In relation to (The Government wants to make it easier for you to get a mortgage amid the coronavirus recession — but there's a catch - ABC News)
The Federal Government said the current credit laws are outdated, particularly given the economy has been plunged into recession because of the pandemic.
Outdated? They’re barely 10 years old. For some of the banks, they won’t be 10 years old until January 2021. They were and are ground breaking laws that exist for the public good. You don’t respond to a recession by attacking the most vulnerable.
Borrowers would also be made more accountable for providing accurate information to lenders under the new laws
They already are. Speaking from experience, AFCA and FOS & CIO before them would always take into account bad borrower (or broker) behaviour where false information was provided.
Reserve Bank governor Philip Lowe has also weighed into the debate, telling a parliamentary committee last month the legislation needed to be examined again.
“The pendulum has probably swung a bit too far to blaming the bank if a loan goes bad because the bank didn’t understand the customer.”
Cry me a river, you disingenuous con artist. It’s not about understanding the customer, it’s about running the (very basic) numbers. Instead of giving loans based on what you imagined they spent (coughHEMcough), you just have to ask simple questions and then ask for proof. ‘How much do you earn?’ the application form might say. ‘How much are your repayments on all other debts and what is the max limit of those debts? Do you send money overseas or support any other family members? Do you have any other expenses or regular payments not listed in your application?’
Boom. That’s it. You have now ticked your obligation to “make reasonable enquiries”. And if the customers give you wrong figures or fail to provide the documentation you asked for in order to take “reasonable steps to verify”, then no matter what - you’ve won. Refuse the loan until they do, easy. You know they’re desperate, that this isn’t an investment made by a clinical expert but rather a wide-eyed newbie who often lacks basic financial literacy and has their eye on a dream home and whose head is full of visions of future renovations and children and retirement life etc.
Or, because you really do want their money and don’t want them going to a competitor, check their credit file and any bank statement you have access to and approve it anyway. After all, if it ever gets to AFCA, you now have written proof that you “took reasonable steps” and therefore upheld your miniscule legal obligations.
Because no, despite what the banks might like to whimper and cry, they are not expected to see the future and prevent loans that will “go bad” except in circumstances where the numbers, right from the start, just didn’t add up.
But the Government said strong consumer protections would be maintained under the law changes and credit providers would still need to comply with their existing licensing obligations to act efficiently, honestly and fairly.
Yeah. Except it’s so much harder to prove ‘honest and fair’, isn’t it? And it’s easy to say they were ‘honest’ about their fees and interest and overall cost and ‘fair’ in accepting the information given to them and that it’s really all the fault of those foolish uneducated, inexperienced borrowers who agreed to place mum’s home as collateral for the risky loan the bank eventually approved.
“The key point is that consumer protection will stay in place,” Mr Frydenberg said.
"But our current regulatory framework, with respect to lending, is not fit for purpose.
“It’s become overly prescriptive, and responsible lending has become restrictive lending.”
Mr Frydenberg, I hope you will understand and forgive the severity of my next statement, but if you were on fire, I would wait until you burned to death before pissing on you.
- a mix of sensationalism, misrepresentation, misleading statements, and hypotheticals.