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Senate Standing Committees on Economics
PO Box 6100
Parliament House
Canberra ACT 2600

Without Prejudice

Submission to the Senate Standing Committees on Economics

Dear Senate Standing Committee on Economics,

Welcome Australia Limited is most grateful for the opportunity to present to your committee our submission concerning Banking anomalies in lending practices primarily in respect to Low Doc and No Doc Loans.  Our investigation shows families and individuals have suffered and continue to suffer the loss of their primary place of residence and made homeless due to questionable behaviour and policies of banks and financial institutions.

It is unfortunate that when requests have been made to the appointed agencies established for the purpose of protecting borrowers from bank or financial institutions’ maladministration that, in many cases, those making the request are informed that it is not that agency’s jurisdiction or, it was prior to amendments to acts or it is outside the time limitations.

A prime example of this is the case of a client who approached us in June of 2012 with difficulties in meeting her home loan repayments. The client had become overwhelmed and distressed by her circumstances and inability to understand what had actually taken her from a position of owning her own freehold home, to owing a bank four hundred thousand dollars. It is important to note, that during 2003 when her nightmare began, she had been on a disability pension.  Before our investigation, the client had been completely unaware of the details which had led her to this predicament.

After examining countless documents, loan application forms, contracts and statements, we were able to present our client with the events and anomalies that had placed her in this position. These included being coerced into a Low Doc loan she did not request or require, falsifying her income, and falsifying the valuation of her property. Although allocated a Solicitor an associate of the broker who conducted both the sale and purchase transactions for the two homes, the solicitor at no time contacted, communicated or met with the client.

The clients ability to meet any repayments was zero, as verified when we entered her income of that time into the banks Service Calculator. Yet the bank proceeded to process the brokers Loan Application Form without one single enquiry.  Please find a brief of our client’s story below.

This case is just one case in the avalanche of very similar cases that urgently require the Australian Parliament to rectify.

Dear Senate Standing Committees on Economics would you be so kind as to answer the following questions.

  • Do banks and financial institutions, being the lenders, have a legal obligation to make sure the borrower has the capacity to repay a loan?
  • Do the banks and financial institutions, being the lenders, have a legal obligation to validate the information contained within the Loan Application Form prior to approval of the loan?
  • Do the banks and financial institutions, being the lenders, have a legal obligation to explain the contract and its meaning to the intended borrower prior to the signing of the contract?
  • Do the banks and financial institutions, being the lenders, have a legal obligation to sign the contract as a witness to the borrower’s signature?
  • Are the banks and financial institutions responsible and accountable for a default loan which would have been avoided if the banks and financial institutions had validated the information contained within the Loan Application Form prior to approval of the loan?

During our investigation into banking practices and lending policies we have discovered serious matters of concern.     We would appreciate the Senate Standing Committee on Economics to investigate these matters and where appropriate, introduce legislation that would establish accountability under law on all such matters.

Matters of Concern: Contracts, Extortion, Duel-Selling, Currency Conversion and Banks Agents. 

Bank Contracts
It our understanding that Australian banks and financial institutions are bound by Contract Law and the conditions that constitute a contract. However, it appears that the banks and financial institutions are protected by their friends within the agencies and that they consider themselves to either above or exempt from Australian Law.

This is demonstrated by the hundreds of families and individuals who may have qualified for compensation from the banks or financial institutions due to possible void contracts, who have filed complaints with the appropriate agencies such as ASIC and FOS etc. for protection and investigation into their case. Regardless of their evidence, the majority of cases are dismissed on policy grounds such as time limitations or because of poor quality investigations and/or inability to identify and uphold the law. Finally, the applicants have had their homes repossessed and found themselves cast onto the streets.  

Our concerns as to the validity of many loan contracts with banks or financial institutions are that they contain serious anomalies such as false statements, misinformation, maladministration and/or fraud. They are neither explained to the borrower, nor are the borrowers’ signatures witnessed.

The following are taken from the Law Handbook:

False Statements

The parties have agreed and there is a contract, but the statements or terms in the contract exist only because one of the parties has made a false statement.

False statements affect the question of whether or not a contract exists. Very serious false statements mean a court would view the contract as void (see: Glossary) and unenforceable. The consequence is that monetary damages sufficient to place the wronged party back to their original position must be paid.

"Conditions" of a contract are so important that without them one or other of the parties would not enter the contract. If a false statement amounts to a condition of the contract, the wronged party is entitled to rescind (see: Glossary) the contract. A court may view the condition so seriously that without it the contract is void; that is, with the false statement taken out of the contract, there is no contract.

Illegal and Void Contracts

Money paid or property transferred under a contract that is void at common law may be recoverable because the effect of the contract being void is that there is no contract, so that the parties should be put back to their original position.


The deliberate targeting of the Asset Rich – Income Poor with the intention of reaping financial gain that would invariably and knowingly lead to the loss of the victims’ homes.

For the past ten years, Low-Doc and No-Doc loans have been the catalyst in generating multi-million dollar incomes for banks, financial institutions and speculators in the property market.

Marketing campaigns have targeted those who have retired, many of whom survive solely on the pension, luring them to mortgage their properties while offering them the world.

The majority of these retirees have no idea as to the true picture of what is actually taking place, for once they sign that contract the money begins to flow, to the bankers, the financial institutions and the property speculators, while the investor/retiree begins to witness the dissolution of their asset, their family home. 


The term dual-selling or securitisation refers to a bank or financial institution on-selling the debt/security they have obtained through their agents to a third party via a special purpose vehicle, entities or a like process and then demanding a second payment in full from the borrower.

Dear Senate Standing Committees on Economics would you please answer the following questions.

  • Does the bank or financial institution have the legal right to sell and collect money from a third party against the borrower’s debt/security on their loan?
  • Under what Australian Law is this permission granted?
  • If the bank or financial institution has on-sold the borrowers debt/security to a third party, has the borrowers’ debt then been settled?
  • Does the bank or financial institution have the legal right to then demand a second payment in full from the borrower?
  • Under what Australian Law is this permitted?
  • Does the bank or financial institution have the legal right to claim insurance on a default mortgage as well as repossess a home?

We have on hand copies of emails forwarded by banks to the borrowers stating that their debt/security has been securitised/on-sold. This has also been confirmed by bank staff and brokers.


Built into each Loan contract is a considerable charge to the borrower for a Lenders Mortgage Insurance. We are of the understanding that this is claimable if the borrower defaults. If this is the case, it would translate to the banks and financial institutions making a third claim against the one product, being the loan.

  • Under what Australian law is this “third claim” against the one product, the loan, permitted? 

Currency Conversion

There has been much speculation as to whether or not the banks and financial institutions actually have the tangible currency on hand that is credited to a borrower’s account as required Under the currency Act of 1965.
A legal opinion

In order for a contract to be valid and enforceable, there must be valid offer + acceptance + consideration + intention to create legal relationship.
In order for there to be a valid offer, the offeror (e.g. the Bank) must have the 'subject' or things legally in his or her legal control and possession to offer. Basically, the Bank must have both the legal and equitable rights to offer or sell the product (e.g. money) and most importantly, the subject or product (e.g. money) must be in existence in the first place in order for it to be capable of being offered or sold.

We have to ask ourselves, did the Bank have the product (e.g. 'money') to offer to loan the borrower in the first place? Based on the fractional reserve banking system which is basically almost a fraud, most bank arguably have NO 'money' or any product to offer to anyone in the first place. The 'money' or 'product' was basically 'created' by the borrower the moment they signed on the loan application form or loan contract. Thereafter, the Bank will just create an account for the borrower and then electronically key into the computer and create the 'money' or 'product' which they initially DID NOT HAVE OR OWN to offer to anyone (e.g. the borrower).

Hence, since there was no product at all for the Bank to offer in the first place, the offer was invalid thus the acceptance + consideration + intention to create legal relationship was also invalid. Most importantly, there was fraud or misrepresentation on the part of the Bank to deceive the borrower into entering a contract with them and then selling to the borrower 'something' which they (e.g. the Bank) did not possess in the first place (e.g. the money) which only came into existence after the signing of the LAF and contract - by the borrower (e.g. the offeree). Further, all the Bank needs to do is to key into their computers and basically do nothing much, while the offeree (e.g. the borrower) will have to work hard, toil or vex to pay off their loan or debt PLUS interest.

The contract between the Bank and the borrower is void ab initio = unenforceable and voidable at the beginning.  Misrepresentation will also usually make a contract voidable. A misrepresentation must be a false statement of fact (e.g. the Bank falsely stated that they had the 'money' to loan the borrower). The innocent party has the right to rescind the contract and/or claim damages.

Finally, since the contract was void and unenforceable, the borrower need not have to continue to pay their mortgage and the Bank has no right to rely on whatever clauses in the contract to foreclose or confiscate any of the borrower’s property. END.

Clarification from Banking Expert

The bank creates credit based on your signature on an application for a loan. The bank does not co-sign the application. It is not a contract but an application that is either approved or rejected.

The banks do not lend money they advance credit.

The credit created based upon your name/signature is your credit and you must give the bank that credit to get the equivalent in "hard currency" to transact and you won't get large amounts of "hard currency" but rather paper "money" which is also credit.

The bank then demands that you give them back hard currency/credit you have earned with the sweat of your brow and exertion of which the principle amount is then extinguished, from whence it came. The interest and fees they charge you is kept by the bank as profit.

Banks’ Agents. 

The banks are of an opinion that their agents, the brokers are a totally separate entity from themselves. Yet it was the banks in 2003 that instigated the Mortgage Broker enterprise.

Brokers receive an initial payment followed by monthly payments from the banks for every loan signed. However the buck stops with the Banks and Financial Institutions.

Dear Senate Standing Committees on Economics

Based on the information contained herein and all the other such submissions, we ask that you support a Royal Commission of Inquiry into the entire lending practices of the banking industry and until such time Parliament is able to legislate, that a freeze be placed on all interest rate charges, fees and principal sums of all Low Doc, No Doc or any other mortgage that has been filed as a complaint with ASIC, FOS, COSL or APRA retrospective of time.

The Australian people are requesting compensation in the form of being put back into a position as if they had never met their bank or its agents and officers. All interests, fees and charges must be reimbursed by Banks as they cannot profit from a fraud.

With respect, if we understand correctly, agencies such as ASIC, FOS, COSL and APRA, were established  in order to protect the Australian people and/or investigate, on their behalf, any situation of suspected maladministration, misrepresentation or fraud, each rendering a contract with their banks or financial institutions Null and Void.

We are concerned that these agencies set up to protect the Australian people appear to have been funded by the very banks and financial institutions they are appointed to investigate or that members appointed to the boards of these agencies have previously been employed as executives of the bank or financial institutions they are obliged to investigate.

This being the case, we wish to ask the Senate Standing Committee on Economics to arrange independent funding for all such agencies promoted as being responsible for investigating complaints on behalf of the Australian people.

We wish to also ask the Senate Standing Committee on Economics to install a mechanism that would replace all board members of such agencies that have had or still have affiliations with, or financial remunerations from, banks or financial institutions. 

This is our client’s story:

“In 2003, I found myself alone with two young children.  My financial security was embedded in the bricks and mortar that was my home. I was on a disability pension at the time. I owned my home freehold and had never been involved with a bank for any other reason than to protect my savings account.

The glib tongue of a mortgage broker heralded my descent into hell. It was not until 10 years later that I discovered how I had been conned.

The broker (whom I trusted) had set up an unnecessary bridging loan for a five day interim period between the settlement date of my new home and the settlement for the sale of my previous home whilst, at the same time, unbeknown to me, he also set up a “withdraw facility” in the form of a mortgage on my new home.

In October 2003 I had just sold my previous home and then the Broker suggested to me that I take a “withdraw” facility on the equity in my home. I had no idea, at this time, that he had already initiated the vehicle for this loan alongside my “bridging loan back in August.”  I explicitly told him I did not want a loan from the bank.  He replied, “Don’t think of it as a loan.  Think of it as accessing your own money in your home.”

Before I knew it:

 - I had a mortgage I did not ask for.
 - I had a mortgage I did not want and
 - I had a mortgage I did not need as I already owned my new home outright.

A new home free and clear and suddenly, my first statement turned up with $308,000 in my original bridging loan account (which the lawyer, a friend of the Broker) had kept open by with-holding part payment of my home settlement money (without my knowledge or consent)  I never met the lawyer or heard a word from him regarding advice or what was in my best interests during the sale and purchase of my home.  The original bridging loan had been “morphed” into a “mortgage” on my new home.

Thinking this was “my own money” as told me by the broker, I proceeded to carry out some refurbishment and maintenance to my new home. 

After the first two payments came out of my savings account, I direct debited the repayments out of the mortgage account itself as I was unable to meet amounts the bank had requested.      

I completely believed the Broker’s story that I was using “my money” and never realized that I was “BORROWING” money from the bank.

I had NO IDEA how compound interest works. In 2007, the debt had escalated substantially.

At this time, I noticed that the amount on the statements had blown out and thought it must have been caused by the interest rates of that bank being too high. So, I called the original Broker (I trusted him completely) and asked if I could change to a bank with lower interest rates.

Not only did I get granted a refinanced mortgage, I also was granted an “investment loan” to buy shares. Both these loans were granted without checking how the payments from my previous bank were being met and my inability to meet future payments.

My ability to repay the original loan according to the first bank’s service calculator was $0. No one ever disclosed this information to me.

It was the same for the second bank – the service calculator determined my ability to repay the loan was $0, so how was it possible that these banks lent me three loans whose combined total amounted to several hundred thousand dollars---???

There is no doubt that the first bank deliberately targeted me to steal my house and leave me in the gutter.  Then the other “JACKALS” in the form of the 2nd bank came in for the “kill” with not only another “increased” mortgage loan, but also, an “INVESTMENT” loan, whilst the broker was rubbing his hands together at receiving his bank rewards via his initial payment and his ongoing commission cheques from the bank.

The bank was on the verge of taking recovery action, until in 2012, I requested Welcome Australia to look into my situation, only to discover several serious anomalies in the Loan Application Forms that the Bank used to approve my loans. Finally, I realized how I had been targeted and abused by these evil, greedy, callous, banksters. 

Later I joined BFCSA, Banking and Finance Consumers Support Association (Inc.) who supplied me with invaluable information and insight into banking malpractice. BFCSA also wrote to the second bank and then FOS, informing them of my situation.

Without Welcome Australia and BFCSA’s support I would, I am sure, now be homeless.    

The information constructed by the bank’s agent [also referred to as the broker] in the Loan Application Forms was untrue.

It included falsely declaring the property was for Investment purposes where, in fact, it was my home and primary place of residence. Falsifying my income by more than $65,000.00, falsifying my property valuations by more than $927,000.00 and included a $78,000.00 non-cashable life insurance policy.  

My case with the first bank has been closed by FOS due to time limitations of being outside their six year policy, as well as their speculation regarding when I first became aware of the inclusion of false information in the LAF and bank contract, whilst my case with the 2nd bank is presently being decided by a young case manager at the Financial Ombudsman Services. Meanwhile, the 2nd bank keeps charging me thousands in default interest.

I noticed in a recent ASIC release, references to the new NCCP laws 1 July 2010.  I understand ASIC have had significant powers available from the past decade or more regarding IMPRUDENT LENDING, ASSET LENDING, Maladministration in Lending and unconscionable conduct.  My case was an Asset Lend.  The recent High Court decision referred to these pieces of legislation and ruled in favour of the homeowners. END”

Dear Senate Standing Committees on Economics we wish to sincerely thank you for your time to study the content of our submission which has been written out of the cries for help from the Australian people. We trust that you will know their pain and introduce the necessary legislation to right this situation. Thank you.

Anthony Halpin
Principal Director
Welcome Australia Limited.                                                                                                                                               October 17th 2013

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