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'Dishonest conduct more common in brokers than lenders': ASIC

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Australian Broker | 25 Oct 2013, 08:00 AM Agree 0
ASIC has pointed the finger at mortgage and finance brokers in its defense against loan fraud allegations
  • Birsbane Broker | 25 Oct 2013, 09:35 AM Agree 0
    Denise Bailey is a loony. I hope the senate never takes her seriously.
  • ozboy | 25 Oct 2013, 09:45 AM Agree 0
    Not sure I understand why ASIC would mention NCCP. Fraud is fraud no matter what year it is carried out. Did they check if these loans were actually used for those purposes or was the box ticked by someone else...just like the income figure?

    Would love to know how ASIC justify's the statement starting "Consistent with ASIC's more recent", some further information to justify this claim would be great.

    I understand ASIC is probably on the back foot a little here and more than happy for them to do what is necessary to "clean up" the bad apples but just like we have to do I would love to see some transparency around their operations with figures released of how many people were investigated from which sections of the finance industry and the term "broker" seems to relate to many many many people who I am sure some of us as well as our associations would not regard as brokers.
  • Keith of the West | 25 Oct 2013, 09:54 AM Agree 0
    What an irresponsible news article!. In another life I managed sales personnal as a Senior Team Leader in a major bank, and it never used to cease to amaze me some of the dishonest behaviour conducted by bank staff, under pressure of course set targets almost humanly impossible to achieve. In one case, an individual lowered the computer calculated tax rates in order to get deals approved. This like so many buried by big corporation without knowledge to the external regulators
  • Country Broker | 25 Oct 2013, 09:57 AM Agree 0
    I seem to recall most of the ASIC actions were against brokers were for matters before the NCCP came into effect . I agree with OZ BOY FRAUD is FRAUD , it may be when a credit representative appointed by a bank or a staff member commits fraud in documentation or in an application , it will never get to ASIC as a complaint or a COSL , the bank deals with it internally ! This is why it is so easy for ASIC to put this assertion in its submission.
  • M C C | 25 Oct 2013, 10:15 AM Agree 0
    It would appear from comments from the ASIC spokesperson that they do not have long term understanding & experience of the operational workings of lenders. Keith is spot on with the fact that corruption & fraud is dealt with internally when it comes to the lenders. Despite that fact, the numbers of those instances should also be noted & tallied by ASIC. In line with Oz Boy, why should the line between pre & post NCCP be drawn in relation to 'fraud'?
  • Ray from WA | 25 Oct 2013, 10:47 AM Agree 0
    The BFCSA Senate Submission is based on allegations relating back to broker and lender activities in a 5-10 year period PRIOR to the introduction of the NCCP on 01/07/2010 when LoDoc lending without ANY income verification was possible and is therefore largely irrelevant to the current more tightly regulated credit market and I believe this was pointed out to the Senate Committee by ASIC during the Hearings.
  • SIDBROKER | 25 Oct 2013, 10:47 AM Agree 0
    ASIC rattling its chains again. That it fellas say nothing that will mean a challenge in any way to the banks. Thats right they have barristers and Solicitors to deal with you lot. Pick on the small fry thats the ASIC way. Bullying would be another term i can think of. Come on Mr. Abbott you have some work to do here as we don`t need aSIC.
  • Ray-Perth | 25 Oct 2013, 10:48 AM Agree 0
    I am sorry ASIC but you are either not looking hard enough or you are blinkered in relation to questionable lender activity. Coming from a long term banking career what some of the bigger lenders are doing now days leaves me breathless and shaking my head !! To me they seem to be pushing the envelope as to what is ethical and what is not.
  • Glynn | 25 Oct 2013, 11:01 AM Agree 0
    I am a bit over Australian Broker issuing continuous streams of totally negative articles regarding brokers. Your articles seem to make us all out to be axe murderers. How about some positive stories about "good" brokers.
  • John Broker | 25 Oct 2013, 11:25 AM Agree 0
    Statements of this kind by ASIC are disappointing, yet are to be expected from a group that is somewhat successful in whipping the little guys, but have been so far hugely unsuccessful in their multiple futile attempts to crunch the big end of town.
    That said, I applaud their removal of any dodgy operators in the broking space. It is just a shame they aren't telling the whole story.
    From lengthy experience in both the banking and broking mortgage space, fraudulent borrowers and bank staff would far outnumber transgressors in the broking world - by a mile. It just doesn't make headlines.
    As a for instance, I am sure many of us could cite examples of loans that do not meet policy for a number of reasons, but somehow strangely pass muster through the same lender's branch network, after some 'creative' manipulation. If a broker attempted the same variation there would be immediate and swift retribution, and rightly so. Pity it doesn't always apply to lending staff.
  • Tim H | 25 Oct 2013, 11:32 AM Agree 0
    Message to all brokers if an applicant comes to you seeking finance and doesn't meet the lenders criteria and you find out later that the branch staff have done the deal report this to ASIC, MFAA, FBAA and your aggregator.
    This perception by ASIC that brokers are worse than bank staff must be proven incorrect.
    Put simply a broker gets caught doing the wrong thing he loses his business and his income stream. A bank staff member gets caught doing the wrong thing they get internal mentoring and re-training and their income is not affected.
    This is not here say. I recently had an elderly couple come to me due to being put in a loan they couldn't afford by a local lender from a major bank. I went to COSL on their behalf. The bank's response was their lender was not a financial planner and the clients should have sought financial advice before signing for their home loan. Senior bank collection manager told me bank staff member would receive further training. Clients had to sell their home !!!!
  • mac | 25 Oct 2013, 12:02 PM Agree 0
    The answer lies in the default rates. Comments please? I don't believe there is any material difference.
  • Broker | 25 Oct 2013, 12:19 PM Agree 0
    Broker Bashing . the new national pastime.

    I am getting rather tired of reading this rubbish, and it is about time that ABO stop publishing this rubbish
  • Broker | 25 Oct 2013, 12:21 PM Agree 0
    And some leadership from the FBAA and the MFAA would be nice....
  • mac | 25 Oct 2013, 01:24 PM Agree 0
    We have seen Asic expel a few brokers for stuff they did pre nccp which is contrary to what they are saying in the above response. I am sure the conversation would go like this....admit guilt and we will ban you for life or plead innocent and you will go to jail if found guilty in court. nice options
  • QEDRisk | 25 Oct 2013, 01:48 PM Agree 0
    What an outrageous statement from the regulator, not not mention totally unnecessary.

    Its statements regarding NCCP and jurisdiction were fair enough and it could have just left it at that. To come out sniping at brokers is childish at best.

    Anyway, they've already told the industry that they don't have the budget to go after the big players so how are they suddenly experts in banks vs brokers if they've never seriously investigated the former?
  • L3nder | 25 Oct 2013, 02:38 PM Agree 0
    It wasn't the greedy bankers that wanted to write a loan for anyone with a heartbeat during the boom years prior to the GFC. Bankers who understood the "rate for risk" motto and priced even low doc's at almost prime rates, or invented products that encouraged slapdash lending, or accredited stay at home mums, chicken shop owners and motor mechanics as mortgage brokers. It wasn't the Mortgage insurers that came up with inovative products with names like "90/10 No genuine savings" or "1 day ABN" that encouraged fraud. It was not the borrowers who went out of their way to commit the frauds to get the money, they were "victims" who's lies should have been picked up by a "prudent lender". It was not the non bank funders who's lending policies caused them to take their bat and ball and call it a day after getting stung by GFC, doubling their margins and artificialy increasing customers rates to well above the market for those that could not afford it to begin with, and ofcourse it was not ASIC who did not investigate any of this after streams of complaints from the industry and customers because according to them they 'did not have the resources to take on the big players". It had nothing to do with the valuers who were BDM friendly in order to get more business. Who's left to blame!!! I know, it's those bloody shonky brokers again!!! And ASIC is showing it can certainly put them out of business for not having a book in the office called , so we will call them the "the problem" and then we can look like we are "addressing the problem".
  • QEDRisk | 25 Oct 2013, 04:50 PM Agree 0
    What an outrageous statement from the regulator, not not mention totally unnecessary.

    Its statements regarding NCCP and jurisdiction were fair enough and it could have just left it at that. To come out sniping at brokers is childish at best.

    Anyway, they've already told the industry that they don't have the budget to go after the big players so how are they suddenly experts in banks vs brokers if they've never seriously investigated the former?
  • Observer | 28 Oct 2013, 09:20 AM Agree 0
    I agtree with Ozboy - fraud is fraud and ASIC should pursue any such allegations regardless of who perpetrated the fraud. However in my experience:
    1. Borrowers are rarely innocent parties - they either actively participated in the fraud or turned a blind eye to obvious fraudulent conduct.
    2. The further from the borrower you get the more likely that fraud will occur. My experience is that the loans a lender originates itself perform much better than those sourced from third parties.
    3. If it comes down to comparing the credibility of the BFCSA/Denise Brailey or ASIC, I would go with ASIC every time. Check out the BFCSA website for an entertaining view of loonies, consipracy theorists, and those with an axe to grind - many of whom are the types of persons I refer to earlier.
    4. Tim H - if your clients complained to COSL and still lost their home doesn't that infer that COSL found no wrongdoing on behalf of the lender?

    As I said above, fraud is fraud, but the majority of fraud in my exerience is perpetrated by borrowers and intermediaries.
  • Steve Broker | 15 Nov 2013, 12:51 PM Agree 0
    Its a shame ASIC + some Govt regulators have no Independence. Just as in USA investigation into GFC/Sub-prime crisis, they couldn't pin it on Wall St Bankers as they have deeper pockets- however sued hundreds of small brokers as they were 'easy' targets and regulators could be appeased by Public.

    If ASIC looked into alleged Fraud Cases or Internal Staff sacking by Bank lenders which is sometimes only available internally, I'm sure this number would easily out number brokers

    How about looking into the potentially illegal practice of Bank 'Claw Back' .. is this fair trading

    Unfortunately ASIC is also victim of influence from those with plenty of dollars and power
  • Denise Brailey BFCSA (Inc) | 22 Mar 2014, 09:27 PM Agree 0
    Commissioner stated "YES Denise, the Banks are the Engineers no doubt about it......"
  • Denise Brailey BFCSA (Inc) | 22 Mar 2014, 09:35 PM Agree 0
    Commissioner stated "YES Denise, the Banks are the Engineers no doubt about it......"

    The evidence I presented to Parliament involves loans written 2007 - 2011 and ASIC know that to be true and why they flew over to discuss the matter." Its why they are now under Parliamentary scrutiny and the subject of their own Inquiry. I do not expect every nameless commentator to agree with me, but many Brokers agree with me. Its the Lenders and when Banks use online forms the broker channel will be reduced. Bank on it. Yes ASIC definitely on the back foot. Lenders have been left unpunished - bad for Industry and bad for Consumers. Yet banks profited from these activities using a service calculator which ASIC is denying to Parliament it was a compulsory instrument. Remember the BDM emails saying "SC must be attached to the LAF or we will not process your deal." We have the proof. I never go anywhere without hard evidence.
  • Mander | 24 Mar 2014, 10:44 PM Agree 0
    Great comment Denise - 5 months after the discussion ended! Your response would not even pass a year 6 literacy test! Self-promoting rubbish!
  • fed up | 20 Apr 2014, 11:59 PM Agree 0
    your the loony brisbane broker... your industry has ruined the lives of many. from what i've read Denise Bailey is assisting people 'save' their lives from the greed of 'your people'... get a real job and not one that is made up of stealing from innocent people.
  • CRT | 22 Apr 2014, 09:29 AM Agree 0
    Why are these comments being published??. Stealing and ruining lives?? Not only rude, abusive and crass but incorrect and defamatory - big voice behind your anonymous keyboard aren't you!
  • fed up | 05 Jun 2014, 12:13 PM Agree 0
    there is no defamatory comments here? they are all the truth? where have you been seriously? cba having to compensate thousands of people in the millions and asic's new submission stating "its all cba's fault, we trusted them' derrrrrrrrrr.
    there is brokers out there that are doing the wrong thing to innocent people and there is noone stopping them... that is the bottomline. asic are having drinks and holidays on our tax dollar
  • Marty McDonald | 05 Jun 2014, 02:08 PM Agree 0
    Common thread about these loonies is they are borderline literate
  • fedup | 05 Jun 2014, 03:22 PM Agree 0
    the only loonies are the ones that think they can get away with stealing other innocent people's money. thank goodness for the senate enquiry, thank goodness for john williams, thank goodness that we didnt leave the 'right thing' in the hands of asic... cba are going down down down... and we look forward to seeing their demise. we hope the rest will follow, every single corrupt broker and banker
  • Natalie Broker | 05 Jun 2014, 05:45 PM Agree 0
    So these loans were between 2004 to 2008 can you stop the 'broker bashing' and targeting brokers as a whole! Thank you! ASIC brought in new compliance to counteract and discourage 'cowboy brokers' of the past! It is time to understand that we are the 'new' compliant brokers of the 'future' who follow the ASIC guidelines. So do not put every broker in the same boat! Try using words like 'some brokers' or 'a small number of brokers' or just any realistic and honest information would be valuable. From memory didnt the lenders encourange anyone and everyone to borrow as much as they wanted to in those days and all you need was a letter signed by yourself, the business owner declaring your income! No wonder there was fraud! Thank goodness those days are gone and compliance is the order of the day for the protection of our clients. Lenders need to act smarter and behave compliantly and take ownership for their new and existing clients, they are the ones who failed the clients!
  • Marty McDonald | 06 Jun 2014, 08:13 AM Agree 0
    Good luck with that
  • Denise Brailey BFCSA (Inc) | 06 Jun 2014, 12:31 PM Agree 0
    We all agree there may be a few rogue brokers but the main thrust of this thread is that the Lenders are the rogues who set up the calculators to calculate "futuristic incomes" which is clearly against the Code of Practice re the APPROVAL of unaffordable loans. In 2002 Colin Neave released a policy to say Brokers are the Agent of the Bank. It is FOS that changed the rules on that after Neave left to become Commonwealth Ombudsman - Read FOS Bulletin # 36. The Lenders are indeed the culprit for the exaggerated incomes and the Lenders intended to avoid liability, pay commissions and suggest brokers were merely joint partners and brokers were to blame. That's what Lenders regulators and agencies told Parliament recently. I was there. Meanwhile older persons with one asset - their home were targeted. Senator Bishop had to ask five times of the regulators: "what happened to cause this 2002 - 2008 problem of targeting pensioners?"
    The Senators want to know what happened. They all want the truth. The new NCCP laws are a grouping of old laws that existed and we won cases prior to 2010. ASIC had power and never used it....hence the Inquiry they now face. The loans under NCCP are starting to implode after 2011. WHY - they are interest only and high risk lending in sub prime fashion that will impact us all. That's the problem and APRA is concerned - well Bloomberg is.....27th May....39% increase in interest only loans. We have found 63 of these loans already - set to implode within 5 years or less - all unaffordable and all approved by Major banks. I can only report to Parliament on what documentation I have gathered. If your work discovered an UNexploded bomb in the finance sector, would you report it?
  • fedup | 06 Jun 2014, 08:51 PM Agree 0
    Natalie, what happened to me by a rogue mortgage broker happened in 2012. So please dont speak when you know nothing and have not been affected? From a life of no worries and free of financial problems my life has become a worry from day to day, i have changed my whole life because of a rogue broker and cosl, fos and asic, all of who ignored my pleas. they know the loopholes and they play them. the broker made alot of money from my "deal" and i was left to pick up the pieces of my life, including the humilation and frustration of not being believed.
    Cowboys? Banks are corrupt, lets face it, why would CBA be facing $250million compensation for poor innocent people if they were 'the good guys'. This is not an old problem, it is still happening, trust me. I am a 'new' victim. Please don't be so naive to believe that all is good in the world... There is still corruption at today's date. We would just hope this Senate Enquiry after years of pleas by many will hear the voices of the innocent.
  • Tony Thompson | 10 Jun 2014, 11:39 AM Agree 0
    Fed Up, I feel for you if a rogue broker has caused you grief. I know nothing of what happened in your situation, so I cannot comment on it. What you must understand that in every industry and profession there are rogues and crooks. To tarnish a whole industry is just wrong.

    I spend a great deal of time and effort in doing the right thing by my clients. To make sure that the loan they are seeking is set up to benefit them now and into the future. As well as working with them if they run into any problems throughout the term of the loan.

    Am I the sole good Broker out there, a saint among the sinners.

    No, I am just one of the thousands that work continually for the benefit of their clients.

    At times we as brokers take on the stress for the clients. To save them stressing. We lose our entire income for the loan we write if the client sells a property or moves the loan elsewhere, within a certain period of time.

    Yes we get paid for the work we do, but isn't everyone in the same boat. Getting paid for the work they do, is part of every day life.

    However, even though you are angry with a Broker for doing wrong by you. To come onto this site, or any site or public forum, and make the comments you made us totally insulting to me.

    I would also think that your comments are insulting to any good, hard working Broker reading them.

    To do this under the name "Fed Up" also shows that deep down in your subconscious you know that your comments are wrong. Otherwise you would use your name.

    If you want to call my industry a bunch of crooks, and insinuate that we all steal money from innocent people, come out and say it with you full name on the post.

    I bet you don't

  • CRT | 10 Jun 2014, 12:01 PM Agree 0
    Could not have put it better myself, well written Tony and completely correct!
  • Broker | 10 Jun 2014, 12:43 PM Agree 0
    Do ASIC actually investigate Lenders????
  • truth | 05 Jul 2014, 07:38 PM Agree 0
    Agree that we need a royal commission into banks. If the banks have nothing to hide about their mortgage brokers and cover ups why do they fight to give out information on clients loans. I have suffered by a small town broker and just about everyone in the town has. I for one will be creating a lot of noise about this broker who employ someone to rewrite client figures for loans. Where is Asic and I know the bank dismissed staff who were involved but the banks wont listen to the victims one of who is a disabled pensioner now living on the street whilst the broker lives in a sea side mansion. Advice from my solicitors is that if the banks are exposed for what they have done the biggest can of worms will be opened and the government wont know what to do that's why the government protects the banks. We need brave politicians to stand up and bring the banks into account.
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