Mortgage Shopper

Credit Access: 3 million Australians not good enough for a $3,000 emergency loan

Nearly 3 million Adult Australians do not have access to fundamental financial services, including credit cards, bank accounts & car insurance

Australia's banks need to take a good hard look at themselves

Got a $3,000 emergency? Save yourself the embarrassment of a decline and don't ask your bank!Your family and friends are more likely to respond to your emergency than a bank.

Payday lenders, who will charge much higher rates will fill the gap. And a little known source for smaller amounts can be centrelink, if you are a client.

How can you operate without a bank account today? Move to Woollongong or the ACT!

Parts of NSW have the highest number of people without even a basic bank account.
But the Wollongong region tops the nation, with 7 per cent of adults without a bank account.
The number of adults in Sydney's southern suburbs and the ACT without a bank account is running at 5 per cent, with the National Australian average of 3 per cent of adults.

And that excludes Aborigines and Torres Strait Islanders. If you add those, then up to 43 per cent operating outside the mainstream banking system.

Why do people have problems getting credit or insurance?

Main issues in credit exclusion cited were:

• The cost of basic financial services remains too high.
• The average annual combined cost of banking, credit card and either car or home insurance is $1794. 
• The level of documentation needed to establish an account can often be a hurdle, 
• Many banks won't lend less than $5000 as a personal loan, instead steering customers to credit cards.

National Australia Bank says Australia's banks need to lift their game

The National Australia Bank were part funders of this survey, and NAB chief executive Cameron Clyne says the banking industry needed to "lift its game" by providing affordable products to more people.

"The absence of access to mainstream financial services does preclude people from advancing socially and economically,'' Mr Clyne said yesterday.

When the fridge, telly or car breaks down or someone needs to get to a job interview the banking system needs to improve financial inclusion and community spirit.

Access to credit is improving

While efforts to improve access to basic bank accounts & to promote low-cost credit products are being made, more needs to be done.
The Government has recently chipped in with Federal Treasurer Wayne Swan brokering an agreement with the banking industry to provide free ATM transactions for indigenous people in remote communities. That still leave millions left to help.

Source: Mr Mortgage

Are Australian Mortgage Loans turning Japanese? Yes I think so

Japanese banks prepare to launch a surprise attack on Australian Mortgage Profit margins

Australia's big four banks, CBA, NAB, Westpac and ANZ are the envy of the banking world.

Yet Japanese banks have been in operating successfully in a recession economy for twenty years.Then something happened. A big Japanese builder bought out Iconic Australian project home builder AV Jennings, and the secret profits got back to Japan.

The interest rates they operate on are puny compared to Australian Home loan rates and bank margins. So its natural that they want a piece of the action.

Some say that Japanese banks could get a $100 billion of the Australian home loan market in double quick time.

At the February RBA meeting most financial analysts are punting on a further rate cut to the official cash rate. That normally translates to a similar reduction in mortgage interest rates.However some of the big four banks are hinting at not passing on all of the rate difference, citing rising fundings costs as the reason.

A cynic might suggest that the real reason is maintaining profit levels in a shrinking home loan & credit card finance by Australians.

Japanese banks are all cashed up with nowhere else to go.

Japanese lenders are brimming with low cost cash because of the recession, and the Japanese savings ethic.

Australia's trillion dollar mortgage pie

Australia's trillion dollar home loan market looks ripe for the picking and snaring just a 10% slice of Australia's Mortgage pie. That would give them a $100 billion dollar windfall.

A Japanese Bank raid a cakewalk for four good reasons

1. Australians have no loyalty to their banks. They will change lenders, and do so often.
2. Money talks. Australian home buyers and homeowners are hurting financially mainly because they paid too much for property on the basis of low interest rates.
3. An open Mortgage Broker channel. Single unit and franchise mortgage brokers have established channels that the Japanese raiders can tap into instantly.
4. They could also operate an online channel, as this is how a lot of Australians looking to refinance do their research these days.

2012 may prove to be a tough year for mortgage lenders in Australia, and that means a better deal for Aussie home loan borrowers.

That has to be good news for anyone where home affordability is important, including the real estate industry, the home building sector, land developers, mortgage brokers, as well as homeowners and home buyers looking for a better mortgage deal.

 So will Japanese banks succeed in turning Australian home loan Japanese? yes I think so!

Australian Mortgages: Why we're finding them easier to manage

Australian Mortgages in 2011 from the rear view mirror

The fact that Australian mortgage delinquencies have declined in the third quarter in Australia points to the fact that the worst of mortgage stress may be over.

The return of the saver, and the virtue of saving

This year has seen more Australian households reining in their expenditures, and the biggest fatality of all this is the credit card. Australians seem to be shunning credit card debt like the plague as well as mortgage debt. This year has been credit card debt reduction as the biggest shift to saving has occurred.

That has to be a good thing for everyone, except retailers who have been milking Australians with over priced goods for generations.

The rise and rise of online sales

This year we have seen online sales surge to the point of critical mass, as Australians are starting buy online in a big way, and that has to mean better retail pricing and services in 2012. Even grumpy old Gerry Harvey has capitulated, and has online offers. [Not convinced Gerry, Sorry] If you want to buy superceded stock at new retail prices, shop Harvey Norman is may motto. His ads can shout at me all they like. I have only ever bought duds from Gerry. THat's why I never shop there anymore. But there is a suckerborn every minute, right Gerry?

The 2011 Christmas shopping season

This is one reason I feel that Christmas is going to be challenging for retail. Spending money you are yet to earn is becoming very unwise to savvy Australian shoppers, and those waiting for the Christmas sales to spend their holiday wages are being tempted with ever more attractive pre Christmas sales. And our high dollar means overseas spenders are less likely to come, and have less money to spend if they get here. At the same time cashed up Aussies are flying out and spending on holidays and spending their money overseas. But Australians know that the family home is more important than tinsel and glitter, and so only people with cash in hand seem to be shopping these days.

The banks are a multi-channel money machine

The banks however are doing OK, despite the loss of credit card revenues, and that is due to business loans growing to replace the shrinkage in credit card debt and home mortgage loans applications, which continue to fall away.

So mortgage delinquencies may have fallen, which is good for the banks, but that does not mean that new people want to be roped into 30 years of debt, so we are seeing a fall in housing prices in all capital cities, as interest rates fall and wages rise.

Did Real Estate become a Ponzi Scheme? I think so.

The combination of rising wages, full employment, lowering mortgage rates and falling house prices tells me that Australians have learnt the lesson from the US finance collapse. That Real estate prices can and do get ahead of themselves and must eventually collapse when they grow out of kilter with the wages and supply.

In this respect I feel that real estate price growth has been a massive Ponzi scheme, and that has deflated slowly in Australia, unlike what has occured in the US, the UK and Europe where house prices are down for possibbly a generation.

Suddenly a house is not an investment anymore, it is a way of securing your accommodation for the long haul. Isn't that what a home should be about?

So what will happen to Australia's 1.7 million residential home investors who lose more on their investment every year in the hope of seeing capital gains? Well they are the victims of their own folly. As tax rates have fallen, the attractiveness of these negative gearing schemes was only shored up by one off growth spurt on the early 2000's, and that was on the back of sales pitches historical housing figures that will not be repeated. So all this fluff and puff is behind us.Like all ponzi schemes, the ones holding the baby when the music stops carries the lose, as those out early get to spend their money. What a beautifu swindle! It's not legislation as a crime! So the perpetrators get out scott free.

What's ahead for Mortgages in 2012?

Whats ahead? A flat house market and steady house prices. Maybe a little more price easing. Hopefully a big fall in land prices that is the real problem in home prices.[Ever wonder why the biggest donations to political parties were from Property Developers? Hmmmm.]

Expect to see house price inflation in country areas where the mining boom is happening. Other areas will see falls in house prices I predict. Its already happening in residential land prices in the towns across Australia. If I were buying a home in a country town, I would want a 10 year mortgage with comfortable repayments. Otherwise renting would be my option. A thirty year mortgage only makes sense in the capital cities of Australia today, because are economy and our society is so dynamic, and mobile. You can't shift real estate.

Australia: Experts in Digging Holes and turning dirt into Gold

The great thing about Australia is that most of it is lousy for growing things, but the soil is rich in minerals. So we have become more into digging holes and shipping the dirt off for Gold. Not a bad earner.

What we have also become is the beacon for climate change and hopefully we can transform this into an energy creation earner. More renewal energy means less imports of oil, and less pollution. Can we export energy so produced, or at least the kit to make it happen. I hope so. My Crystal ball is telling me is that energy, clean air, clean water and food will all be at a premium in the years ahead. We should position the Nation for this inevitable future World.

The cost of money will rise in 2012

The banks are trying to warn people, but the Government is pretending not to listen. The Euro crisis, and in particular, the fact that the UK does not want to touch their baby [smart brave move], will mean that France's banks is caught holding that particular baby, so expect to hear the music stop anytime soon. Once that happens we will have a credit crunch, lower RBA cash rates, not all passed on by the banks because the cost of their borrowing will zoom up.

2012? A good time to be a Saver. A good time to be in Australia. Have a good one!

Source: Rick Adlam, Mr Mortgage

Mortgage Lenders: Small U.S. home loan lenders have reform concerns

Mortgage lenders and community bankers across the US are lobbying lawmakers over proposed new federal home loan credit rules as the end on the discussion period looms.

The new mortgage rules seek to reduce risk-taking on mortgage lending, but mortgage lenders say the guidelines could hurt small banks and would be bad for credit markets. The Securitized Lenders rules are part of the recently passed Dodd-Frank "Wall Street overhaul bill".

Mortgage Securitization and home loan lending Rules under contention

Now US finance regulators need to establish guidelines for originators of securitized loans, to prevent the problems that lead to the US financial meltdown.

One of the key aims of the legislation is to reduce risk-taking.

The legislation proposes to do that by enforcing mortgage lenders/originators to hold a 5 percent stake in any debt instrument pooled in the secondary market.

Will small banks leave mortgage lending?

Many people believe that making the lenders partly responsible, and tied to the home loan outcomes will see many banks leave mortgage lending, fearing the consequences of being saddled with "hurt money".

The fear is that many home buyers will be denied access to mortgage credit should mortgage lenders leave the housing market.

Is the 20% down & equity rule too harsh or a healthy safety lending margin?

The law gives an exemption for mortgages deemed to be safe enough and gave regulators the task to define such suitable loans.

Regulators have proposed an exemption for the so-called qualified home loans when borrowers make 20 percent or more down payments or equity in the home for refinance purposes.

Some believe that this should be reduced to 10 percent as 20% would kill home loan lending and home values would sink lower still.

 

Source: Mr Mortgage

Reverse Mortgages: Why Are Big US Banks Exiting The Reverse Mortgage Business

Bank of America and Wells Fargo are not only two of the biggest banks in the US, they are in the top 25 Enterprises in the World. So why have have left the reverse mortgage business within months of one another?

SImple Economics have driven Wells Fargo and Bank of America from the reverse mortgage business.

Both Wells fargo and Bank of America have ceased originating reverse mortgages because the economics of that loan product have come under pressure.

With the two biggest players originating nearly half of all reverse mortgages their departure will leave a big dent in seniors being able to take advantage of these loans in the US.

What are Reverse Mortgage?

It is where the bank buys back the equity of your home, and a method for senior home owners [62+], can supplement their retirement incomes in return for that equity.

Our homes are generally our biggest asset and if you are over 62 years old and require supplementary income to live on then a reverse mortgage may be an option you might wish to consider.

Reverse mortgages allow older homeowners to tap into their their home equity. Instead of the homeowner making repayments, the banks pay the borrowers.

As before, homeowners continue to pay rates taxes and insure and maintain the property. And that is the fly in the ointment. Because many homeowners cannot afford the home insurance and the rates and taxes and maintenance, so the banks risk holding an asset with a falling value and having to foreclose on seniors. Not a good look for a bank, though this is yet to happen currently.

And the other problem is the continued slide of home values in the US, and rising taxes for the homeowner to pay. As a result, banks have noticed a rise in "technical defaults", when homeowners fall behind on their taxes or homeowner’s insurance and maintenance, all of which need to be met to avoid foreclosure. About 5 % of reverse mortgages are apparently in default on at least one of those items.

Falling home prices mean less people can qualify for a reverse mortgage

Less borrowers can qualify right now in any event.  Because falling house prices mean that fewer properties will qualify for reverse mortgages. In many cases a loan modification would make more sense, to save the homeowners from foreclosure.

The final straw is that lenders cannot assess a borrower credit and ability to repay, so banks were flying blind in approving these loans. In fact a lender cannot decline the borrower, because the loan is deemed an asset loan, and as such based solely on the value of the property.

Why Reverse Mortgages used to be such a great idea for lenders and borrowers.

Before the Global Financial Crisis and mortgage meltdown in the US, the typical borrower would get the reverse mortgage, and equity in the home would continue to build as the asset value increased.

This would provide borrowers with more options — like refinancing — should they fall on hard times. Declining home values have changed that paradigm for both bankers and consumers. Borrowers have not been able to pull out as much money.

The final nail in the coffin for reverse mortgage loans

At the same time, the government has also tightened its withdrawal limits, and minimum equity levels. SO with house prices falling it means that the homeowners will get less if anything for a reverse mortgage. This looks like continuing as more home equity goes "under-water".

Both Wells Fargo and Bank of America will continue to service their existing reverse mortgages. Thye just will not originate more of these loans.

Where to go for a reverse mortgage now?

Finding a reverse mortgage lender will be more difficult, but not impossible. The exit of Bank of America and Well Fargo will be felt as they provided nearly half the loans. But the other players are expected to raise origination volumes to cover about half the shortfall. The other borrowers may miss out. For many of them the loan modification route may make more sense.

Reserve Bank of Australia: Rate rise likely due to inflation

RBA ask home buyers & homeowners to carry the "interest rate" can for the economy again.

Australian home buyers and mortgagor homeowners might get punished By the Reserve Bank of Australia with higher mortgage repayments for the mining boom, the Queensland floods and Cyclone Yasi.

Real economy is going backwards

This grim analysis is based on the wider economy going backwards, with house prices falling in all areas except mining boom towns, fruit and vegetables are growing in price rather than in the fields, and the devastation of the Queensland floods will divert construction to remedial and refurbishment damaged buildings and away from building new homes.

These events have given Australia an inflation rate of 3.3% per annum, and that is over the 3% ceiling the Reserve Bank has set as the top line within its framework of control.

Whilst tightening of credit is an important consideration to keep a lid on the housing inflation , I have always thought that in times like these the RBA would do better to make finance and home loans harder to get, by controlling the lending practices of the banks to require higher deposits. The mining industry is relatively small when you look at the employment side of things. But small business and retailing are huge employers collectively and any rate rise will hit them hardest and not do anything to control the investments made by the mining industry.

Is the Consumer Price Index is a "crock".

How do they work out the CPI in the first place? Food, water and utilities is becoming a diminishing part of the CPI basket and food prices, water and electricity have gone through the roof in recent years. So inflation for families is possibly 10% per annum, not 3.3% that the RBA claim it is for the economy. These fake inflation figures more about controlling demands for higher wages than about reporting the rising cost of living in my view. Where are the unions when you need them? Making credit card repayments and mortgage payments higher on top of the highre food and electricity bills burden burden, and at the same time as family payments and welfare payments are targeted for reduction and savings, could fracture the economy down the middle.

Is the RBA toolbox is too skinny.

My biggest beef with the RBA is it likes to keep it simple, too simple in my view. Interest rate control has been its blunt hammer for decades. Haven't we evolved a more complex economy since then that has better more refined solutions. Interest rate rises hurt too many people these days for the result that they give. Controlling banks lending policies seems a much fairer way to control lending and money circulation. Another method might be to offer a rate reduction for people that set a shorter term to repay their home loan. This would force mortgagors into "saving" and take money out of the economy without the need to make homeowners carry a bigger burden without saving money. So whilst economists say that the RBA rate rise is going to happen sooner rather than later, I ask the question why?

Author: Mr Mortgage

Mega Bank profits: Are the glory days of mortgage lending profits over?

The big banks have never had it so good. Will new Government Reforms take this away from them?

Increased Mortgage Lending competition for the big four banks, and major banking reform from the Gillard Government could see the major banks profits shrink.

The problem is that every government reform aimed at the banks in Australia over the last 20 years have eventually added to the bottomline of the big mortgage lenders. Has this been more because of the banks wiles or the lack of foresight of the Government Policy? Maybe a bit of both.

Mortgage Exit Fees: The Fly in the ointment

 Before Christmas I wrote to the Prime Minister and advised her of the "fly in the ointment" of the Wayne Swan proposed solution to our mortgage woos. His solution was a simple one.

Make it a no brainer to switch lenders by removing exit fees on home loans and the rates would fall.

Mortgage Reform problem No 1

The problem was that mortgage managers, the securitised lenders that helped to reduce mortgage interest rates by 3% were the very ones that would be most hurt by the reform.

Why? Because mortgage managers charged the highest exit fees, by way of deferred establishment fees on their mortgages loans

These deferred fees had a sunset clause of about 5 years, so most people never paid these anyway. But it gave a way for lenders to pay mortgage brokers a commission to compensate them for their efforts. Any government reform must address this vital issue. Otherwise it could kill mortgage competition in Australia and set us back 20 years.

Ralph Norris cries Crocodile Tears over the Mortgage Managers plight.

The funniest thing is that the CBA who have all but destroyed the mortgage managers loan sector, with the help of Kevin Rudd's Banking Guarantee support, now says he is hurting for the small end of town. This is just a ploy, but Mr Norris does make the same point I rose last year. 

Australia's Banks. Are they too big to control?

Based on Ralph Norris's [CEO of CBA] comments and the reality of the power and control of the Big Four Banks, its time to ask the unthinkable.

1. Are the banks too powerful to control? 
2. Have they become the Mafia of Austalia, where they can do what they like and still be supported by the government? 

Sometimes the lines between the profit motive, the public good, and business ethics are blurred and this I believe is where we are in the banking debate right now.

The business Power of the banks

A case on point Norris claims that:

The moves to limit excess fees on credit cards and improve credit protections will have a similar perverse effect as far as the reaction from the major banks.

 The new national credit protection regulations means that banks simply have a higher cut off level for those to whom they are willing to provide credit.

Does this not smell of a lender who thinks he owns the lenders and credit space?

If so is he right. I say yes to both propositions!

The law of unexpected consequences

The best intentions of government regulations often create unexpected consequences.

The Government needs to focus more on the purpose of the reform and how it will affect the mortgage industry as a whole.

Any bank and mortgage reform aimed at lowering mortgage rates, and exit fees has to be balanced with the planned growth non bank lenders. That means a no bank involved sector. Not the miss-mash we now have. Allowing banks to own their competitors is a stupid idea that keeps repeating itself in the mortgage lending sector.

 Author: Rick Adlam, Mr Mortgage

Mortgage Brokers and MERS get the blame for Banks wrong doing

Why mentioning mortgage brokers in the MERS mess is so annoying!

I am casually following the mess that the US still finds itself shackled to in 2011 and have just read a New York Times article entitled:

MERS? It May Have Swallowed Your Loan

By MICHAEL POWELL and GRETCHEN MORGENSON

You can read the full article here

Whilst I recommend the article as it contains a lot of useful information, there is a annoying reference to mortgage brokers at the beginning of the article that riles me in quotes.

Mortgage brokers hip deep in profits handed out no-doc mortgages to people with fictional incomes.

Wall Street shopped bundles of those loans to investors, no matter how unappetizing the details. And federal regulators gave sleepy nods.

That world largely collapsed under the weight of its improbabilities in 2008.

But a piece of that world survives on Library Street in Reston, Va., where an obscure business, the MERS Corporation, claims to hold title to roughly half of all the home mortgages in the nation — an astonishing 60 million loans.

Why I believe that Mortgage Brokers aren't to blame?

Well hip deep in profits is a stretch of the imagination. The banks got the money,not the mortgage brokers. Most mortgage brokers are now "broke" 

Why do I find this objectionable? After all Mortgage Brokers were part of this scam.

right? I say wrong, dead wrong.

Firstly you'll see that mortgage brokers have been given primacy in the article, that is they are the first characters to be mentioned in the plot, and portrayed as the people would got the "profit." What a load of rubbish!

Who benefitted most from selling bad mortgage loans?

The Banks that created the loans, as well as Real estate agents and developers, new home builders, and home homers who sold on the highs of the market.

Mortgage Brokers come in a sorry last, but get to be mentioned first, because they seem to be at the front of the line.

Most of these sectors are not given a mention. They got the money and are seen as blameless. But we seem to forget that Real Estate agents made bigger commisions and drove the values of properties up to unrealistic highs. Heights that could only sustained with loans that were given to the buyers that they forwarded to home sellers. Buyers that could not afford to repay those loans.

We are all are finding out that what goes up [too high to make sense] must come down when the truth is outed. Whilst all works of fiction have a starting plot, this is not where the action starts in the mortgage business. It starts with the creation of the mortgage funds, for the purpose of making profit. That would be. let me think... be the banks?

So why weren't these real culprits not mentioned up front where they belong?

Maybe its because the big banks and insurance companies spend a lot of money with the New York Times, and nobody wants to bite the hand that feeds them?

And did Mortgage Brokers have to be mentioned at all? Mortgage Brokers are just comission sales people. I believe that Mortgage Brokers are less at fault in this than the Drug mules that they catch every day in airports around the world, are the cause of the drug problem that developed Nations such as Australia and the US are plagued with.

Because the drug mule is desperate and knows what he or she is doing is illegal and harmful, whereas mortgage brokers thought that they were in a legit business based on trust.

To further the drug analogy, the drug mules are just a small part of the distribution system that is the massive secret narcotic trade.

There had first to be growers and manufacturers of the narcotics and a ready end retailing distribution system of territories of the drugs dealers involved.

Doesn't this sound like the story that the New York Times just painted about what went wrong with the mortgage business in the US that started to unravel from 2006, not 2008 as mentioned in the article by the way.

Except that they are saying that the in their scenario the custom officers were not diligent.

The article made a reference no doc mortgages. If that was the case, then no mortgage broker would have to create fraulent documents to support the  loan application, because none wold have been required.

Why do I say that Mortgage Brokers were not guilty?

Mortgage brokers were basically sales people that had little training in finance. They were paid essentially commissions on sales. Yes they were well off when these "low hanging fruit" sales were being made.

But most did not grasp the big picture nor made the huge profits that the banks made.

There was a saying in the industry that if you did not have a college eduction, then you could still make over $100,000pa  as a mortgage broker.

Many of these mortgage brokers are now flat stoney broke!

So leave the mortgage broker out of the picture and focus on the real creators of this disaster. Make the heads of the corporations that actually got the profit for creating the mortgage mess in the first place, pay for their behaviour.

Article by Mr Mortgage

 

ANZ Bank air outrageous ads on Australian TV, as it desperately tries to stay in touch with the bigger banks.

ANZ Bank ad blunder exposed.

In one of the worst cases of hypocrisy by a bank ever seen by Mr Mortgage, the ANZ uses its own bad behaviour as an example of how customers are treated by other banks. They include using deceit to snare a customer, then being sarcastic and surly with the customer when the customer make a complaint to the the bank assistant.

Great if ANZ Bank was innocent of the practice portrayed and want to exposed but cynical if the ANZ Bank uses these kind of tactics themselves.[And believe me, they do!]

The sad truth is that the ANZ Banks uses the very tactics that they suggest that other banks are guilty of!

How do I know this? Because I was the intended mark of this practice by anz bank last Christmas.

Why the ANZ Bank ad stinks

The scenario of the ad was a victim, a client who wants to complain with the person who signed her up for a bank account. The assistant twists the meaning of the words 'know" and "no" [you, the customer have made a mistake], and says no need to thank me when she is actually complaining about her bad service].

She then goes on to abuse the customer and suggesting that she had read the terms and conditions, and these were full of loop holes and she had signed this agreement. Well that sums up my experience the the ANZ Bank!

Why is Mr Mortgage so angry about this ANZ Bank ad?

There are several reasons why this ad is bad. Its bad for banks and its bad for the ANZ Bank. Why?

1. Most bank customers can identify this sort of behaviour by grumpy bank staff, desperate to make their budgets. So it plays on people's anger, in the hope that throwing enough muck and some of it will stick. The problem is that the muck also sticks on your hands and can bounce back over the ANZ Bank, as it surely will here!
2. Bagging other banks by making vague disparaging remarks or mimicing how bank staff treat their clients in the banking industry generally is bad practice, because it lowers confidence in the banking industry. 
3. People remember the ad, but soon forget who the good guys were, and who the bad guys were. Soon the bad behaviour is associated with the ANZ. The link is "a Bank", and the ANZ Bank are the only big four bank who's name starts with an "a". Dumb move.
4. They work on the theory that no bad act should go unpunished. without checking their own complaints records.

How ANZ Bank treats its own customers

I was a victim of ANZ Bank behaviour that the ANZ bank infers that you get from other banks. [They charged me this three times in three days, for a total of $126 in fees.]

When I rang to complain they  were deceptive, surly and sarcastic, just like they showed in the ad!

The ANZ bank trained girl said that I had agreed to the terms of the agreement and they were entitled to collect the fees. The fees and other monies were covered by payment within days of these small transactions. The first transaction pushed the account to overdrawn a few dollars, but they pinged me $40.00! That a hefty interest on a few dollars over a few days! The total overdraw was under three hundred dollars over three days~ and this was if I recall included the $126.00 overdraw fee.

My response was simple. That this interest charge was excessive, and that whist I may have signed an agreement, I cannot agree to an unlawful contract. That is, the contract is voidable my me if not lawful, and that making excessive interest charges is unlawful. So they should know this, and the contract would be deemed fraudulently unlawful. I said that I would agree to a pay a reasonable interest rate for the overdrawn funds, and that should be a few cents.

I further advised them that it was their mistake to allow the overdraw because that was not agreed, and that if they allowed it again, I would not be responsible for any future charges or overdraws. They tried to say that I was responsible for overdraws, but I stated that in my view the bank was responsible for any money that it forwarded that was not in my account, not me,in the same way that I would be responsible for making unlawful payments to the ANZ Bank. 

After she checked with her supervisor, the "honour fees" were reversed. Many banks have since dropped these fees, maybe because they are unlawful and complaining customers were giving them heat? 

So if you are having problems with surly, deceitful ANZ Bank or other bank staff or being harrassed over unfair contracts let us know here.

Please share this article.

Mr Mortgage

Big banks to profit from market muscle in 2010

Australian home buyers and homeowners will feel the squeeze of the big banks' market muscle in 2010. 

 With the demise of sub-prime lending, the collapse of the non bank lenders and the securitised lending brands now being controlled by the banks,  and tighteneing credit rules by the Reserve Bank of Australia, the scene is set for higher lending margins by the big banks. 

And that means higher interest rates for homeowners with a mortgage, as well as mortgage shoppers.

According to recent Australian Prudential Regulation Authority data The commonwealth Bak and Westpac wrote nearly 60 percent of the home loan mortgage business between them in 2009.

When you add the ANZ and NAB figures in that 90% of all home loans written be the top four players. That is what I call market muscle on steroids.

Small fry, Bank of Queensland, Suncorp-Metway and Bendigo Bank have been left with 1.8 per cent, 2.9 per cent and 2.2 per cent of the mortgage market, respectively.

As you can see there is no space left for the rest of the players in the micro-bank, international bank, credit union, building society, and non-bank home loan sectors.

If I were buying shares in 2010, I would seriously look at the potential rise of profits that this market position offers the big four banks.

On the other hand, if I were looking for the best loan deal, now and next years, I would be looking at a non bank lender.

Rick Adlam, Mr Mortgage