Sydney dominates high mortgage stress Scopical, Australia - Parts of Sydney have dominated a list of the top ten Australian areas suffering the highest level of mortgage stress. Ratings agency Fitch says that it has ... |
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Just When You Thought It Was Safe… (Part II)
Ninemsn, Australia - Even mortgage CDOs are finding buyers provided the extent of prime mortgages within the portfolio are enough to offset subprime risk. … |
A Sunshine Coast mortgage broker has been suspended by her professional association after telling a client that his dog could sign a document required to obtain a loan.
The Mortgage and Finance Association of Australia has suspended Nicky Orchard for three months after investigating allegations aired on TV and in the Daily early this year.
Former client Ben Bracken said Ms Orchard had advised him to commit fraud in order to obtain finance for a property purchase – a claim strongly denied by Ms Orchard.
Mr Bracken said he and his wife signed a contract to buy a property in 2006 and, when they had difficulty securing finance, Ms Orchard suggested they obtain a statutory declaration claiming that they had been gifted $25,000 in order to meet the lender’s requirements.
As a result of a few bad apples, the mortgage broker industry has been plagued with doubt. Entrepreneurs may wish to sit out the controversy until the problems resulting from the subprime lending crisis are resolved.
“The industry is under scrutiny in Washington and state capitols (sic) because rogue brokers have been accused of contributing to the spike in mortgage defaults and foreclosures, by encouraging borrowers to take risky loans and by charging excessive fees,” according to an article in The Wall Street Journal last year.
Mortgage brokers are also among the most common suspect occupations associated with mortgage fraud, along with other finance-related occupations, such as accountants and lenders, according to a 2007 report by the Federal Bureau of Investigation. Because allegations of mortgage fraud are on the rise—Suspicious Activity Reports (SARs) from financial institutions increased by 31 percent during 2007—consumers may be more be inclined to shop for home loans directly as a precautionary measure.
Borrowers may find that working directly with lending institutions is more practical and cost-effective. Tighter lending conditions have considerably reduced the range of options that were once available, and nearly all loan programs now conform to Fannie Mae or Freddie Mac guidelines. Consequently, borrowers may not require a mortgage broker’s services in reviewing their options. Furthermore, cutting out a broker’s “middleman” role may result in better deals between lenders and borrowers, who mutually save on the commissions they would otherwise be paying.
Most of us are only too aware of the profound negative impact that the global credit crunch has had on the financial markets, affecting everything from mortgage lenders and unsecured lenders to credit card providers and more.
Of course, consumers across the nation have been affected by the effects of the global credit crunch, which credit conditions becoming unbearably tight and access to finance becoming more and more restricted. Borrowing has also become increasingly expensive, leaving many consumers out in the cold when it comes to getting finance.