Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans".

These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data.

bogarde73 wrote on Sep 11^th, 2017 at 4:08pm:

Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data.

IF this is true then guess what....THAT'S what precipitated the notorious property market collapse in the U.S.

Mortgage fraud: $500b of 'liar loans' in Australia, warns investment bank UBS


http://www.abc.net.au/news/2017-09-11/500b-dollars-of-liar-loans-in-australia-ubs/8892030


By business reporter Michael Janda

Updated about 2 hours ago
House roofs in suburban Australia, aerial view
Photo: Investment bank UBS says Australian home prices have been boosted by dodgy loan approvals. (ABC News: Nic MacBean)
Related Story: If you lied on your mortgage application, you're far from alone
Map: Australia

Up to a third of Australian mortgages could be "liar loans" based on factually inaccurate information, investment bank UBS has warned.
Key points:

    Only 67pc of mortgage applications "completely factual and accurate"
    Almost 40pc of loan applications through a mortgage broker had at least one misrepresentation
    NSW residents most likely to lie on their loan application

The global banking giant has followed up a survey of home loan borrowers that it first conducted last year, when it found evidence of widespread mortgage fraud.

The latest detailed survey of more than 900 people who took out a home loan in 2017 has found that only 67 per cent responded that their mortgage was "completely factual and accurate", down from 72 per cent of 2016 borrowers.

The vast majority of the mistruths appear to be white lies rather than total porkies, with a quarter of 2017 survey respondents saying their loan application was "mostly factual and accurate". Only 8 per cent admitted to their information being only "partially factual and accurate", and 1 per cent refused to say.

If anything, UBS believes its survey would understate the prevalence of mortgage misrepresentations as some people would be nervous about admitting it, even anonymously.

"It is highly unlikely respondents would have stated that they misrepresented their mortgage application when in fact they were truthful," the bank noted in the report.

Given the average turnover of home loans in Australia, UBS has estimated that around $500 billion worth of outstanding home loans contain misstatements about incomes, assets, existing debts and/or expenses.

With just under $1.7 trillion of mortgage debt outstanding, that means home loans based on inaccurate or fraudulent information account for 29 per cent of the total, and 18 per cent of all private sector debt in Australia.

bogarde73 wrote on Sep 11^th, 2017 at 4:08pm:

Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data.

The banks are not worried because they are quite happy to falsify the records themselves or via a broker who falsifies them. Got to keep the ponzi scheme or scam running at any cost. It's part of Australia's fake economy built on a growth in mortgage debt rather than real wealth producing industries :(

Bobby. wrote on Sep 11^th, 2017 at 7:27pm:

The vast majority of the mistruths appear to be white lies rather than total porkies

:D :D :D

Sir lastnail wrote on Sep 11^th, 2017 at 7:52pm:

bogarde73 wrote on Sep 11th, 2017 at 4:08pm: Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data. The banks are not worried because they are quite happy to falsify the records themselves or via a broker who falsifies them. Got to keep the ponzi scheme or scam running at any cost. It's part of Australia's fake economy built on a growth in mortgage debt rather than real wealth producing industries :(

Hi sir Nail,
it's not fair that I pay the same interest rate as someone with next to no equity &
who has lied on their loan application.

Bobby. wrote on Sep 11^th, 2017 at 7:53pm:

Sir lastnail wrote on Sep 11th, 2017 at 7:52pm: bogarde73 wrote on Sep 11th, 2017 at 4:08pm: Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data. The banks are not worried because they are quite happy to falsify the records themselves or via a broker who falsifies them. Got to keep the ponzi scheme or scam running at any cost. It's part of Australia's fake economy built on a growth in mortgage debt rather than real wealth producing industries :( Hi sir Nail, it's not fair that I pay the same interest rate as someone with next to no equity & who has lied on their loan application.

I don't think turdfull and morriscum are looking to hard. They steer clear of anything that might jeopardize their fake debt ladened mortgage economy.

Sir lastnail wrote on Sep 11^th, 2017 at 8:11pm:

Bobby. wrote on Sep 11th, 2017 at 7:53pm: Sir lastnail wrote on Sep 11th, 2017 at 7:52pm: bogarde73 wrote on Sep 11th, 2017 at 4:08pm: Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data. The banks are not worried because they are quite happy to falsify the records themselves or via a broker who falsifies them. Got to keep the ponzi scheme or scam running at any cost. It's part of Australia's fake economy built on a growth in mortgage debt rather than real wealth producing industries :( Hi sir Nail, it's not fair that I pay the same interest rate as someone with next to no equity & who has lied on their loan application. I don't think turdfull and morriscum are looking to hard. They steer clear of anything that might jeopardize their fake debt ladened mortgage economy.

If we do have a sub prime crisis, property will be very cheap -
I'll buy up many houses for next to nothing.

So if I lie and falsify as much as I can,
just to get the loan across the line.
I can buy a house and worry wether I manage to pay it off later ...or not??

Jasin wrote on Sep 11^th, 2017 at 8:21pm:

So if I lie and falsify as much as I can, just to get the loan across the line. I can buy a house and worry whether I manage to pay it off later ...or not??

That's right & get an only interest loan!

Sir lastnail wrote on Sep 11^th, 2017 at 7:52pm:

bogarde73 wrote on Sep 11th, 2017 at 4:08pm: Funds management giant UBS estimates $500 billion in mortgage debt is what they call "liar loans". These are loans where the applicant, or maybe the broker, has given false information on income, assets, existing debts or other material data. The banks are not worried because they are quite happy to falsify the records themselves or via a broker who falsifies them. Got to keep the ponzi scheme or scam running at any cost. It's part of Australia's fake economy built on a growth in mortgage debt rather than real wealth producing industries :(

Ok...I wasn't going to bother but here it is.

In a nutshell (kinda sorta).

The REAL underlying problem is this :

Mortgage brokers receive kickbacks based on quantity.

They CAN AND DO implement the fudge factor. Why? There is fierce competition within the mortgage industry and it's an opportunity to clinch the deal and thus generate income.

The resultant loans issued by banks etc are potentially high risk. To whom? The mortgagor AND mortgagee.

Re the mortgagee ie the Bank....it can only carry so much potential and more importantly ACTUAL bad debt on its books.

When the above scenario happens on a wider scale ie all over Australia....the banks will try and sustain the pressure of bad debt through off shore borrowing.

This is where it gets scary.

So now the banks are stuck borrowing more $$$ from international sources ie they are now paying interest etc too.

So ultimately....these international monetary sources are effectively carrying these bank's bad debt too. Eventually?

A property crash.

It's happened before. In the U.S.

The system recovered.

But only just.

Will this happen in Australia?

I don't think so.

Why?

We learned a lot from what happened in the U.S.

(Apologies....the above is just a quick summary. )

Bobby. wrote on Sep 11^th, 2017 at 8:27pm:

Jasin wrote on Sep 11th, 2017 at 8:21pm: So if I lie and falsify as much as I can, just to get the loan across the line. I can buy a house and worry whether I manage to pay it off later ...or not?? That's right & get an only interest loan!

1. We have checks and balances here in Oz. They could be better though.

2. An interest only loan is ideal for negative gearing. I know....because we have a few of those.

Interesting.

How did you come to know that Lisa Jones?

Lisa Jones wrote on Sep 11^th, 2017 at 8:48pm:

Bobby. wrote on Sep 11th, 2017 at 8:27pm: Jasin wrote on Sep 11th, 2017 at 8:21pm: So if I lie and falsify as much as I can, just to get the loan across the line. I can buy a house and worry whether I manage to pay it off later ...or not?? That's right & get an only interest loan! 1. We have checks and balances here in Oz. They could be better though. 2. An interest only loan is ideal for negative gearing. I know....because we have a few of those.

Negative gearing is for high inflation and low mortgage times, not now.

Best to buy bank shares they pay a grossed up fee of 8.5% (100%franked) The problem is negative geared loans make up about 45% of the big fours loan books, and THAT is the problem. 

Every now and again they do choose a time and a place to reel their nets in.

And all the poor suckers that hopped on during what appeared to be a good time are doomed.

Every financial crisis is a technical one, if the oligarchy want it to be so.