THE Reserve Bank of Australia was ''keeping BankWest alive'' while it waited for its ''saviour'' in the Commonwealth Bank during the financial crisis in 2008. This is the conclusion drawn by Hugh McLernon, a director of the litigation funder IMF Australia, who is spearheading a lawsuit against CBA on behalf of former BankWest clients.
CBA acquired BankWest on the cheap at the height of the financial meltdown in October 2008 and promptly called in a slew of loans from east coast property developers who are now seeking to coalesce in a class action to sue the bank for unfairly calling in their loans.
Mr McLernon's analysis of the BankWest bailout also runs counter to banking lobby arguments that the banks were never propped up by taxpayer cash during the crisis.
The issue of government support for the banks is especially sensitive now since ANZ and Westpac increased their mortgage rates last
TIGHTER lending criteria by banks has made it too hard for first-home buyers to break into the market, real estate agents say.
A leading Melbourne property group has recorded a dramatic spike in potential clients struggling to gain approval for new loans -- with up to 45 per cent affected by new conditions.
Some are turned away because cash handouts from parents aren't classed as genuine deposit savings.
Oliver Hume Real Estate director Gerrard Ellis said the big banks had come down hardest on borrowers.
"Plenty are inquiring, but they are finding it so difficult because of the hurdles the banks have put in place," Mr Ellis said.
He said first-home buyers also could no longer count equity to get loans across the line.
TIGHTER lending criteria by banks has made it too hard for first-home buyers to break into the market, real estate agents say.
A leading Melbourne property group has recorded a dramatic spike in potential clients struggling to gain approval for new loans -- with up to 45 per cent affected by new conditions.
Some are turned away because cash handouts from parents aren't classed as genuine deposit savings.
Oliver Hume Real Estate director Gerrard Ellis said the big banks had come down hardest on borrowers.
"Plenty are inquiring, but they are finding it so difficult because of the hurdles the banks have put in place," Mr Ellis said.
He said first-home buyers also could no longer count equity to get loans across the line.
As I said before, lack of buyers drives prices down. Banks stoping (at this relatively early stage of burst) “the last greater fools” to jump into market will just accelerate crash and eventually destroy the banks (they know they will survive anyway because gov will bail them out)
TIGHTER lending criteria by banks has made it too hard for first-home buyers to break into the market, real estate agents say.
A leading Melbourne property group has recorded a dramatic spike in potential clients struggling to gain approval for new loans -- with up to 45 per cent affected by new conditions.
Some are turned away because cash handouts from parents aren't classed as genuine deposit savings.
Oliver Hume Real Estate director Gerrard Ellis said the big banks had come down hardest on borrowers.
"Plenty are inquiring, but they are finding it so difficult because of the hurdles the banks have put in place," Mr Ellis said.
He said first-home buyers also could no longer count equity to get loans across the line.
As I said before, lack of buyers drives prices down. Banks stoping (at this relatively early stage of burst) “the last greater fools” to jump into market will just accelerate crash and eventually destroy the banks (they know they will survive anyway because gov will bail them out)
by: Anthony Klan From: The Australian April 14, 2012 12:00AM
MANY of the nation's biggest banks -- including Westpac and Macquarie -- are being forced to forgive debts granted on the basis of false information about lenders supplied by mortgage brokers during the last property boom.
Under the scams, which draw parallels with US sub-prime lending practices, a number of mortgage brokers have been found to have substantially inflated incomes of low-income earners to allow them to borrow far more than they were able to repay.
Kate Thompson was one of Australia's top 10 mortgage brokers. She wrote more than $100 million in loans in a single year and, by her own account, was more likely to close a deal with a "hug and a kiss" than a handshake.
Now she faces multiple charges of theft and fraud in a Perth court and her broking operation, Mortgage Miracles, has closed.
Thompson was one of the more vivacious vendors of low-doc loans. The actual loans for brokers such as Thompson came from the likes of Perpetual, Westpac, Suncorp, Macquarie, RHG, ANZ and the Commonwealth Bank.
Things may soon get uncomfortable for some in this low-doc star chamber, should recriminations arise between the banks and their brokers. Defiant and desperate to spread the blame, Thompson promised the State Administrative Tribunal in Western Australia last month she would deliver 15 witnesses to show how bankers beat a path to her office and wrote loans for her customers.
''The banks gave Australia these products so anyone with some equity and a pulse could qualify for a loan,'' she said.
''As a result, tragically the banks are now the owners of that equity and as far as I am concerned the banks stole it from them.''
It won't be as simple as that. When it comes to low-doc loans, there are six degrees of separation between the banks and their borrowers.
But as soon as the tightening does happen, the speed of house-price falls will start to pick up and the downward spiral will feed off itself.
Credit has tightened significantly since 2007. If anything, it's now starting to loosen again, but only a little.
Since 2007 I've bought several properties, and haven't had any issues until recently, when the bank requested me to reduce my LVR on a couple of properties by 10% as part of approving me for a fairly large loan for a new property.
Development finance has been, and still is, quite tight.
The 'sub-prime' issue relates to borrowers' ability to demonstrate financial stability through having regular income, assets and cash. Low-doc and no-doc are the real sub-prime, and Australia (in 2006) had around a quarter of the proportion of sub-prime loans that the US did - from memory Australia had about 4% sub-prime and US had about 16% sub-prime, and our sub-primes had tighter conditions on them also.
Kate Thompson was one of Australia's top 10 mortgage brokers. She wrote more than $100 million in loans in a single year and, by her own account, was more likely to close a deal with a "hug and a kiss" than a handshake.
Now she faces multiple charges of theft and fraud in a Perth court and her broking operation, Mortgage Miracles, has closed.
Thompson was one of the more vivacious vendors of low-doc loans. The actual loans for brokers such as Thompson came from the likes of Perpetual, Westpac, Suncorp, Macquarie, RHG, ANZ and the Commonwealth Bank.
Things may soon get uncomfortable for some in this low-doc star chamber, should recriminations arise between the banks and their brokers. Defiant and desperate to spread the blame, Thompson promised the State Administrative Tribunal in Western Australia last month she would deliver 15 witnesses to show how bankers beat a path to her office and wrote loans for her customers.
''The banks gave Australia these products so anyone with some equity and a pulse could qualify for a loan,'' she said.
''As a result, tragically the banks are now the owners of that equity and as far as I am concerned the banks stole it from them.''
It won't be as simple as that. When it comes to low-doc loans, there are six degrees of separation between the banks and their borrowers.
by: Anthony Klan From: The Australian April 14, 2012 12:00AM
MANY of the nation's biggest banks -- including Westpac and Macquarie -- are being forced to forgive debts granted on the basis of false information about lenders supplied by mortgage brokers during the last property boom.
Under the scams, which draw parallels with US sub-prime lending practices, a number of mortgage brokers have been found to have substantially inflated incomes of low-income earners to allow them to borrow far more than they were able to repay.
I dont thing Australia has anything like the US style Sub prime. Its actually quite hard getting a loan here and interest rates are high and always have been.
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