Should banks and other lenders have to legally give their assessments for borrowing customers?
TIM O' DWYER
Following is part of the note sent recently my local federal Member, suggesting that although banking reform now being considered by the Government, the Treasurer may look to legally require banks and other lenders to provide copies of their evaluations of its customers borrowing.
Colleague at the same time to send the same note the Senate Committee that considers the reform of banking:
"You probably won't remember but once you were elected in the first place, I came to lobby on consumer protection.
"One question I raised was the need for property, lenders are required by law to submit copies of its evaluations for borrowers.
"Would you please raise it with the Treasurer, if it is some tweaking of his proposed reform package."
Following is part of the proposal put forward by Hon. Lindsay Tanner (as Minister of Finance) in October 2008, where I gave some background on my concern:
"Over the past 10 years has included part of my practice of saving people from real estate transactions concluded on the tactics of overpriced properties spruikers '. Most of these rescues have been successful. They included getting people from purchase contracts before they settled in and taken out large mortgages. None of the issues that I have ever worked on has gone to court. All properties are sold not only in the Queensland, Queensland resource but (and more) people from interstate and overseas. During this same time I played (and remain) the role of prominent media in preventing property buyers and investors of spruikers properties and their tactics.
"It appears that these tactics have changed little over this period. Property spruikers always work in cooperation with the know real estate agents, finance brokers, financial advisors, lenders, appraisers, notaries, solicitors and others. While Queensland is one of the few jurisdictions have attempted to legislate against the practice, the State and spruikers property agents automobile dealers Act 2000 – despite some 20 amendments over the past eight years or so – do not adequately protect consumers and not entirely without perpetuating inflated property scam. "
The first thing that must be done through legislation is to eliminate the injury caused by creditors that do not require disclosure of evaluations for clients. In many cases, lenders have known from low ratings that were overpriced properties purchased, but from high marks on the collateral property, their credit transactions stacked. Lenders are comfortable with total capital, they took over security. However, few people would like to continue shopping, if they knew that their lender's determination of the value of the property investment far less than the price being paid.
Do you think that lenders should disclose their valuations for clients? You had a bad experience with spruiker property?
Tim o' Dwyer is a lawyer of Queensland, watchdog@argonautlegal.com.au
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