Bankwest/CBA Protest 3:45pm today (18/9/2012) at Sydney, Martin Place

Former members of AC-DC/Choirboys/Angels to perform a free concert in Martin Place today in front of the CBA building. 2013 Australian of the Year Nominee Geoff Shannon to address the crowd. After the success of the Bankwest Senate Inquiry there's talk of a Bankwest Royal Commission with more far reaching powers. I have been contacted by mainstream media for "a chat over coffee" so hopefully the story will start hitting the mainstream media.

 

video from yesterdays protest in front of CBA building
http://www.youtube.com/watch?v=Xn1QDhIG2TA&feature=plcp

video from last months protest
http://www.youtube.com/watch?list=P...L7v1M&v=6Ga5TOfAR8I&feature=player_detailpage

CBA will now sell the Sando for a fraction of the price (usually around 25% of its value) and force a loss, bankrupt the owner and then make an insurance claim and take the cash and add that to their profits. The M3 loss on the loan is a tax deduction on the M1 profit they get from the HBOS clawback provision. The owner of the Sando was never behind on any mortgage payments.

www.youtube.com/BankwestScandal

 

I'm no fan of what Bankwest has done in the last few years (actually it sickens me) but according to the Receiver & Manager the owner of the Sandringham had actually been issued with lots of notices re late payments et al. I would assume this is easily provable and therefore no point for them to lie.

http://www.ferrierhodgson.com/en/Me...ase Sandringham Hotel Situation Overview.aspx

I'm obviously not privy to the nitty gritty and I'm not defending Bankwest by any means but I do think it fair to point out that the statement above re. not being behind on repayments is quite possibly incorrect.

 

Doc Neeson , my hero

 

Hi boyracer. you make a very important point which I will now clarify. This is a good lesson in 'legal-speak-spin-doctoring".

The media brief says he had "numerous breach and default notices." which lead to the repo. People immediately think he must have missed repayments and its his own fault. The media then walk away from the story thinking he's just another whinger who missed his repayments. Nowhere in the media statements does it say he missed his mortage repayments, what they do is manufacture a default using LVRs. They simply get their valuer to revalue the property at a lower amount. ie The bank themselves trigger an LVR default, or they simply say we believe your company documents arent in order and manufacture a documentation default. (ie, what business doesnt have a messy office with a few misplaced reciepts or late tax records). They then charge 20% 'default interest' which the customer is genuinely unable to pay so they can then claim that the customer then "failed to make the agreed repayments". Naturally, they leave this part out of the media statement.

I am unsure about the statement "Several refinance proposals together with an attempt by the customer to sell the hotel were all unsuccessful" however I can tell you in my case Bankwest made it difficult for me to sell my property (They gave me 2 weeks notice of loan termination and wouldnt give me more time even though I showed them I had a signed sale contract with a buyer) so assume they would have placed obstacles for the sale.

Whenever you hear CBA/Bankwest use the phrase "the customer had several defaults", this is a half lie (which is still a lie). The defaults they are talking about are the ones the bank manufactured. Remember that the best weapon in war is misinformation. CBA/Bankwest have been constantly lieing like this in the media which will become obvious in the Bankwest Royal Commission next year.

BTW. I met someone at the Rally yesterday who told me his $24 million dollar project was sold by Bankwest for $200,000. naturally he is suing them. The bank is using their usual tactic of dragging him through the courts till he runs out of money. It has been 4 years so far for him. If one of their lies is easily provable it doesnt matter because they have more money to drag the court case out, so why wouldn't they lie?

I also met some one who missed a loan repayment in 2009 but caught up and has made all repayments since. The bank have now used his 2009 default as an excuse to repo the property now. I am sure any future media statement on his case will simply say "the customer defaulted on the loan".

Hope this helps.

 

They're gunna bring back Bon Scott!?

 

Personally as a customer, I'm a little p!$$ed at Commbank for settling out of court over the Storm Financial case.

not that it matters much as I read today the banks are lobbying the Govt to be allowed to lock our savings into lengthy term deposits as a way of underwriting their dodgey loans.

 

AA thanks for your post. I agree it is difficult to discern from the outside what really went on. Re. the initial defaults I agree they do not necessarily relate to missed repayments and it would seem logical that after the faciliity expired, (punitive) default interest was charged which is then probably why repayments were not made.

Your last para talking about a 2009 default as excuse to repo the loan is odd as there are usually (well there damn well should be) provisions in the loan re. rectification of defaults from both sides. I'd be very curious how any bank could use such a default (long since rectified) as excuse to cancel the facility.

Anyway not trying to dampen what you are doing and I wish you well on your endeavours. Be good to if you could keep us up to date when you can. I am most interested in how this pans out.

re. settlement = agreed

re. bolded sentence = got a link? Didn't see anything about that today.

 

yeah i have several links but don't know how to use multi pages (working from a smartphone at the airport at the mo) but if you go to 'mozo' or search for "banks push term deposits" or somthing similar you'll get a bunch of results from google.

 

Here's one from News.com.au

http://www.news.com.au/money/bankin...r-interest-rates/story-e6frfmcr-1226476863797


But I don't think they are "lobbying" so much as changing their risk profile and clawing back the incentives they gave everyone to switch to internet accounts in the first place.

 

No worries, one of my tasks is to get the story to the public which involves clearing up the smoke-and-mirrors game CBA/Bankwest are playing. I met with Unhappy Banking legal team last night. I have a PDF scan of all documents that prove CBA/Bankwest/Ferrier have lied (Does anyone know how to attach documents to this forum). The bankstatements attached show he was making all his payments. The press release says that the customer didnt pay the land tax which is a technical "land tax default". His bankstatements show he did. He was a bit late because his father was dying. Once the bank find any sort of technical default they then charge 20% default interest which is illegal (ref: current Maurice Blackburn class action on excessive fees - the penalty can only be restitution for any loss the bank suffers, and cannot be an arbitrary amount).

You can see that the customers payments went from $15,000 a month to $45,000 a month. This is then "spin-doctored" to the media as "extending the customers facility" in order to "help" the customer. When the customers naturally cant pay the extortion money the bank say "we tried to help but the customer kept missing his payments". The senate inquiry showed that the reason why they do this so they can maximise the mortgage loss before making a claim on the HBOS insurance.

Its the white collar equivalent of pouring petrol on your car because you can get a better/quicker insurance payout than trying to sell it. The bank needs to "impair" the mortgage so they can make a claim against the HBOS clawback warrantee (proof is in the HBOS annual report). The mortgage loss makes the insurance claim tax deductable. The mafia would be proud.

I am happy to disclose the proof if anyone wants it. This is just one case, there are over a thousand more and growing.

 

Some of my customers had this happen to them a couple of years ago when the banks were "de-risking" their loan portfolios in the hospitality industry.

You read a lot in the news about companies "breaching their loan covenants" (or "have not yet breached their loan covenants") and the covenant is basically an agreement that the company will not owe more than a certain percentage of the value of their business. e.g. a covenant for a maximum of 60% Loan-to-Value Ratio on a $10 million hotel would be $6 million.

What isn't usually explained in the media (and often to the borrowers) is that the bank can change the LVR at their own discretion. Basically "You agree to never owe us more than whatever we say you owe us".

So a couple of years ago, there were some banks (two in particular) who had been lending heavily to the hospitality industry on the basis that is was basically a real estate business that could be run in the same way they were used to dealing with commercial property trusts. The GFC came along, people cut back on spending at pubs and clubs and all the "property managers" who were running these places suddenly realised they didn't know how to run bars and restaurants. The banks saw revenues drop, panicked and - here's the good part - dropped the LVRs on their loans.

If you had a $10 million business with a 60% LVR ($6m), you might have had it dropped to 40% ($4m) which meant you had to cough up $2 million in cash within XX days or the bank would force you to sell the business so they could get all their cash back. And of course you'd get charged penalty interest rates for "breaching your loan covenant" in the mean time.

Of course doing that forced a lot of hospitality businesses onto the market at the same time in "distressed sale" conditions, so asset values dropped as well. That, in turn, led to banks being able to revalue other businesses downwards and put them in breach without them even having to drop the LVRs - you can either change the ratio or change the variables used in the equation to get the same result - so a $10 million business with a 60% LVR ($6m) that gets revalued at $7.5 million now has a maximum $4.5 million borrowing facility. So again, cough up $1.5 million within XX days or you're in breach of your lending covenants.

By using a combination of those two strategies, the banks were able to reduce their exposure to the hospitality sector by a huge amount and escape from their stupid lending model without losing too much cash. Of course they sent a lot of other people bust in doing it but hey, they're banks. That's what they do.

 

^^ Big A.D - don't disagree with what you said but on the flipside a lot of those business people had leveraged up way too far in the good times. They basically exposed themselves to getting shafted by the greedy bankers once the SHTF. The pub market for example had got wildly out of control.

They forgot that the good times is when you pay down debt - not double up on it. As you said a lot of them though they were good mangers - then the tide went out and well, we all know the rest.

I was brought in to a business 9 years ago to help the new owner turn it around from it's dilapidated state. We got it humming nicely on the operational side but he could never get it through his head that constantly running it at maximum debt was silly (he was a spending addict and debt was his enabler). Especially during what turned out to be an amazing but temporary boom in the industry we were in. I was labelled negative for wanting to pay down debt.

I eventually left cause I could see where it was going - took a few more years than I thought but eventually went bust a couple of years ago and I know of a few creditors that dropped a bundle on it.

At the very least it is a good lesson in prudence. I do wonder how long it will take us to forget such a lesson - a long time I hope.

 

Here are the docs that prove Bankwests/Receivers media statements are a blatant lie. The customer was never behind on his mortgage repayments. You can see how Bankwest "helped the customer" by increasing his mortgage payments from $15K, to $50K, which is unlawful. This is so when they repo they can claim a bigger tax deduction from the M3 loss against the M1 insurance payout. Multiply this by 1000's of cases and there is your Bankwest Bailout.

[imgz=http://forums.silverstackers.com/uploads/2237_sando1.png][/imgz]
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Could you by any chance explain the specifics of this or direct me to somewhere that does. I understand what you are saying but not the mechanics of how it all goes together and I figure that is something worth knowing.

 

Hmmm , thread about a bank protest ok. At least 2 non inflammatory threads about a violent riot in the same city a few days before that called for murdering innocent people; both removed without warning or explanation.
- got it.

 

Hmmm. Not entirely sure which threads you mean (I thought there was only the one) which is still up (it started half way through the Black Swan event thread http://forums.silverstackers.com/topic-27955-black-swan-event.html )

 

Here is a basic 4corners background story of behind the Bankwest Senate Inquiry
http://www.abc.net.au/4corners/stories/2012/04/05/3471045.htm
http://www.independentaustralia.net...h-bank-takedown-of-bankwest-customers-part-1/

I personally think this is a great explanation from Mike maloney about the monetary system.
http://www.abc.net.au/4corners/stories/2012/04/05/3471045.htm

Read the Bankwest senate inquiry minutes. Note Bankwests reluctance to answer the question about tax deducting the penalty interest. I'm told by the victims at the inquiry that the Bankwest Representative is not a very good liar, which is one of the reasons why the Royal Commission is being recommended.

http://parlinfo.aph.gov.au/parlInfo...en/6d1c34b3-011e-45da-924e-97a7dec70169/0001"

For an explanation of Australian M1, M3 goto www.rba.gov.au, click on statistics, then "Monetary Aggregates"

also, youtube Steve Keen (professor of economics for Uni of West Sydney) for a good understanding of how fractional reserve banking works.

In short, people think that for a bank to lend a million dollars they must first have a million dollars. In reality, in a fiat currency based fractional reserve banking system they simply open up a spreadsheet (or something similar) and type in "$1,000,000". This is M3 ("invisible credit money"). They then go to the bond markets or term deposit markets to subsequently raise the fractional reserve funds to satisfy Basell III risk requirements. If Bankwest let the customers refinance with another bank they would simply get paid back in more M3 money, so the $1M of M3 lent out is balanced out by the $1M of M3 paid back. The customers account on the banks balance sheet is balanced back to zero. The bank did not want this so they forced defaults so that they could effectively get a bag of M1 "Cash at hand" money handed to them from their insurance from HBOS. (Bankwest never subsequently satisfied their reserve requirements because it now looks like HBOS cut off their funding.)

This is the simplest way of putting it for now, but in actual fact it is more complex. Once the BankWest Royal Commission is announced I can post more.

 

Todays Fin Review. The mainstream media are only now starting to understand that these customers being foreclosed on were never behind on their mortgage. The banks "media statements" are a lie designed to discredit the victims before the Royal Commission.

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The Sando Hotel owners Senate Submission. I have numbered important summary points.

(1) When we sign a mortgage we expect the bank to act in good faith bank (they are a fiduciary entity with obligations to give a fiduciary duty of care). You expect your bank to keep you informed of any changes to your loan and if they tell you "don't worry" theres no problem, you are entitled to a reasonable belief that they are telling the truth. Otherwise it is "deceptive conduct" (criminal breach of corporations act) or unconscionable conduct (civil breach).

(2) the customer was never informed they are going to be foreclosed on. Bankwest intentionally does NOT "work closely with their customers".

(3) he was given seven days to sell the hotel and the bank did what they could to frustrate the sale process by letting the relevant people know the hotel was on "receiver watch". Naturally the CBA press statement left this part out. They simply say "the customer was given time to sell and couldn't find a buyer." The customer managed to find a buyer but Bankwest thwarted his attempts. (I was given 2 weeks notice and found a buyer but bankwest terminated my loan knowing that I could have sold it).

(4) It turns out Bankwest called in his loan a year early. They will try and and get around this with the EBIT technical default notice.

(5) Contrary to Bankwests statement that they "work closely with customers", the banks lawyers won't provide documentation on request.

Abbreviated submission begins.

(1) There was a change of Bankwest legal firm from Angus Begg to Middleton's during the CBA takeover. The loan was reissued during period of CBA takeover and a final Letter of Offer was never issued. Angus Begg has been asked a number of times to produce this document without response. Settlement occurred in Dec 2008. During the GFC period, we received a number of technical default breeches relationship manager advised "everyone gets these/don't worry." Based on evidence extreme drop in property valuations figures and provided by Bankwest in senate inquiry, every business on the East Coast would have been in default, based on LVR and EBITDA levels.

(2)
Bankwest 'Working with Customers'
In May 2011 the bank called a meeting and introduced me to its 'financial advisers' Ferrier Hodgson. It transpires that the banks 'business consultant' was in fact a receiver (It may seem nave, but his actual role was never disclosed and I have no experience with insolvency. I simply had no way of knowing). At no time was it suggested that Bankwest were moving to a point of foreclosing. I understood we were just going through a process of review. The key for me here is, with 20/20 hindsight, is that no 'ultimatum' was ever given. It appears the executioner was getting ready behind the door, but I had never been told. I was never given the business decision: "If you don't do 'x' by 'y' date, we will have to foreclose on you. My decisions and course of action would have been very different had I been informed that was the banks intention. The option of the bank foreclosing was never on the radar. They never gave me that information or chance.

(3)
In July 2011 due to the poor price we had been offered for the PME I suggested that the bank extend the overdraft, we would undertake to sell the PME (after the Willkie legislation was determined) and PME prices returned to the higher market value. I was shortly after issued with a 7 day letter of demand to repay the complete facility $3,200,000. Several funding options were immediately sought, as well as a discrete sale through Jones Lang LaSalle. This produced an option to clear our position with Bankwest. A buyer was found "A Sale Heads of Agreement was signed for $5,000,000 with contracts issue to the purchaser by Frank Back @ BVS. The buyer spent $15,000 on due diligence, however, withdrew at the last minute as he was advised hotel by his valuer that the business was on 'receiver watch'. They were referring to Ferrier Hodgson's appointment by the bank who had been in direct contact with the valuer
A sale of the freehold through Kelly & Sons was sought at auction but the property failed to reach a sufficient level to settle the bank. We continued to seek funding options whilst the bank continued to impose unpayable default interest.

(4) Bankwest Receivers
The discrepancy in the loan documents was discovered in Aug 2010 at a meeting with BankWest staff at the hotel. The loan was called in 12 months early in Dec 2010. Original Letter of Offer document reviewed was 3 year term. There was never a final Letter of Offer presented and Bankwest have still not provided 2 year term document, they base this entire action on.
The bank agreed to continue rolling the facility over monthly with the view of renewing the facility at the end of 2012 financial year. No indication was given that this would not be the case.
After issuing the 7 day Letter of Demand the bank increased interest repayment from $16000 to $63 000 including charges, adjusted to $48 000. That is crippling for a business of this nature. How exactly do Bankwest argue this was assisting me whilst in difficulty. It was the cause of my difficulty. An insurmountable burden.
The 'business consultant' appointed by Bankwest to review my position (who transpired to actually be receivers) have interfered with a potential solution / sale of the hotel in September 2011.

(5) Receiver's Appointment
The receivers arrived on a Monday morning knowing my pattern of banking and bill payments. It was a precision plan. I was able to bank my weekend takings, but as I started my weekly process of paying my accounts, I found that my bank account was frozen and I could not make usual payments to suppliers. The money was there, ready to pay them. At Midday, the receivers walked in. They tried to say my accounts were in disarray. They weren't, until the receivers took over. I still have not been supplied a copy of original loan documents, despite a number of
requests over 4 weeks. The lawyers are simply not responding. Yet this is the document that the entire present situation is based upon.

CBA and Receivers Breached privacy gross and audacious breach' of my privacy in response to the public campaign highlighting situation. 'Extensively reported CBA media releases stating I was in breach / default through missed interest payments. It appears it was a deliberate strategy, in an attempt to lose us both media and public credibility / support.

The receiver served notices unnecessarily upon my chronic schizophrenic sister in full knowledge of her condition. I believe this was deliberate a tactic used to hurt me
emotionally. It worked. I understood we were in good faith negotiations with the head of Bankwest legal up unto that point. They were clearly just stringing us along.

Close
The process with receivers has been secretive, deliberately disruptive, bullying and
dishonest. I believe Morgan Kelly of Ferrier Hodgson is without conscience.
The bank and receivers have unbelievable power and a ruthless process in place. I feel like I've played a rigged game. The bank has been a smiling assassin. They can change the rules mid-game and your average businessman does not have a thread of hope. This didn't need to happen. How can a bank simply decide that a business which is successfully servicing its debt can flick the switch and ruin a family. At this point, I cannot see how our family can ever recover from this injustice. Everything I worked for to build that dream was taken away by a lie, by my business banking partner Bankwest. It's Un-Australian

submission ends.

My summary.
This is how a bank intentionally "impairs" your loan so they can make an insurance claim against it. Hence the analogy of "driving you car into a lake to get a bigger/quicker insurance payout".