In an era of booming house prices and fierce competition for properties, tales of Australians pushing the envelope with their mortgage applications – usually by fudging expenses to maximise borrowing power – have not been uncommon.
Investment bank UBS released a survey last month looking at how rigorously banks assess borrowers, which included asking if people fudged some part of their loan application. The survey of 860 people concluded that 37 per cent of the mortgages on Australian banks’ books were misrepresented loans, down from 41 per cent a year earlier, suggesting a “modest” improvement in lending standards.
ANZ chief executive Shayne Elliott dismissed these claims on Wednesday, saying the survey was done using a “really small” sample, and it had a “ridiculous” margin for error, given the bank actually has about 1 million customers. “Is it a liar loan, or is it being encouraged by mortgage brokers, for example, to present your information in a particular way because they know how to get it through the system?” North says.
Hempton, of Bronte Capital, puts it this way: “The question is how far can the Reserve Bank push up interest rates before they cause real pain in this economy? And I think the answer is not very far.”
clancyyeates
clancyyeates The greatest economic catastrophe since the Great Depression was only 10yrs ago and was caused by “liar” loans, otherwise known as subprime loans. This can’t be a serious issue surely?! I’m gobsmacked. This obviously was never taken seriously in Oz
clancyyeates May God continue to bless you Julie_fx_trader, I never believe it's going to work out because I have lost alot in different places I Know one day they will face the judgement. I really appreciate Julie_fx_trader
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