Responsible lending an oxymoron

After reporting on the low doc loan scandal last month, the 7:30 report has tonight followed up on the allegedly growing fraud within the industry.

Australian Broker magazine surveyed more than 200 mortgage brokers in the wake of a 7.30 expose last month on fraudulent lending. 85 per cent said banks encourage fraud during credit booms.

» Whistleblower claims widespread loan fraud – The ABC, 12th October 2012.


  1. In the meantime those of us sensible enough to know that there’s no such thing as a free lunch who have only ever cut our garments according to our cloth and know that borrowing against assets carries massive inherent risks, are now paying extortionate and unreasonable rents to avaricious and immoral real estate agents who have pushed up prices to soften the blow for their landlord clients who fell for all the cliches alluded to above. Yet again the prudent are punished and the greedy are rewarded.

    It’s a vicious circle, but until the legislators have the courage, will and dedication to prosecute and punish corporate greed and unethical lending practices – AND we all stop using real estate agents – nothing will change. The media can report as many sob-stories as it likes. It’s car-crash TV and we’re all too dumb to pay attention.

  2. I’m 42, but I’ve known for a decade that I’ll be working until I’m physically or mentally unable to. I have planned for it and I have made investments, but only with money I’ve EARNED. My grandmother told me when I was a child “Never a borrower or a lend be” – boy, was she right!

  3. @Jj, One gets a (huge) mortage (relative to their income), buys an appartment, owes tonnes of money on that old appartment, and then the bucket of freezing cold water slap in the face of realisation that, the appartment was never really yours. The biggest LOL is that it came out the mouth of the Fair Trading Minister. Imaging if that legislation is passed. Oh man! This is funny.

    As for the 7:30 report vid, that elderly couple, why? Why would you blow a good thing to begin with. But when hasn’t many a (silly) person entered into a venture thinking they would come out the winner. Despite deception from financiers, you can always do your own math, simplier than that, arithmetic, and weigh the risks.

    This is not an economy, its’ a casino. And everyone feels they’re rich, they’re it, when they walk into one. Walking out… Well you all saw the vid.

  4. @Graig, don’t usually listen to Alex Jones for fear of going deaf, even on low volumes. Just watched this vid from begining to end. The World is so f[CENSORDED]ked.

  5. Thanks Matt – Excellent link, particurally the argument for NG not helping housing supply. For me, great to see an academic presentation for the AUS housing market, from some one rather than Steve Keen ( whom also does excellent presentations ). I do get the feeling, that in the last 2 months ( especially here in SA with the postponment of Olympic Dam, which was to thrust us into mining riches ), that with the iron ore price decline, we are now starting to see a possible perfect storm starting to come together.

  6. I have a house in Brisbane and have it on a variable loan which is at 5.8% I believe or maybe a bit higher with ANZ. I currently live in the US and just got a variable loan at 3.25% thats right 3.25%……. I wonder if this will ever hit Australia.

  7. Just thought to chip in few words …. It is hard enough for local to get a decent and affordable housing …. It will be even harder for those newly arrived migrants …. especially the refugees…. or anyone that tries to get a new start on the land …. students or non-students alike. The lower level social structure in the society is going to be on a high gear tension …. for years to come ….

    If the government don’t do something drastic soon to contain the housing bubble, the strong AUD, the un-competitive nature of the broader industries …. it will accelerate the calamity for the younger people ….In my opinion … even just to live enough to feed themselves ….

    Strain on the “best” mining employment sector already starts to unravel itself …. It will be not too long for the banking sector to feel the real pressure of deleveraging …. Professional services will take turn to feel wrath on the “isolated” economy ….. I think the best bet will be agriculture … But with so much disruption on the weather lately … I don’t see any saviour on sight …. Will the ballooning superannuation enough to save the day? Or will it fuel more speculative assets bubble …. I don’t know ….

    Brace yourself ppl …. the boat is going to rock very …. hard …..

  8. “If the government don’t do something …..”

    WHEN ARE PEOPLE GOING TO WAKE UP – The Government is not the solution it is the problem. They created this mess on behalf of the powers that be…we allowed it to happen because we turn to governments…The government is not here to help but but to steal and imprison you…..

  9. @Craig ….

    I understand that view …. But we are on the site that are “periodically archived and preserved by the National Library of …”
    Dissent voice … needs to be cenxxxxd or toned down ….. I presume you have seen a lot of Big Brother series … don’t you?

    Unless one is suggesting to overthrow the governxxxx? (for example by inviting gathering etc) The ONLY other way to solve anything …. is to partake however crappy that is ….

    Discussion (academic or non-academic) is the beginning and a civilized or educated way to get the collected views across …

    Don’t get easily provoked …. It won’t do anyone good …

  10. @Yusuf

    My view is simply to not co operate wherever possible, for example not voting…talking about these issues openly with friends, family, etc To question things when you can…change what you can…I challenge the government, ATO etc whenever I can but only at a level where I can make a difference…for example on my CV I state that I do not work for banks or the ATO for ethical reasons, I challenge ATO staff in a diplomatic way etc….to partake does not achieve anything we have thousands of years of history that proves it wrong…what do you think would happen if everyone like myself stated openly that tax is legalised theft….

  11. @belfastdad, I am confident with my own affairs. Keep away from debt, don’t buy a property, always have the means to fund a business if I find one that worth it. Don’t concern myself with what others think of me,… all that kind of stuff.

    As for the country or we the people as a whole, we’ve just seen 15 years of confident behaviour, and I’ve observed that confidence should be for the wise only. All else best stay right away from confidence. But humans seem to be many other things as well as funny.

    Want fries with your burger?
    Get these stainless steal kitchen knives with this ab-doer if you buy now.
    Get a new Ford Falcon v6 with this mortgage.

    None of the above a really good for you.

  12. tax is a way to force people to spend more money than they would, and then for that tax money to be subsidised back into the economy in particular areas, its a way of being able to manipulate an economy to suit a governments goals and objectives, extremely false and transparent, but most people think, hey shit easy money here, and follow the gravy train.


    “Without that government support that’s allowing people with very little down to jump into the ownership pool, you just would not see the ownership rate expanding the way that it is,” he argues. He also believes the CMHC mandate is inherently self-defeating.

    “They don’t provide affordable housing, they provide affordable financing. And when all you do is provide affordable financing, you inflate house prices.”

  14. @Craig

    I like your views (and courage) …. As a token of goodwill, I thought to exchange something ….

    History has taught us many things about revolutions …. I have seen those that go against the “establishment” …. Most of the time, they don’t go down very well …. On some occassions, they replace the “establishment” and at the end …. some of them become corrupted themselves …

    Every recorded dynasty that went up … came down … It comes back again to either …. change of time or …. flaw in human nature …. It is the same on the Main Street or Wall Street …. From the great Napoleon, John F. Kennedy, Kweku Adoboli (fallen trader in UBS) … to the recently fell from grace Mr. Bo Xi Lai debacle (the guy that nearly sat on power pedestal in China) …. Who knows more? … Ironically, there are much more other hidden stories that we never ever heard on the news … If it ever got to media … It was too late or just served as an entertainment for those that are “lucky” not to be on their shoes … The reality is that those “establishment” (however you define it) ….. exists …. Challenging “it” is as credible as upholding “it”. They are socio-constructs that are created by humans ….

    “I do not work for banks or the ATO for ethical reasons” … I salute your stated principle …. Can one hold it to his / her last breath …. even when one can’t provide bread to the table? How about when those personal choice carries weight to the loved ones? What is ethical? In the market, there will be someone that win and someone that lose … Resources are limited …. Human ingenuities are abundant …. However …. eco-system exists before a baby was even born and learned to express themselves ….

    Principle is nice … Self-sufficiency requires more than just an un-bended will but also …. knowlede and skills know-how …. Good luck ….

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