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Mortgage fraud: $500b of 'liar loans'
Topic Started: 11 Sep 2017, 02:27 PM (4,852 Views)
herbie
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Ex BP Golly
12 Sep 2017, 12:51 PM
"Negative equity" is actually "debt" isn't it Herbie?

Maybe it's a new term to make aspirational types feel better about all the debt they carry👌
Debt is the amount of money one's borrowed Golly.

Negative equity is the amount by which the that amount one that one has borrowed, might exceed the current value of the assets one holds.

Leastways that's my general layman's type take on it - Until informed otherwise by them wot's obviously more 'clueier' than me.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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hidflect
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Rufus
12 Sep 2017, 11:11 AM
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.


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.
Nah. I'd rather let you continue in your delusion of self-denial. I figure your attitude is about the average so given it's heading off a cliff of fraud I can wait for the banking sector to implode and pick up the pieces on the ASX and make another motzah. Timing should be good. I'll have maxed out any good returns on the Lithium boom by then.
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herbie
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hidflect
12 Sep 2017, 01:57 PM
Nah. I'd rather let you continue in your delusion of self-denial. I figure your attitude is about the average so given it's heading off a cliff of fraud I can wait for the banking sector to implode and pick up the pieces on the ASX and make another motzah. Timing should be good. I'll have maxed out any good returns on the Lithium boom by then.
It interests me How come all youse dudes wot can make so much money on other asset classes so easy, just keeps popping up on a Housing Market forum agin 'n agin Hidflect - Any ideas on why it might be?

But anyways, I still chooses ta believe Rufus over UBS - They're just mob of filthy dishonest lying predatory pricks pretty obviously; Hmmm - Tha Swiss equivalent ta tha Yank's Goldman Sachs I guess?
Edited by herbie, 12 Sep 2017, 02:29 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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zaph
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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.
Making $7k a day and still can't get a phone account.
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Rufus
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herbie
12 Sep 2017, 02:10 PM
It interests me How come all youse dudes wot can make so much money on other asset classes so easy, just keeps popping up on a Housing Market forum agin 'n agin Hidflect - Any ideas on why it might be?

But anyways, I still chooses ta believe Rufus over UBS - They're just mob of filthy dishonest lying predatory pricks pretty obviously; Hmmm - Tha Swiss equivalent ta tha Yank's Goldman Sachs I guess?
Thanks.

UBS are a large global bank, but they don't provide retail or business banking facilities in Australia, they provide:-

Investment Banking
Corporate Client Solutions
Investor Client Services
Recruitment

link - https://www.ubs.com/global/en/investment-bank/australia.html

As it happens they do have an Australia Fund Manager - how surprising.

UBS Australian Share Fund - https://www.ubs.com/au/en/asset_management/funds-and-prices/ubs-australian-share-fund.html

They have disclosed that they are "underweight" Australia banks in their fund.

Not hard to work it out from there.

They have stated in their survey that approximately one in three applications the applicants understated their expenses or overstated the value of their assets, yet assumed that the banks checks and balances have picked up not even one of those factual errors.

I can't believe people get paid for writing that tosh.

Fact one.
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Edited by Rufus, 12 Sep 2017, 04:08 PM.
Take risks - if you win you will become wealthy, if you lose you will become wise
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Chris
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Rufus your 'fact one' is complete deception again. Have a look at non-performing bank assets leading up to the recession in 1991, they were as low as they are today but the fins yak system was toxic.

You know this and you know that's why your chart is utter deception. When a collapse occurs we'll look at non-performing bank assets a year on and see how it correlates with 1982, in sure they will be identical.
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Rufus
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Chris
12 Sep 2017, 04:56 PM
Rufus your 'fact one' is complete deception again. Have a look at non-performing bank assets leading up to the recession in 1991, they were as low as they are today but the fins yak system was toxic.

You know this and you know that's why your chart is utter deception. When a collapse occurs we'll look at non-performing bank assets a year on and see how it correlates with 1982, in sure they will be identical.
No the chart isn't deceptive, it's telling you exactly what it was like then. Interest rates started 1991 at around 15% and unemployment was very high at 11%
When those two conditions meet nothing else can happen.

You wouldn't have liked those conditions.
Take risks - if you win you will become wealthy, if you lose you will become wise
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hidflect
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Drip drip drip. The banks are fked.

'Not scared':Australian regulator takes aim at powerful banks

- Lot of hubris amongst major banks, management - ASIC chair
- Loan fraud "a major problem" in Australia mortgage market
- "I will be moving on somewhere else" - ASIC chair


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herbie
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https://www.bloomberg.com/news/articles/2016-11-22/the-widow-maker-is-back-as-shorts-take-aim-at-australian-banks

I found the arse end bit of the vid most interesting actually; With it not being too painful to watch being only 2 mins and 28 secs long (including the 15 sec ad that popped up at tha start).
Edited by herbie, 12 Sep 2017, 07:22 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Chris
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Rufus
12 Sep 2017, 05:29 PM
No the chart isn't deceptive, it's telling you exactly what it was like then. Interest rates started 1991 at around 15% and unemployment was very high at 11%
When those two conditions meet nothing else can happen.

You wouldn't have liked those conditions.
To clear up any confusion I was stating Rufus was being deceptive by presenting the chart as an indication our bank assets are sound solely based on non-performing assets after the last recession leaving out how they performed just prior. This data is extremely relevant as we haven't seen a real bone crunching recession since 1991, I'd argue that banks non-performers would be pretty low leading into that recession and didn't raise their ugly head until the economy took a dive.

He was being deliberately deceptive by presenting this chart.

IR at 15% is nothing when your home costs $100k but not having a job would certainly put a dampener on it.

Don't forget those, which was the vast majority, who kept their jobs kept their very cheap homes that went on to now become worth a million plus so no ones crying tears for the very temporary period where they paid 15-17% on their tiny mortgages of 3-4 times their income.

Edited by Chris, 12 Sep 2017, 09:18 PM.
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