BankWest Senate hearing - Unhappy Banking

Discussion in 'Markets & Economies' started by AustralianAustrian, Jan 30, 2012.

  1. nonrecourse

    nonrecourse Well-Known Member

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    What a brilliant post BB. It is something that sooooo few property investors do....read the contract. There is another clause called the all monies clause. Basically you have mortgaged your first born child to the bank. They have us by the short and curlies.''

    Kind Regards
    non recourse
     
  2. AustralianAustrian

    AustralianAustrian Active Member

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    Thanks to all who have commented. I've noticed in the various media comments about bankwests behaviour that there are two types of people in this debate, those who feel that banks are acting unconscionably/bullying (ie because they can) and those who feel its in the contract there's nothing you can do about it.

    Here is the latest class action against bankwest. Just because the banks are following something in their pages and pages of contract designed to confuse you, doesn't mean in its legal. Its not about bank-bashing as I believe all entities have the right to make as much profit as they want, but it is about holding them accountable for unconscionable behaviour.

    http://www.watoday.com.au/business/...ig-bank-fees-class-action-20120418-1x6dy.html
     
  3. hawkeye

    hawkeye New Member Silver Stacker

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    The problem is that the banks are part of a govt controlled cartel. That's why we get abused. Because there's no real competition as they are effectively tied together.
     
  4. AustralianAustrian

    AustralianAustrian Active Member

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    Update on BankWest Senate inquiry-

    All senate submissions have now been posted on the Australian Govt website
    http://www.aph.gov.au/Parliamentary...onomics_ctte/post_gfc_banking/submissions.htm

    Of the 151 submissions (including a 414 person class action submission), about 10-ish are general discussions on banking, 5-ish are complaints about other banks, 5-ish are general whinging bank-bashers, the remaining 130 individual submissions and one 414 person class action group submissions are all about what Bankwest did to their customers in order to affect the sale to CBA in 2008. If you want proof that Australia is no different to the rest of the world I suggest reading through these. If you want to skim read the PDF's you can do a keyword search for "repossessed", "bankrupt", "receivership", "administration". Submission 54 and 118 and are could summaries of what happened.

    You will see from the submissions that the allegations made of Bankwest relate to civil and criminal breaches of unconscionable conduct and deceptive practice laws (Trade Practices Act , ASIC Act, Corporations Act) . The reasons why most of the submissions are 'confidential' are because Bankwest have been threatening people with bankruptcy and injunctions if they co-operate with the senate inquiry or appear in the media. The senate research office confirmed this to me as well. The only way this can be exposed is with the protection of parliamentary privilege.

    If you want to see a simple example of how Bankwest are trying to spin this and cover it up, read this media release. Click on "Bankwest's Response" to the article below.
    http://au.news.yahoo.com/today-tonight/money/banking/article/-/12917249/unhappy-bankers/

    Their statement says "the suggestion that Bankwest forced customers into receivership is absurd". Now compare this statement with all the submissions on the inquiry website and you can see that this is a lie. My company was forced into administration by Bankwest and I was also forced into "voluntary bankruptcy" last year. In short, I had a property worth multiple millions of dollars which was meant to be my retirement nest-egg. Bankwest repossessed it even though I wasn't behind on my mortgage and sold it for 50% of its value and then bankrupted me for the residual amount + fees even though I had a sale contract signed for a sale that would have been enough to pay the bank and get some of my deposit/equity back. The banks repossession agent rang me and said "We expect you to go bankrupt, you can do it yourself or we can do it for you".

    At the time, this behaviour didn't make sense, but now that I have read all the submissions and various media reports (ABC, Today Tonight, Alan Jones, The Australian) I now know that Bankwest was Australia's "Lehman-moment". In order to survive Bankwest needed a bailout/buyout. A warrantee clause in the CBA sale contract allowed them to claim a discount on the sale price from Bankwests parent company, HBOS, if they defaulted certain properties within a certain timeframe. Bankwest then aggressively started using all methods of default available to them to compel people to default .i.e., colluding with valuers to cause a LVR default, assigning forensic accountants to look for trivial documentation oversights to cause a 'documentation default', cross-defaulting a third party related to the contract and more including "starving people out" of their properties (Ref: Submission No 40).

    If I hadn't had gone through this myself I never would have thought this could happen, and I would continue thinking that these victims are just whinging bank-bashers.

    This behaviour is now recorded in the Wiki pages (see link below). BankWest are getting their lawyers to try and remove this so keep a screenshot before this happens. You can validate its accuracy with the link I provided above to the senate inquiry and details from the www.unhappybanking.net.au website.

    http://en.wikipedia.org/wiki/Bankwest

    http://en.wikipedia.org/wiki/Commonwealth_Bank

    The reason why the Unhappy Banking class action group had to use a .net.au web address is because Bankwest bought out the www.unhappybanking.com.au web address a few months before the action was setup.

    At the time of my repossession I was working for the CBA. At time of my bankruptcy last year I was working for ASIC and was forced to resign. Unfortunately I fear that the reason why Bankwest/CBA did this is they know that no banker has gone to jail in the USA or EU so it's safe to say they know that no-one will get prosecuted in Australia, but the best I can hope for is that what they did at least gets out to the general public. According to the ABC 7:30 Report, one of the main architects of the sale to CBA was a man named Ian Narev In 2011 he was promoted to CEO of CBA.
     
  5. Kawa

    Kawa New Member

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    Dude keep your head up and be proud.I know 2 real estate guys with rent rolls that had their loans called in the same way.

    I hope all gets better for you.You have been treated poorly.
     
  6. nonrecourse

    nonrecourse Well-Known Member

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    Everyone should go in and read many of the parliamentary submissions from individuals who have been screwed over by all the banks not just bank west.

    If you are going to borrow money and negative gear property, you need to do it with a plan A, B, C and gulp D:(

    Plan A is your plan to grow rich slowly.

    Plan B is when things go wrong but you change your approach because of unknown or unanticipated factors so that you can continue to meet all your obligations.

    Plan C is when the bank comes in and bankrupts you despite all your best efforts to meet your obligations. Plan C ensures that when the bank tries to strip you of all your assets they do indeed give you a hell of a beating but... you have an SMSF that your creditors cannot access.

    Of course when you are bankrupted you can no longer act as a director or be a trustee that means your SMSF transitions across to an APRA small super fund with a trustee that you have handpicked prior to going bankrupt which is plan D.

    People don't plan to fail but they do fail because they don't plan.

    Kind Regards
    non recourse
     
  7. willrocks

    willrocks Well-Known Member Silver Stacker

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  8. willrocks

    willrocks Well-Known Member Silver Stacker

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    Be careful with this. If you've made 'extra' contributions to your SMSF the trustee can 'claw back' that money from your super.

    Other bankruptcy notes:

    Trustee can look at your financial transactions up to four (4) years ago. In some cases longer.
    If you close your bank acct more than two years before bankruptcy they won't look at it.
    If you have a car more than $7000. Register it in joint names (e.g with spouse) well before bankruptcy.
    You can face criminal charges if you go bankrupt because of gambling. However if you went bankrupt for 'other reasons' but happened to have a gambling problem, that's OK.
    If you load up on debt (e.g. credit cards) right before bankruptcy you could face criminal charges (better to do gradually, it well in advance, for every-day expenses).
    If you have paper trail of buying bullion, you can kiss that good bye, or face bankruptcy fraud (better to use cash).
    Always try to avoid having your spouse go bankrupt with you.
    If the trustee is starved of funds initially, they have little incentive to go on a fishing expedition (unless it's a really high-profile case). Trustees are paid based on how much they recover.
     
  9. AustralianAustrian

    AustralianAustrian Active Member

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    Questions of criminal and unconscionable conduct of Bankwest from Bankwest Senate inquiry. Hopefully the remaining transcripts will come out next week.

    Confirmation that Bankwest was Australia's Lehman moment and the Treasury, APRA, RBA, ACCC knew it. I have abbreviated where possible. For complete transcript goto:
    http://parlinfo.aph.gov.au/parlInfo...en/112965af-6f32-4291-aa97-a23457bc2a37/0001"

    Senator MARK BISHOP: I will go to my last point, then. Bankwest was notionally bankrupt. It was purchased by the Commonwealth Bank from the parent Scottish organisation. The briefing notes suggested that the price paid was significantly below what was an acceptable rate for a viable operation. When the new management took over they naturally went through the loan book to find out what the real state of play is. As a consequence, they did a range of things, it is alleged, such as revaluing loans, repricing loans, putting more pressure on consumers to pay up earlier. There has been a lot of pain in particular niche markets in New South Wales and Queensland in particular. When your people have looked at that response, as outlined in the public documentation, by the Commonwealth Bank and the other submissions, do you think that was proper business practiceto revalue and reprice the loans with the attendant pain? Or was it unacceptable business practice?

    Mr Murphy : I do not think it is for a Treasury official to comment on those business practices. I would say that there is a framework there. This may not be solace to people who feel aggrieved or who feel that they were not given a fair shake. But there is a framework there for them to be able to take action if they feel that, in terms of the current laws of the land and in terms of what is fair and reasonable, that did not occur.

    From the government's point of view, it was clearly placed in a position whereby HBOS withdrew its funding for Bankwest, and that is on the public record. One of two things needed to happen. One option was the winding up of Bankwest, which would have caused great difficulty and big concerns not only for Bankwest customers and the business but also for the rest of the financial systemit would have raised huge worries and concerns in the community. So the government faced the situation of whether to have Bankwest taken over by someone or to let it fail. The government went through a process. The financial regulators were involvedthe Treasury, the Reserve Bank and APRA. Then the ACCC did a proper competition analysis, and in its view there would not be a lessening of competition if Bankwest were merged with CBA. At the macro level, I suppose, that is what has happened.
    Going on from that, you then move into questions about whether the receivers acted appropriately, whether the valuation on the property was done correctly and whether there has been any unconscionable conduct by the lenders. What government does is set in rules and obligations on all the elements of the system, and one would hope that those rules are tight enough to ensure fair results for everyone, whether it is the borrower or the lender. So I can understand that people may have found that the actions of CBA were not to their liking, or that people were very critical of them, but I think there are arrangements in place whereby they can take action if they feel that way.

    Senator MARK BISHOP: I have one final question. In that context, thenin that process of revaluation, repricing and establishing new business models and repayment schedules for borrowershave you been informed of any illegal or grossly improper behaviour or activity on the part of the new owner, such that you thought it appropriate to alert the relevant minister or ministers?

    Mr Murphy : I am aware of these issues, especially in relation to one of the commercial property developers in south-east Queensland.

    Mr Beckett : I think you could say we have had some ministerials about the issues. In those cases our practice is to try to help people out by describing the framework and describing the relevant remedies that are available to them. I have seen a couple of articles in the newspapers about the outcome of a couple of court cases.

    Senator MARK BISHOP: No, I don't think you have quite got the question. The question was whether the new practices, instituted by the new owners of Bankwest in both parts of New South Wales and southern Queenslandwhich have received the majority of press attentionwere such that they could be categorised as illegal or grossly improper to the extent that you thought it within your purview to advise your minister or the relevant minister of such behaviour.

    Mr Beckett : We do not make judgments about whether things are illegal or not. That is a matter for the courts. People have claimed that some of the lending practices under Bankwest were less than prudent in some cases. I am aware of those. In terms of the action that CBA has undertaken since, we have not formed a view that any of that conduct is illegal. But, again

    Mr Murphy : It is not for us to find that. If that were to come across our desk now
    (cont)

    Senator EGGLESTON: In many ways, I suppose that Treasury is closest to government when it comes to these sorts of thingsyou are more intimately involved with government on a day-to-day basis. We have heard stories, in various submissions from various people, that in the Bankwest matter there were secrecy clauses, that people were not allowed to disclose the terms of loans, that there was stripping of assets, interest rates and things like that. This committee did an inquiry into the liquidators' industry, two years ago I think it was, and there do seem to be some strong similarities between the behaviour of some of the less ethicaland even criminalliquidators and the sorts of stories that have been spoken of by people who have been involved with Bankwest. I am interested in the degree to which Treasury, as an important arm of government, plays a role in calling attention to what, in effect, it unconscionable conduct within the financial sector.

    Mr Murphy : I think the government has done a number of things in that area. One very much heeded the committee's viewI think it might have been to a parliamentary committee on insolvencywhere there needed to be a tightening up of the regime, and there were some poor or nefarious practices. So the government released a proposals paper outlining some reforms of the regulatory system in terms of insolvency. That was late last year, to try to make sure that the people who are insolvent practitioners have the right skills, and to try to get the incentives right.
     
  10. JulieW

    JulieW Well-Known Member Silver Stacker

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    I've mentioned in another thread somewhere of an acquaintance who was employed by a major bank, under constant armed guard, to access all the banks accounts to ascertain the actual liability of their mortgage market. The assumption was that they could not put an accurate figure on it since so many liabilities were buried in lo-doc, offset, redrawable, etc etc, mechanisms.

    I think Oz was very, very lucky in 2008 because if we'd slipped down with the rest of the world, the big 4 would have been in serious trouble. As it is I still suspect they're vulnerable but nowhere near the fragile state they were in in 2008.
     
  11. AustralianAustrian

    AustralianAustrian Active Member

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    Victim statement at Bankwest senate hearing. This is exactly what happenned to me. I had a contact of sale signed, the price would have paid Bankwest back in full, but they would not let me sell it because they knew they would make more money by forcing me to default. They repossesed my property 2 weeks later and sold it for half price creating a shortfall they could then clawback from HBOS, amougst other benefits.

    Mr Goldrick : I first learned about the clawback from an article that was written by Robert Gottliebsen, the journalist. He talked about clawback, saying there was a provision in place but, as I said, the deal was done that quickly that CBA put a provision in place to cover any bad or doubtful debts. I suppose there is no single smoking gun but when you look you see impairment provisions increasing tenfold and Bankwest canning loans when they are weeks away from settlement. In one instance I think you might have heard about in the week Westpac rang Bankwest and said, 'We're going to settle with you on Wednesday,' and Westpac appointed receivers to the client on Monday.

    Senator WILLIAMS: Bankwest?

    Mr Goldrick : Yes, Bankwest. That was two days away from being paid out. So you wonder who was running this. I know it sounds fanciful, and without doubt there were definitely rogue elements from people within Bankwest, but I think the main reason this bank is appearing here with no other banks in this sort of class was the benefit of this clawback provision.

    Senator WILLIAMS: I am quite gobsmacked. You are telling me that Westpac was going to settle a development or a loan with Bankwest in two days time and the receivers were sent in, and when a settlement came the people would have been debt free and the bank would have money.
     
  12. AustralianAustrian

    AustralianAustrian Active Member

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  13. errol43

    errol43 New Member Silver Stacker

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    AustralianAustrian. When taking out a loan for a house, is it possible to have any clauses inserted in the loan agreement to circumvent what the banks are currently signing the borrowers up for???

    Regards Errol 43
     
  14. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    So basically they did the equivalent of driving an old car into a lake because the insurance payout would be more than the car is worth, right?
     
  15. AustralianAustrian

    AustralianAustrian Active Member

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    No. and thats the problem. All banks' loan documents allow them to do this (as long as they can find/fabricate some sort of technical default). They ordinarily wouldnt because of the bad press, but when you are insolvent (eg Bankwest) they have nothing to lose by trying it. That is what the Unhappy Banking consumer advocate group is trying to do. Change the mortgage contract laws to give us a fair go before GFC2 arrives. They started with commercial loans because there are more "technical defaults" (fine print) in a commercial loan contact, and because it went so well for them they are now starting with residential loans. ie. If you are one day late they immediately repo it.
     
  16. AustralianAustrian

    AustralianAustrian Active Member

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    Yes :) , you hit the nail on the head. The media don't understand the finer points so, so far they have been reporting it as "heartless banks repo-ing properties". I have been trying to simplify it for them and tell them that the real story is essentially insurance fraud.

    To elloborate on the analogy, this is what happens:
    1) You enter into a car lease agreement with the bank. They have the title and you are making all your car payments. Unbeknownst to you the bank has taken out insurance on you in case you default on the lease payments.
    2) One day the bank finds out they are broke so they fabricate a default, find you while you are stopped at the lights, drag you out of the car, pour petrol over it and set it on fire
    3) They then make an insurance claim on it and take the insurance money
    4) They then sell the burnt out shell for a nominal amount and take the money
    5) They then sue you for the loss of value for the car and get what ever money they can get off you (eg, seize your cash account, debt negotiation, bankruptcy estate etc)
    6) You are left wondering what you did wrong, all you were doing is enjoying your car and paying your monthly lease.

    .. and there's your bailout. Their M3 loan is converted into M1 cash-at-hand. Its the biggest fraud in Australian history. Now you can see why CBA/Bankwest are putting out so much misinformation about this. Bring on the Royal Commission
     
  17. Big A.D.

    Big A.D. Well-Known Member Silver Stacker

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    It started to make sense after I saw this quote:
    Q: Why would a bank do something like that?

    A: They're a bank. There's money in it for them.
     
  18. AustralianAustrian

    AustralianAustrian Active Member

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    Here is the video of yesterdays supplementary hearing of banking senate inquiry. One of the victims was threathened and warned not to co-operate with the inquiry so the committee summoned the reciever. Unfortunately he wouldnt comment in public, only in private chambers. The video from the previous session will be online shortly.

    http://www.youtube.com/watch?v=cT9bGxmnhAM&feature=plcp

    The important points are:
    1) There is no dispute resolution process for improper conduct of receivers, only a "code-of-conduct" for accountants
    2) There is a current case of a receiver repossessing a farm and taking the cattle. Snr Williams question shows that this is unlawful if the bank doesn't have a lien over it.
    3) No-one knows what happens if a receiver does not sell a property for market value because ASIC never takes any action when a receiver breaks s420A of the corporations act.
     
  19. aleks

    aleks Well-Known Member Silver Stacker

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    Strong Australia banking sector = managed by scum bags and just as morally bankrupt as the rest of the world
     

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