Australia’s s…

Australia’s sub prime mortgage scandal grows

 
Claims that Australia’s banking sector is conservative, safe and secure have taken a bath in recent days as evidence has emerged of Australia’s own sub-prime lending scandal.
In April, we learned via the Australian newspaper how Australia’s largest banks are being forced to forgive mortgage debts of borrowers granted loans based on falsified or fraudulent information supplied by mortgage brokers.
Then in June, the Australian followed-up with further reports (here and here) of Australian sub-prime lending, and the battle playing-out between unscrupulous lenders and borrowers.
Now the Senate Inquiry into the post-GFC banking sector has revealed several instances of banks providing home loans to people who can’t afford them, and doctoring the paperwork so the loans looked okay. As well as allegations of widespread boosting in loan approvals.
Perhaps the most shocking of the revelations are instances where the banks have been enticing elderly Australians into Ponzi-like mortgages that they had no way of repaying.
In response to the evidence of widespread improper lending practices and the subsequent regulatory inaction, National Party Senator, John Williams, is now calling for a Royal Commission into the banking sector, noting that “If only 10 per cent of what comes in to my office is true . . . we have a problem and we should have a royal commission”.  

Read more: http://www.macrobusiness.com.au/2012/08/australias-sub-prime-mortgage-scandal-grows/
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