is unjust and focused on crushing ants rather than championing responsible lending "industry wide"
  • Geoffw | 11 Oct 2012, 10:35 AM Agree 0
    It seems that lenders need to start doing their own checks. All my clients are contacted by our funder by phone to verify information contained in the application before issuing the approval. This conversation is recorded. I can't believe more lenders aren't doing this?
  • broker | 11 Oct 2012, 10:36 AM Agree 0
    Brad seems to have a point here, however, surely Julia's legislation can't be wrong in its capacity to be enacted anywhere and everywhere that her minions feel some big bad financial tyrant has ripped off some poor unsuspecting customer. Must be those misogynist (male only of course) brokers who need to be brought into line, or in Athol's case, sent to the salt mines.
  • Greg | 11 Oct 2012, 10:38 AM Agree 0
    This story, if true, highlights the need for advisors to keep thorough notes and have extraneous notes and all pages of the loan application, at the minimum, initialed by the borrower so that these allegations can not be left in any doubt as to their falsehood.
  • ssmith3104 | 11 Oct 2012, 10:41 AM Agree 0
    Good example of why I left the industry when the new rules + licensing regime came it. All too hard.
  • BJ | 11 Oct 2012, 10:46 AM Agree 0
    Is it time all brokers took a serious and long look at their comments.

    Fraud is Fraud, Pre or Post NCCP.

    The entire industry is amidst a significant change, greater and warranted regulation, education and professional standards and far greater competition from new and sophisticated business models.

    Rather than shoot the regulator for applying their powers, look critically at the industry and seek change and oust those which give rise to industry critisism.
  • Steve McClure | 11 Oct 2012, 11:10 AM Agree 0
    Not passing judgment on the case, but it brings to light an issue of duty of care and conflicts. In the cases where an FP or developer or agent refers to a closely aligned broker, is it OK for us to say "I don't recommend investments etc"? The consequence of the value brokers add over the internet or other impersonal services, is that we act in OUR CLIENT'S interests - not simply the sheer prospect of revenue. The fact is that legislation presumes consumers as dunces, overriding even the law's onus of a reasonable person. That why we can't just rely on saying "the consumer signed it so I'm absolved". Even before the NCCP, consumer regulation demanded extra care - and low docs will test it every time.
  • Mary | 11 Oct 2012, 11:19 AM Agree 0
    What value did the broker add if not to ensure the borrowers could afford the loan?
    The financial planner was responsible for the investment advice but the broker was responsible for the loan advice.
    It seems that everyone wants to get paid for their advice but no one wants to be accountable for it.
    What was he? An order taker?
  • Walterf | 11 Oct 2012, 11:20 AM Agree 0
    I have no activity within mortgage broking or financial planning. But lets face it if you are a small business owner you have no ability to fight the ASIC as their resources run deeper and will financially clean you out. Small business are an easy target to get results.

    If the financial planner was the facilitator and director of the process, how could the mortgage broker be implicated as his role was to organize the mortgage at someone else's direction. Then if the lender sent the client the forms to read over and approve, then how does that fall at the feet of the mortgage broker?

    What did the fraud conviction cover? Falsely gained commission because if it was anything else it would imply that he acted in cahoots with the Financial planner or even the client themselves to defraud the bank of funds.

    If the client could not speak English to the required level to understand what they were signing, what effort did the bank make to ensure that what they were asked to sign was sufficiently understood?
  • Peter | 11 Oct 2012, 11:35 AM Agree 0
    To Mary on 11 Oct 2012 11:19 AM

    Bit rough Mary! The broker says he was advised the numbers (income, profitability, living expenses etc), from the Planner as he trusted him/her at the behest of the clients. How often have you received information from an accountant and accepted it as gospel? What evidence do you have that the P&L's and Balance from accountants are accurate? The answer is none! When we do a tax return via an accountant, we sign a Declaration stating that the accountant is not responsible for the accuracy of the figures. The only person who knows the real truth is the client.
    And that is why I won't touch Low Doc or No Doc loans. Current legislation is such that I am responsible if the proverbial hits the wall regardless of who says what when how or provides the data. This is one hell of a steep learning curve for this Broker and we run the same risk whenever we write a loan, more so if using no or low doc ones.
  • ozboy | 11 Oct 2012, 11:41 AM Agree 0
    Responsibility. That's the word that everyone shy's away from. There are so many layers in the cake, that ultimately, there is no one person totally responsible. However when it comes to the situation where the borrower (can't, doesn't or simple wasn't) wants someone other than themselves to bear the brunt of their (bad?) decision it will always be put onto the weakest link. If that is you the above will happen. Telling ASIC that someone else supplied the information, that the borrower had copies etc doesn't push that away, the only way to do that is to walk away from the borrower and referrer. Comments saying that this was/is rife through the industry and also at a lender level doesn't add anything to the situation, at the end of the day, as this case so plainly points out, YOU ARE responsible. It's something you need to take seriously especially with NCCP, it's your name, it's your business, it's your arse on the line.
  • sidbroker | 11 Oct 2012, 01:08 PM Agree 0
  • Papery | 11 Oct 2012, 01:20 PM Agree 0
    Moral of the story...know your client, verify the information, keep detailed notes, never simply 'accept' the info you are fed from whatever source.... cover your ar* one else will!
  • 1martym1 | 11 Oct 2012, 02:01 PM Agree 0
    Spot on BradQ
    This is scary stuff. I dont understand how they can convict under NCCP when the loans were written pre GFC?
    The dragon has always sent out the electronic copy of the application with the loan offers!

  • CW | 11 Oct 2012, 03:06 PM Agree 0
    Nothing wrong with this. Agree with ozboy. Gone are the days of dodgy lo-docs and that is a good thing.
    If you cant verify their income and expenses how you can ensure they can afford what you are recommending.
    I doubt whether the clients were personally interviewed by the broker as it appears there was a reliance on the FP's figures. Asking for trouble there. If they were interviewed and relevant processes followed, there must be some paper trail and verification of figures etc. If not then you play with fire.
    This stance by ASIC will only improve the professionalism of the industry to ensure that Credit Advisers are true professionals, not order taking lo-doc specialists involved in property schemes that have not made sufficient enquiries.
  • Broker - 14 Years | 11 Oct 2012, 05:15 PM Agree 0
    Amazing ... Athol was a victim on 9 separate occasions with 9 Lo-Doc applications via 2 lenders...

    Unlikely !!!

    Well done ASIC. The less on these cowboys in our industry the better for Borrowers and Brokers.
  • Athol Halvorsen | 12 Oct 2012, 11:05 AM Agree 0
    This is clearly an issue that is going to get ever more prevalent over time and let’s face it the relaxed "BANK" lending requirements for a product offered by the "banks" to capture the S/E market share got so relaxed that the entire WORLDS financial system collapsed. So let’s keep it in mind that in 2006 when these 5 clients called me asking for home loans, the process, products, regulation and required broker qualifications were all very very different to what they are now. The standards were set by the banks and that industry adhered. As a result of such relaxed lending being offered by the bank the GFC happened and we are now in a very different world of compliance, loan products and regulation to avoid a repeat of such events.

    The reason they say 9 and 2008 is that in 2008 these clients were refinanced from Macquarie bank lo doc to SGB lo doc to get their interest rate down 3%. if you were in the industry then you would know Mac Bank shot rates to over 11% in 2008 so a refi to 8% was a god sent. 5 clients of which 4 came back to me 2 years later for a refi

    Thank you for your comments and support. I have over 11years broking every day and 1600 plus clients all of which are very happy with my services and their loans albeit apart from the ones that shared a particular FP

    Broker 14years - a cowboy i am not but i do agree with your comments
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