low doc changes
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But then you got a little financial stress as Leymans collapsed and interest rates increased substantially?
My no docs were with RAM's that were later sold to RHG. Rates did increase so I refinanced out to Bendigo/Adl bank via mortgage manager Homeloans Ltd.
Quite a few lenders books were sold off or left to die during the GFC. GE money, Macquarie, Bluestone to name a few.
All of the big four also increased their rates out of synch with the reserve if I remember rightly?
Bankwest, Adelaide bank and Rams were all purchased by a big four bank, and are still in the lending market. Macquarie has also re appeared, as has Bluestone.
Hence my original question, Is risk being repriced? Or is this a shortlived example?
All of the big four also increased their rates out of synch with the reserve if I remember rightly?
Bankwest, Adelaide bank and Rams were all purchased by a big four bank, and are still in the lending market. Macquarie has also re appeared, as has Bluestone.
Hence my original question, Is risk being repriced? Or is this a shortlived example?
The new RAMS has pretty much always had a greater risk appetite than its parent in more ways than one. But from market diversification perspective that makes sense.
Low doc with no lmi or price loading shows ( to me) a bit of a deseparate attempt to get more market share..................
Id expect the funder needs to carry higher capital reserves, and that isnt cheap.
SHould certainly attract a larger slice of that business.
ta
rolf
Ah, the good old days!
Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income
Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income
A client of mine many years ago did a low doc loan. The Chid Support Agency, CSA, did a credit check and seen he had applied for a loan. They then got a copy of the application form from the bank. This showed his income as $x but his income declared to them was $y....They started asking questions.
Its how Wickenby grew too. Heaps of lodoc reviews in early 2000's and the ATO smelled a rat comparing tax income with loan repayments and declared income. Where were these people getting funds from. Offshore "gifts, loans etc"...A deeper review. .. Led them to monitor a few offshore advisers (Strauhans) who kept making visits here. Calling on accountants. They grabbed a unattended laptop in a Sydney hotel room (ASIO did it) from one and found a client list. Rest is history. .Boom.
The ATO are still doing it. With a $820m supercomputer in Canberra. Yes that is one computer.. Technically owned by Defence, Operated by the ATO and crime intelligence agencies who sahare all the info. Housed inside the most secure building in the country.
The ATO are still doing it. With a $820m supercomputer in Canberra. Yes that is one computer.. Technically owned by Defence, Operated by the ATO and crime intelligence agencies who sahare all the info. Housed inside the most secure building in the country.
high rollers sure.........
Chicken feed though I expect compared to the smaller systemic cashie society.
ta
rolf
Also be aware that lodoc and nodoc loans can raise an ATO audit target on your back.
The ATO have audited many such borrowers who signed off on declaratiosn that they earned sufficient income to support a loan of say $1m...Then they made loan repayts on that loan. However, their personal tax returns did not support such cdeclared incomes. In a huge number of cases they earned very little. How did someone of a very low income maintain the repayments...???
The ATO view is tax avoidance in the cash economy..The ATO has a long standing series of s264 notices to major lenders who do lo/no doc loans that acquires information on their identities, their certified level of income and much more. Important you know that what you tell the lender is also shared with the ATO.
Thats why lo/no docs loans should be carefully considered. The ATO may ask later where the proceeds come from if your income doesnt stack up. Over 65% of lo/no borrowers were found to have underdeclared income
Got any references for these 'many such borrowers' and 65%?
65% of what? All low doc borrowers? Borrowers targeted by the ATO? Low doc borrowers targeted by the ATO? You have cut and pasted this to a couple of posts now, lets have some justification.
Low doc loans aren't for people operating in the cash economy. People operating in the cash economy use many methods to get around tax laws etc. Obviously this is illegal.
Seeing as low doc loans have been around for 10 years or so, along with advice about sharing information between lenders and government, anyone in the cash economy might be a wake up by now and use another method to source finace, or avoid it altogether and stay in the cash economy.
I doubt many in the somersoft community operate in the cash economy, so Im wondering what your point is by posting this cut and pasted warning on any thread with low doc in the title?
Perhaps theres another reason low doc loans should be avoided, not just those involved in tax avoidance?
Please enlighten us.
