AUSTRAC refers brokers to authorities in mortgage fraud probe
The Australian Transaction Reports and Analysis Centre (AUSTRAC) has referred mortgage brokers, accountants, lawyers, and other entities to authorities as it expands its investigation into suspected mortgage fraud and weaknesses across Australia’s lending sector.
Through its Fintel Alliance, the financial crimes agency said its Operation Claw investigation had identified co-ordinated suspected mortgage fraud after analysing data from 10 major Australian banks.
Potentially hundreds of millions of dollars in suspicious lending was identified through the analysis, with a significant proportion of the activity linked to properties in Sydney.
Concerns have also emerged about criminals using artificial intelligence (AI) to fraudulently secure mortgages, with police, lenders, regulators, and representatives from the financial services, legal, and property sectors involved in ongoing investigations.
Initially estimated at around $1 billion, the scale of the suspected lending has reportedly grown to at least $4 billion across Australia’s five largest banks.
AUSTRAC CEO Brendan Thomas said the findings demonstrated that vulnerabilities in the mortgage system extended beyond individual institutions.
“The scale of this activity should be a wake-up call for every lender. The same warning signs were found across banks that together cover the vast majority of Australia’s mortgage market,” Thomas said.
While the investigation did not uncover evidence of widespread money laundering, Thomas warned that weaknesses in mortgage lending processes could still be exploited by criminals.
“While this project did not identify evidence of widespread money laundering, the weaknesses it exposed could be exploited by criminals seeking to abuse Australia’s financial system,” Thomas said.
First non-bank joins 5% Deposit Scheme
Liberty Financial has become the first non-bank lender to join the federal government’s 5 per cent Deposit Scheme, bringing an alternative lender into the program that now supports a significant share of first home buyer lending.
Liberty Financial general manager – residential Caesar Ibrahim said joining the scheme reflected the lender’s focus on improving access to home ownership and supporting borrowers with more complex financial circumstances.
“We know saving a full deposit can be one of the biggest barriers for aspiring home buyers. By joining the government’s 5 per cent deposit scheme, we can help more customers move forward sooner,” he said.
Ibrahim said Liberty’s approach to lending also meant it could consider borrowers whose income or employment circumstances did not fit conventional lending models.
He said the move also highlighted the role non-bank lenders could play in expanding access to government-backed initiatives.
“This is an important milestone not just for Liberty, but for the role non-bank lenders can play in expanding access to government-backed initiatives,” Ibrahim said.
“Brokers will continue to play an important role in helping customers understand their options and determine whether the scheme is suitable for their needs.”
Viridian mothballs Smartmove brand
Viridian Financial Group has retired the Smartmove brand and launched Viridian Lending, bringing its mortgage broking operations under a single national banner as it seeks closer ties between lending and financial advice.
The group said the launch completed the integration of Smartmove Professional Mortgage Advisors into the wider Viridian business, following its acquisition in 2023.
Smartmove had continued operating under its own name following the deal, with the former business settling more than $1 billion in lending annually, according to Viridian.
Cameron Wiles has been appointed general manager, lending, succeeding former Smartmove general manager – lending Darren Little.
Viridian said the new business would bring its lending capability together with its financial advice, investment, and portfolio management operations while allowing brokers to retain responsibility for their client relationships.
Raamy Shahien, Viridian CEO, added that the new structure reflected changes in the way clients approach major financial decisions.
“Financial decisions are becoming more complex and more interconnected. Lending is no longer just about securing finance – it’s increasingly one part of a broader financial picture,” he said.
“We believe the best client outcomes come when mortgage brokers and financial advisers work more closely together, and that’s exactly what Viridian Lending has been built to enable.”
RBA holds official cash rate at 4.35%
The Reserve Bank Monetary Policy Board has held the official cash rate at 4.35 per cent following its August meeting, keeping the rate unchanged for the second consecutive decision.
In its post-meeting statement, the board said the decision was unanimous and that it remained focused on “ensuring that high inflation does not become embedded”.
“To achieve this, growth in aggregate demand needs to remain subdued to reduce capacity pressures and bring inflation back to target,” it said.
While the RBA acknowledged three rate increases delivered since the start of 2026 had tightened financial conditions, it said the economy was slowing broadly in line with expectations.
“Following three increases in the cash rate target since the beginning of the year, financial conditions are now tighter than they were, and the economy appears to be slowing as expected,” the board said.
However, the board also warned that inflation remained above target and was unlikely to return to the midpoint of the band until late 2027.
“But inflation is still too high. It is not expected to return to around the midpoint of the target range until late 2027 and there are upside risks to this projection,” it said.
“With monetary policy judged to be somewhat restrictive, the Board decided to leave the cash rate target unchanged while it assesses how the economy is evolving.”
