Bendigo and Adelaide Bank has told mortgage managers and brokers to cease lending to non-residents amid growing concerns about fraudulent loans and money laundering.
Ken Sayer, CEO of Sydney-based mortgage manager Mortgage House, told The Adviser that Bendigo and Adelaide had contacted the group and its broker partners saying that it would no longer service loans to overseas borrowers.
“They sent us a notification about a change to its [foreign borrower] policy,” he said.
Meanwhile, Citi has a confidential blacklist of foreign currencies it will no longer accept as payment for Australian property from non-resident borrowers “because of growing concerns about fraud and possible money laundering”, according to The Australian Financial Review.
Mr Sayer said he expects “every lender to turn their tap off” for non-residents, and that he does not understand “what all the recent fuss is about” regarding loan fraud among foreign borrowers or why “everyone is denying that they know about it”.
“Every mortgage insurer, every bank BDM, every broker, every relationship manager and every bank has known about this for 20 years,” he said.
Mr Sayer said the recent foreign borrower policy changes made by the banks have had no negative impact on Mortgage House, as the group made a decision from the beginning not to target the non-resident market.
“We were approached by some Chinese brokers for Chinese investors two years ago, but because we’re so anal, we actually wanted to contact the third parties in China to confirm that the borrowers were actually self-employed,” he said.
“The brokers withdrew the deals from our desk and we haven’t seen them since.”
However, Mr Sayer said Mortgage House has been inundated with brokers who now want to do business with the group following the non-resident policy changes by the banks.
“If we can validate these loans, we will absolutely fund them, but if we can’t validate them, there’s no way in the world we’ll touch them,” he said.
“We’ve even had a Chinese property developer that came to us directly and not through a broker, but because we think the next series of bankruptcies is going to be Chinese developers, we declined his application to refinance.”
Brokers will still be required to comply with forthcoming best in...
The lender has slashed its LMI costs to $0 for eligible borrowers...
In response to the release of the final clawback regulations, Con...