Low-doc loans make up one third of ASIC submissions to Senate

by 20 Jan 2014
The final submissions to the Senate committee’s review on ASIC’s performance are in, and low doc and no-doc loans are a hot topic.

At last count, more than a third of the 400+ submissions received related to low-doc and no-doc loans.

The latest submission, by Rocco Cassaniti, hits out at ASIC for failing to act after he alleges incomes were “grossly inflated” in their low-doc loan application in order to secure funding.
 
“Simply these matters are shrouded in legal protection for banks, hurting the livelihood of the unsuspecting citizen in the process,” wrote Cassaniti.

“With so much evidence against bank inappropriateness, why do we have an organisation who does not protect the consumer?”

A further common theme amongst the submissions was the collapse of Trio/Astarra, which was mentioned in 20 submissions. The failure of Storm Financial received 11 submissions and negligent advice relating to Commonwealth Financial Planning resulted in five.

Overall, less than 40 submissions were related to the advice and financial planning sectors.

Of the 410 submissions received 70 were confidential, 10 were received from academics and academic institutions and 45 from industry bodies, associations and consumer groups. 

COMMENTS

  • by Keith of the west 20/01/2014 9:00:14 AM

    Hang on here banks supported these deals prior to Gfc a share of blame pleae don't just target brokers for writing the business

  • by Hysteria 20/01/2014 9:53:16 AM

    If I'm reading this correctly; the complainant over inflated his income on a low doc dec., which he would have no doubt signed; then got into trouble, then blamed everyone else for what he falsely claimed - and all occurring before GFC?....sounds like everyone else's fault.
    'Nanny State' aside...Personally I've written low docs for a number of years as part of my portfolio, and not one has ever missed a single payment...all having run successful businesses for many years.

  • by Denise Brailey BFCSA (Inc) 20/01/2014 5:25:08 PM

    Banks supported these deals and still do with use of bank generated service calculator to produce englobo figures after the LAF had been signed and NO COPY of LAF ever given to customers. Consumers had no idea. Dear Hysteria: NO the complainant did not over inflate the income - the bank calculator devised the phony income, without his knowledge or consent. I know this person and have seen his documents. Consumers are blaming the banks for approving the fraudulent loan. That's why so many complained to Parliament. Yes noted, they are not blaming the broker who was following instructions from the Lenders and BDMs. In 36% of cases there was no broker involvement.