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Sunday, June 02, 2013

Australia's Sub-Prime Crisis

It has been said by some that Australia goes through the same trends as the USA, just a decade behind. That seems to be true of the subprime crisis and it's now hitting Down Under:

Veteran consumer rights campaigner Denise Brailey is to make public 2500 private emails and bank documents from Monday to expose what she describes as “Australia's subprime crisis”.

Ms Brailey claims that lenders and mortgage brokers tampered with documents to provide more credit for borrowers with “low-doc” loans.

She says she is making private documents public after years of trying to get corporate regulators to investigate the banks and other lenders over what she alleges is “systemic fraud” in the “low-doc” market.

Low-documentation loans are made to borrowers such as business owners who can't prove a regular income, but the borrower signs a declaration as to estimated income. The loans usually carry a higher interest rate than other loans, as they are seen as more risky.