No, at the point of application no contract has been entered into. The loan contract is signed when the loan documents are forwarded to the borrowers, which by the way are often emailed these days.
In any case having an optimistic view of the value of assets held is not a crime, especially when the applicant is not an expert in valuing these assets. It's basically considered a guess by the applicant.
BTW there is a new national mortgage form being introduced. Here is the info from Westpac.
Just thought that you might like to know.
That was meaningless.
Rufus
11 Sep 2017, 07:14 PM
No it won't - every experienced lender knows that applicants exaggerate values, so there are systems in place to check every detail that matters. Do you really think that any bank would trust you to provide accurate information - they don't trust you for one inch. They check all vital information that matters to the loan application.
So people tell us their house is worth $1,000,000 - that can be check to a high degree of accuracy using a desktop valuation. So you say you have $200K in savings - good, show us your bank statements. So you say you earn $150K pa - good show us your payslips and they are checked against the salary credited to your account over the last few months. Will your boss confirm that when he gets a phone call from the bank? So you say you only have one Visa card with a $2000 limit - good, show us your Visa statement and can you explain what the payments to Amex and MasterCard that show on your statement are all about, we want to know those details, as well as the regular payments to your ex and the regular payments for your car loan - what's that all about? Why didn't you declare it?
FFS how gullible are you.
No one cares if they fudge a bit on things that aren't relied upon for income, or security. but if you BS in the loan application on things that matter the bank may tell you to go somewhere else. I find it hard to believe that people would expect otherwise. The loan is the banks asset, Sydneyite is 100% correct and you know it - that was a troll question.
No - I've never said that. Once again you are wrong.
a) You lie to a bank. b)Then you sign a contract with the bank saying that you accept that a default provision is lying to the bank.
Then, when everything goes North Korean, the bank sues you for any losses they make, you cant believe it!
herbie
11 Sep 2017, 08:22 PM
It's your asset mate.
'N your equity in it is your wealth I reckons.
So if ya equity is negative (for wotever reason/s) then ya wealth is negative (on that asset at tha time), and
If ya equity is positive (for wotever reason/s) then ya wealth is positive (on that asset at tha time).
Tho things can change over time as I reckons we all know.
Hmmm - 'N I also reckons some of youse dudes just could very genuinely benefit from attempting ta get ya heads around tha concept of wot a 'material matter' might be - Tho don't ask me; Coz I'm no expert in it ... But reckons it just might be handy for ya anyways.
It's not your asset.
The only thing you can do with it is use it as 'equity' to take on ever greater amounts of debt.
Anything else you want to do, requires the permission of your landlord- the bank.
The only "positive equity" I when you hold it outright, then you not only have equity, you hold credit.
Can you tell me about this "negative equity" thing herbs.
Sounds like a new concept for confusing the perennially scammed.
That did happen years ago, certainly did before the GFC.
Actually on this - I knew someone who used to work for the "100% LVR" lending division in St George / Westpac, before the GFC. The whole division was shut down and their role was made redundant in 2008 or 2009. This was one of the few banks that was even doing this back then. So today as I said above I believe that there is no 100% lending unless extra security / guarantees can be provided.
The reality I think is that credit / lending practices were much looser pre-GFC than is the case now. The opposite few is just wishful bearish thinking.
For Aussie property bears, "denial", is not just a long river in North Africa.....
Actually on this - I knew someone who used to work for the "100% LVR" lending division in St George / Westpac, before the GFC. The whole division was shut down and their role was made redundant in 2008 or 2009. This was one of the few banks that was even doing this back then. So today as I said above I believe that there is no 100% lending unless extra security / guarantees can be provided.
The reality I think is that credit / lending practices were much looser pre-GFC than is the case now. The opposite few is just wishful bearish thinking.
Yes I'm sure they did get used but as a percentage of loans written I would expect it to be small. I never used them but I did write a fair few 97% loans for reasons outlined earlier.
Lending was riskier before the GFC than now. In those days there was a lot more trust put on the borrower. It was generally assumed that people wouldn't act against their own best interests. That has now changed and there is very little trust placed on the borrowers, which in MHO has just dumbed down the lending process and stifled business opportunities for many people.
Prior to the GFC I could write Low Doc loans almost no questions asked as long as the credit record was good, but the thing was the LVR was only 60% and a couple of lenders went to 70% - some non conforming lenders and RAMS on memory.
There were 80% low doc loans as well, but those loans did have questions attached.
That probably sounds risky to many people, but business men and women tended to use them to start a new business. A typical business owner works very hard, they build the business up over a few years, then sell it off at a profit, and then take 6 months off before starting again. With the low doc loans that was easy, they had unencumbered houses so for them it was "lend me a few hundred grand against this house and I'll start a new business"
But now they come back after a much needed break and simply look like an unemployed person who owns a house, so to get money for a new business it's a long drawn out process of writing business plans, cashflows, and all the usual BS that banks want to assess a new business startup - startup finance is difficult to get, there is no history, it's a loan against the borrowers business plans and his/her ability to sell themselves to the bank as a viable business prospect.
TBH I think we are over regulated in finance. Not to say that all regulations are inefficient, but a lot are.
hidflect
12 Sep 2017, 10:27 AM
Still won't address the issue. I understand. Dodge evade, dissemble, distract, prevaricate, delay or avoid, but NEVER lie.
Mate until you can formulate a question in a clear concise manner then I'm just not interest in what you have to say. Put up or shutup.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy