The Daily Reckoning team is back in the office after spending Labour Day doing something other than labour.
The markets went quiet again last week after the sudden jump in volatility surprised everyone in the weeks before. For a while, the Euro crisis featured in headlines again. But nothing proved more exciting than America’s Sequester. Alongside Filibuster, it’s just another word the Americans use to describe political shenanigans.
If you don’t know about the Sequester and the Filibuster, it looks like you don’t need to. Now that both have happened, the Volatility Index (VIX) is back to 2007 lows and the market is heading back up.
While Bernanke continues to print money, why do Sequesters, Filibusters and Euro crises even matter? He can just print more if things get worse. Warren Buffett is fond of saying, ‘Only when the tide goes out do you discover who’s been swimming naked.’ Well, the tide has turned on Australia’s largest industry – finance.
It turns out there are nudists galore. This has exposed an opportunity that isn’t about financial markets and investing. It’s about enforcing your rights if you’ve been wronged. And the rewards could be enormous.
We first wrote about Australia’s mortgage scandal in August last year. Back then, everyone in Australia knew that those American NINJA loans (no income, no job, no assets) couldn’t happen here. And they were right. It’s even worse. Australia has NINJAD loans. No income, no job, no assets and dodgy documentation.
The NINJA loans wrought havoc with America’s economy in 2008. So finding out the same thing was happening here was horrifying. Could we experience a similar financial crisis as a result? Maybe, but never mind that. It’s the dodgy documentation that’s the real story.
Here’s why: If you find the right kind of errors on your mortgage paperwork, it could mean cancelling your mortgage and owning your home outright.
Most people just refuse to believe that statement. It’s just not possible you could cancel your mortgage, is it? The bank won’t suddenly say, ‘You no longer owe us money, stop sending us the monthly cheque.’
Let’s be clear. If your mortgage documentation was manipulated, your loan could be reduced or extinguished altogether. You would own your home with far less debt owing, or no debt at all.
That probably still sounds surreal. Well, it took months of research to confirm this opportunity is very real for vast amounts of Australian borrowers who know nothing about it. Today Tonight, Four Corners, The Australian and many more media outlets have reported on this story.
Today Tonight‘s expose featured two best friends who were separately conned into making property investments they couldn’t afford. Their documentation was manipulated after they signed it to get them past lending standards. Today Tonight featured them both saying, ‘I fought the banks and got 75% of my mortgage cancelled.’ There are many more stories like theirs.
Some borrowers ‘only’ had their mortgage reduced by around 75%. But dozens of people have had their mortgages reduced to a whopping $0.00.
At least, that’s what we thought. Most of these examples are kept secret, so you don’t really know how much people’s mortgages end up being reduced. The banks don’t want word getting out that they are cancelling mortgages, so they make borrowers sign confidentiality agreements as part of the deal.
But the consumer advocate who helps these people fight their lenders did reveal how many people she’s helped. Denise Brailey of the Banking and Finance Consumer Support Association gave an interview to Today Tonight. In that interview, she said this:
‘Well I’m only one person and I’ve been able to get at least 200 of these mortgages extinguished.’
That’s one person cancelling hundreds of mortgages. And that was last year. Never mind dozens, there must be hundreds more people cancelling their loans. And who knows how many hundreds more if word gets out.
But here’s the kicker in Denise’s interview. ‘There could possibly be $50 billion worth of mortgages to be extinguished…’ That could be more than 150,000 mortgages.
In other words, there is a massive opportunity for far more borrowers to enforce their rights against lenders than the hundreds who have done so already. And you could be among them. All you need is a step by step guide on how to find out if you could get your mortgage cancelled too.
So that’s what we’ve come up with. A report explaining exactly what happened, how to find out if you could cancel your mortgage, and how to go about doing it. It’s surprisingly easy to get started and find out if the opportunity applies to you, or your friends and family. More on that in a moment.
But you’re probably wondering just what kind of manipulation of documentation can get a loan cancelled. Well, here are some examples of what people have found on their paperwork:
- Jobs have been INVENTED: in one case an unemployed NSW man was listed as a ‘self-employed coffee shop owner’ with a fortnightly income of $3,500… In another, an elderly retired man from Sydney’s Assyrian community was described as being employed and earning a salary of $43,000. And in another, a 70-year old retired printer from Carrum, Vic was described as a ‘self-employed painter’ – a job he last held in the 1950s…
- Salaries have been INFLATED: in one case a lowly-paid deckhand was described as a ship’s captain earning $150,000 a year…in another a self-employed musician earning $36,000 a year was listed as earning $120,000…and a toll booth operator earning $28,000 was listed as earning $38,000…
- Assets have been OVERSTATED: A Sydney couple with a business worth $25,000 and no superannuation were listed as having a business worth $125,000 and super savings of $30,000… In another case a 64 and 75-year old pensioner couple claimed their assets were inflated from $395,000 to $901,263 by their lender…
- People have been DUPED or COERCED: In one case a 98-year-old woman was granted a 30-year loan, prompting one Australian Senator to quip, ‘She must have a good doctor’… In another, a couple ‘were persuaded to sign forms in blank and were told that they would be filled in later.’ And in a third, a retired pensioner couple were persuaded to take out a 30-year loan for $520,000. They were listed on their loan forms as a ‘stock broker’ and ‘solicitor’…
The thing is, these stories can have a happy ending…for the borrower, not the lender. When borrowers have challenged the bank on its document manipulation, the courts, financial ombudsman and credit ombudsman have all sided with borrowers.
The real question now is whether people will take this opportunity seriously. Will average Aussie battlers find out about this opportunity and bother to find out whether their mortgage could be cancelled?
We certainly hope so. Back when one of the first court case established the law on these cases, the person who organised funding for the borrower’s 7 year legal campaign said, ‘This could mean that thousands of people may also be able to cancel their loans and that would be a huge win for justice in this country.’ More than $3 million was spent taking the bank to the High Court. The borrower won every step of the way. And other borrowers have been cancelling and reducing their loans since.
Now is the time to fight back against lenders who manipulated people’s legal documents to earn more commissions. Do you want to be able to say ‘I fought the bank and got my mortgage cancelled’?
If people allow this opportunity to sink away, the lenders will get away with what they’ve done. You have the chance to hold them accountable.
The report that reveals what borrowers need to know is being finalised now. It should be ready sometime this week. Keep your eyes open for the video and be sure to send it to anyone you know with a mortgage.
The Daily Reckoning Weekend Edition
Ben Bernanke’s Pseudo Logic
8-03-13 – Dan Denning
China: The Biggest Bubble Ever?
7-03-13 – Bill Bonner
The Disaster of Central Planners and Other Simpletons
6-03-13 – Bill Bonner
What the Shale Gas Revolution Could do to LNG Prices
5-03-13 – Dan Denning
Politicians Are Clowning Around With Your Wealth
4-03-13 – Dan Denning