Considering mortgage default rates are a fraction of a percent, I don't think 30% of borrowers are accessing more money than they should.
Even if a borrower makes a mistake on their application, the bank will verify these details against tax and employment records, so there's nothing to worry about.
You're obviously accounting for the fact the banks lend money created out of thin air on fractional margins. For every $100 they hand out on a mortgage they only actually have about $6.
And that the ABC has already noted warnings that Oz banks are woefully underfunded.
A banking analyst says an international study of capital reserves by Australia's banking regulator shows the big four banks do not have a big enough buffer to protect against future financial crises.
And the vast proportion of this debt is owed overseas.
So NOBODY has the money to pay for these mortgages if they turn sour.
I assume that means you don't bother notifying the bank when your living expenses rise?
What were your words again? Oh yes... "'very honest' would be someone who makes contact with the lender to ensure they have full disclosure of the facts"
I guess 'full disclosure' means only the facts that you decide are important enough to disclose.
No worries Snitchy. Carry on moralising.
You may consider the two things to be of the same importance, the bank would not... why don't you phone them up and ask.. .oh that's right, you are avoiding telling them that their error which you are well aware of is benefiting you financially at a cost to their profits.
Carry on thinking you are in prison shoddy... don't forget to boast about selling those IP's again, how many times can you sell them ?
You're obviously accounting for the fact the banks lend money created out of thin air on fractional margins. For every $100 they hand out on a mortgage they only actually have about $6.
And that the ABC has already noted warnings that Oz banks are woefully underfunded.
A banking analyst says an international study of capital reserves by Australia's banking regulator shows the big four banks do not have a big enough buffer to protect against future financial crises.
And the vast proportion of this debt is owed overseas.
So NOBODY has the money to pay for these mortgages if they turn sour.
You've accounted for all this, yes? LOL.
you are seriously mixed up.
Take risks - if you win you will become wealthy, if you lose you will become wise
Let me see if I have this right. You stated a valuation for your house, the broker upped it, and then some finance company upped it again, and then what happened. Didn't they have a valuation done? Are there 4 parties in this? A borrower, a broker, some other finance company, and then a lender?
The lender will use the valuation, they don't care what you think your house is worth, or what the broker has added, or the finance company, or any other intermediaries in this transaction. there do seem to be a lot of parties involved BTW.
No you haven't touched a nerve. TBH I really don't care much these days what people think. Yes the professionals in the USA were very unprofessional - you really should know this by now, and you should be aware of the differences between our systems and the USA systems. This is history now.
What effect of white lies - the valuer will tell you what it's worth in the real world. Actually he will understate it a bit, but that's the system. Everything worth anything in hard currency or hard assets is verified. You can lie to your hearts content, but it won't make any significant difference, if any.
Seriously I'm quite over people who don't understand the system thinking that they do. Next you will be offering neurosurgery and rocket technology. Do you seriously think the bank will take your word for anything without verification?
Well you have it 1/2 right, but that seems close enough for you.
I offered a guesstimate (with a clear understanding it was a guess) based on an onthehouse.com.au valuation offered... It was as honest as I could make it.. not everyone is as honest (as the survey clearly showed).
Broker upped it based on wanting to up it (and nothing else)
Finance company upped it, based on wanting to up it (and nothing else).
Valuation, which is yet to be done, will be influenced on the upped x 2 valuation of my guesstimate (this was confirmed by the broker)... so it will be skewed upwards from their conservative value... the reason their value is conservative is to give some margin of safety... which has now been undermined by the x2 bump...
So lets assume that the some punters would add 15% to their value (as implied by the survey), add another 15% from the broker, and another 15% from the finance company... you end up with a rather bumped up value for the valuer to then try to justify against when they do their official valuation... multiple this out across the broader housing market and we have a lot less margin than is claimed.
Sure, the valuer will be conservative, but their conservative nature will have to be very conservative to overcome the multiple bumps....
I assume the survey is trying to warn us that whatever margin of safety is assumed to exist as a buffer for shocks in housing are not nearly as large as the officials would think, possibly because so many people in the chain are biased to inflating some numbers to suit their own situation.
Actually, despite your claims about what I think the bank will do, I don't need to think about what the bank (actually finance company) will do, I already saw them bump $30k onto my guesstimate in the email chain that was accidentally sent to me which they have then sent on to the valuer to verify
I don't offer any neurosurgery or rocket science, and I certainly don't put them in the same basket of science that housing finance sits in... the former have minimal margin of error, the latter is sometimes skewed for maximum profits at multiple points in the chain so that the final outcome is not based on science.
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
Well you have it 1/2 right, but that seems close enough for you.
I offered a guesstimate (with a clear understanding it was a guess) based on an onthehouse.com.au valuation offered... It was as honest as I could make it.. not everyone is as honest (as the survey clearly showed).
Broker upped it based on wanting to up it (and nothing else)
Finance company upped it, based on wanting to up it (and nothing else).
Valuation, which is yet to be done, will be influenced on the upped x 2 valuation of my guesstimate (this was confirmed by the broker)... so it will be skewed upwards from their conservative value... the reason their value is conservative is to give some margin of safety... which has now been undermined by the x2 bump...
So lets assume that the some punters would add 15% to their value (as implied by the survey), add another 15% from the broker, and another 15% from the finance company... you end up with a rather bumped up value for the valuer to then try to justify against when they do their official valuation... multiple this out across the broader housing market and we have a lot less margin than is claimed.
Sure, the valuer will be conservative, but their conservative nature will have to be very conservative to overcome the multiple bumps....
I assume the survey is trying to warn us that whatever margin of safety is assumed to exist as a buffer for shocks in housing are not nearly as large as the officials would think, possibly because so many people in the chain are biased to inflating some numbers to suit their own situation.
Actually, despite your claims about what I think the bank will do, I don't need to think about what the bank (actually finance company) will do, I already saw them bump $30k onto my guesstimate in the email chain that was accidentally sent to me which they have then sent on to the valuer to verify
I don't offer any neurosurgery or rocket science, and I certainly don't put them in the same basket of science that housing finance sits in... the former have minimal margin of error, the latter is sometimes skewed for maximum profits at multiple points in the chain so that the final outcome is not based on science.
The lender should be accepting what they are told in the application for the purpose of preliminary evaluation, and then checking it against the valuation.
To be honest what you are telling me doesn't add up. Why would the lender (finance company) change what has been advised to them except when a valuation has been obtained, and why would they tell you they had altered it unless they were happy to accept a computer generated valuation because you have a low LVR, in which case they are using the valuation, and why are you using a finance company - almost no finance companies exist these days except in the specialist field.
Is there a bare trust in this application?
BTW onthehouse are rubbish. I wouldn't use them in a fit.
Take risks - if you win you will become wealthy, if you lose you will become wise
Let me see if I have this right. You stated a valuation for your house, the broker upped it, and then some finance company upped it again, and then what happened. Didn't they have a valuation done? Are there 4 parties in this? A borrower, a broker, some other finance company, and then a lender?
The lender will use the valuation, they don't care what you think your house is worth, or what the broker has added, or the finance company, or any other intermediaries in this transaction. there do seem to be a lot of parties involved BTW.
No you haven't touched a nerve. TBH I really don't care much these days what people think. Yes the professionals in the USA were very unprofessional - you really should know this by now, and you should be aware of the differences between our systems and the USA systems. This is history now.
What effect of white lies - the valuer will tell you what it's worth in the real world. Actually he will understate it a bit, but that's the system. Everything worth anything in hard currency or hard assets is verified. You can lie to your hearts content, but it won't make any significant difference, if any.
Seriously I'm quite over people who don't understand the system thinking that they do. Next you will be offering neurosurgery and rocket technology. Do you seriously think the bank will take your word for anything without verification?
That's all very Interesting.
And yet, 30% said they lied on the mortgage applications.
According to you, the banks would know they lied, but didn't contest it. That seems strange.
WHAT WOULD EDDIE DO? MAAAATE! Share a cot with Milton?
According to you, the banks would know they lied, but didn't contest it. That seems strange.
Why would the bank contest it? If they can prove there was a breach of contract, they can wind up the mortgage and sell the security. If the chumps keep paying their hard earned dollars for something banks create out of thin air, why would you put a stop to that?
The bank is in pole position here. The loan liars are speculating on capital gains. If the gains don't eventuate, the bank sells the security and winds up the mortgage. If the gains DO eventuate, like all degenerate gamblers, the loan liars take out another, bigger loan. From the banks point of view, it's all win.
Speak when you are angry and you will make the best speech you will ever regret. Ambrose Bierce
According to you, the banks would know they lied, but didn't contest it. That seems strange.
How do you know they didn't contest it? The banks would have verified the data and used whatever figures were determined to be correct. If somebody rounded up their income to $100K on their application, but their payslip showed their income was only $98.5K, then the bank would use the lower figure to assess the loan. The borrower probably wouldn't even know or care - they would simply be told how much they could borrow based on the bank's assessment of the application.
"The truth is that there are no good men, or bad men. It is the deeds that have goodness or badness in them. There are good deeds, and bad deeds. Men are just men."
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