[Author – Tim ODwyer]
A while back I was interviewed on the Drive Programmes for Brisbane radio station 4BC and Canberra radio 2CC, as well as on ABC – TV news. The subject was mortgage fraud – where agents, finance/mortgage brokers, solicitors, buyers and sellers can be parties to criminally defrauding banks, building societies and other lenders.
I told how a crooked Queensland agent lost his licence for this, how another agent and his whole sales staff were jailed and how a fraudulent mortgage broker and her accomplices also copped jail sentences. One conveyancing solicitor involved with one of the agents soon joined his mates in jail.
The warnings are obvious for all in real estate. Particularly for any professional corruptly tempted by “an important source of work to his practice” – to quote the solicitor’s barrister who told the court this foolish lawyer apparently “couldn’t say no to an important client.”
Property buyers should be wary of sellers’ agents keen to help with their finance and conveyancing. Sellers should also ensure that their agents focus on selling their property rather than servicing buyers. See your own independent solicitor or conveyancer before you sign anything.
Also raised during the TV interview were the risks faced by home-owners prompted to re-finance their properties. Any rise in interest rates, I suggested, would be accompanied by an increase in after-hours phone calls suggesting you can solve your financial problems by re-financing and consolidating debts, and more TV adverts with similar spiels.
Unfortunately, the record of some of those promoting and arranging refinances is not good. A recent paper from the Ministerial Council of Consumer Affairs research paper noted that consumers can suffer financial loss when re-financing, especially where mischievous “equity skimming” has taken place. The Ministerial paper found that the use of brokers could leave lenders exposed to more defaulting borrowers and mortgage fraud. The market is open, the paper reported, to operators “who seek only to defraud or exploit vulnerable or unsuspecting consumers dependent on them for advice.”
Don’t become a victim of, or a party to, mortgage fraud.