To banks and other lenders be obliged by law to give their ratings to loans to customers?
BY TONY OR ' DWYER
Below is part of a note sent to my local Federal Member recently which suggests that while the reform of banking is currently under consideration by the Government, the Treasurer can look of legally requiring banks and other lenders to deliver copies of their ratings to their loan clients.
A colleague at the same time the same note sent to the Senate Committee, which is also considering Bank reform:
"Probably not remember, but after he was elected for the first time, I came to lobby you for protection of consumers."
"A question then raised was the need that lenders property be obliged by law to provide copies of their ratings borrowers."
"You please raise this with the Treasurer, if he is susceptible to some changes in his proposed reform package."
Below is part of a proposal to the Honourable Lindsay Tanner (such as the Minister of Finance) in October 2008 where he gave some background to my concern:
"In the last 10 years has included part of my legal practice rescue property into overpriced businesspeople in as a result of 'property spruikers' tactics." Most of these bailouts has been successful. Implied that persons purchase contracts before that had been resolved and released big mortgages. None of the matters that I was never involved in going to the courts. All participating properties not only sold to Queensland Queensland but also (and often more) people from interstate and overseas. During this same time played (and remain) a prominent role in media in warning property buyers and investors about 'spruikers property' and their tactics.
"It seems that these tactics have changed very little during this period." Spruikers property invariably work in collaboration with property agents roots in-the-know, brokers, financial advisors, lenders, appraisers, conveyancers, lawyers and others. While Queensland is one of the few jurisdictions that tried to legislate against the practices of spruikers, this state of property and motor dealers agents Act 2000 - despite some 20 amendments in eight years more or less - has unprotected adequately consumers nor effectively prevent the perpetuation of overpriced property scams. "
First thing you should do legislatively is to remedy the mischief caused by lenders need not disclose ratings to customers. In many cases, lenders have been aware of ratings low properties being bought were expensive, but due to the high ratings for collateral properties, their loans offers stacked. Lenders were comfortable with equity total had security on. However, few folk that want to proceed with the purchase if you knew that your lender property investment valuation was considerably less than the price paid.
Do you think make lenders to disclose their ratings to customers? Have you had a bad experience with a spruiker property?
Tim O'Dwyer is a lawyer of Queensland watchdog@argonautlegal.com.au
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