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Wednesday, 11-Sep-2013 03:06 Email | Share | Bookmark
Low-doc Loan Market Too Juicy For The Big Banks

 The Reserve Bank is concerned that, as the home lending market slows, banks may consider non-conforming lending as a growth market. In fact, NAB and St George have already been touted as buyers of Liberty Financial. ANZ admits the non-conforming market is an area the banks can't ignore. "The growth in that sector of the market is not lost on us, but it is not an area that fits easily with the ANZ brand," an ANZ spokesman said. A spokesman for St George said it would consider any acquisition on its merits, but pointed out that the credit quality of its loan book was one of its biggest selling points. However, one of the banks could buy a non-conforming lender and keep it operating under a separate brand. For the moment, the banks are content to build up their share of the low-doc market. Macquarie Research analyst William Ammentorp says the risks involved in low-doc lending are manageable. He cites research by Bluestone Mortgages showing that a high number of self-employed borrowers live in the wealthier suburbs of Sydney and Melbourne, including Vaucluse, Manly and Brighton. <br>For the original version including any supplementary images or video, visit

Low doc loans

And this, despite Denise Brailey's claim: "There is not one clean LAF among my 1200 members." ASIC refers many of its lending complaints to FOS, which is a private complaints bureau funded by the banks and financial institutions. At the moment FOS is dealing with a 'spike' in low-doc matters, the Financial Ombudsman Philip Field told BusinessDay on Friday. Field said the banks, in some individual cases, may be responsible for flawed low-doc loans but mostly - and critically in a legal sense - the mortgage brokers, who introduced the bulk of the loans, had acted as the agents of the customer rather than the bank. Taking a broader perspective, the banks and the non-bank lenders, the regulator ASIC and the Financial Ombudsman Service are on one side of this argument and Denise Brailey is on the other. It is the might of the corporate establishment and the government versus the 70-year old pensioner from outback WA. But this lone ranger is onto something. For one, the banks and regulators are not handing over information to borrowers about their own loans: principally, the LAFs. <br>For the original version including any supplementary images or video, visit

Record-Low Rates Keep Australia Loan Arrears Stable, Fitch Says

STEPHEN LONG: The allegations centre on low doc loans. They were initially designed for the self-employed and small business people, recognising that they can lack documents such as pay slips, group certificates and the certainty of income banks demand for conventional lending. But low docs became a free-for-all. KATE THOMPSON: They were very tight to begin with. You couldn't do this and you couldn't do that. And eventually, they were absolutely shocking. No rules at all. <br>For the original version including any supplementary images or video, visit

Missing pieces in a low-doc lending trail that shattered lives

The proportion of prime home loans between 30 and 59 days late was at 0.59 percent, the lowest post-Christmas level since March 2006, the ratings company said in a statement today. Mortgages more than 30 days late rose to 1.48 percent in the first three months of 2013 from 1.46 percent in the fourth quarter of 2012, it said. Australias macroeconomic environment will continue to remain stable in 2013 due to low levels of unemployment and strong gross domestic product, analysts led by Hai Duong Le in Sydney wrote in the report. Low interest rates will continue to assist borrowers serviceability and ease the debt burden. The Reserve Bank of Australia lowered borrowing costs by 2 percentage points since November 2011 to 2.75 percent, and the unemployment rate fell to 5.5 percent in May from 5.6 percent in April. Almost half of all borrowers surveyed by QBE Insurance Group Ltd. (QBE)s lenders mortgage insurance unit were able to get ahead on repayments last year, thanks to the central banks rate cuts, the company said this week. Self-employed borrowers are lagging others, with delinquencies rising to 7.57 percent in the quarter ending March 31 from 7.05 percent in the prior three months. Those with low documentation have taken longer to adjust their spending and cure arrears due to the lumpy nature of the cash flows, Fitch said. <br>For the original version including any supplementary images or video, visit

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