The AFR is reporting that hundreds of home loans have been backed by fraudulent Chinese income documents, with the help of dodgy mortgage brokers. The banks have informed the police, suspended the brokers concerned, and have changed their review processes.
The banks also make the point that delinquencies are lower on the small proportion of the book which is foreign investor related. The AFR suggests total loans involved are less than $1 billion.
You can hear our comments on the ABC Radio PM Programme.
Recently some banks have stopped lending to foreign investors. This includes Westpac.
This comes on the back of recent media comments on fraudulent changes being made to mortgage applications, and the ASIC review of broker practices and commissions. ASIC recently highlighted one case of broker fraud.
Given that around half of all mortgages are originated via the broker channel, it is no surprise there is focus on brokers conduct. Our recent post on mortgage brokers discusses this in detail.
