False or Inaccurate Information on Loan Applications
On the 16th November I read an online news article titled: NAB sack 20 bankers for selling 2300 ‘liar home loans’. Apparently NAB had reported this to ASIC (regulator) back in 2015 & this is the outcome following the findings . An extract from the article read:-
“However, it is understood in the case of the NAB investigation, the loans were organised through the bank's own staff and its Introducer Program.
The Introducer Program rewards businesses — such as accountants, solicitors, financial planners and real estate agents — with commissions for successful loan referrals.’’
There are three takeaways from the above:-
1. There are severe monetary penalties in place for making false declarations in relation to assets/liabilities/income & commitments on loan applications and regular audits of loan files are undertaken by ASIC. Penalties will be applied to banks, brokers and clients accordingly.
2. Sales targets & inducements can create an environment where inaccuracies might occur on loan applications.
3. It’s vitally important for the Australian economy that a high standard of accuracy of the residential loan mortgage book is maintained lest we see a similar fallout as occurred in the GFC with the USA mortgage market.
At COMPASS we do not complete loan applications with false information (to the best of our knowledge). We also do not have direct loan referral arrangements with banks or receive such ‘reward incentives’ as noted above. We maintain a high level of professionalism and value the integrity of our loan book. It is in COMPASS' and more importantly our client’s, best interests to do so.
Contact Michael Clarke on 02 6583 2211