As I understand it, most groups make you pay for the trip, then give you the money back at settlement. 
Neil Jenman - in Chat - 08:30pm Sunday 4th April
- Thread starter michaelg
- Start date
Jenman seems to think that banks are responsible for promoting the scams as well...
A couple of the people on the show were saying, because banks lent them money therefore it can't be a bad deal. Hence, banks are also responsible for promoting the scams.
I disagree. Banks run a lending business. They don't know whether your deal is a good deal or not, all they want to know is you can afford the repayments.
Otherwise, we can also say that banks encourage people to take out a personal loan to purchase expensive doodads, therefore banks are responsible for people's bankrupcy???
A couple of the people on the show were saying, because banks lent them money therefore it can't be a bad deal. Hence, banks are also responsible for promoting the scams.
I disagree. Banks run a lending business. They don't know whether your deal is a good deal or not, all they want to know is you can afford the repayments.
Otherwise, we can also say that banks encourage people to take out a personal loan to purchase expensive doodads, therefore banks are responsible for people's bankrupcy???
The banks do have moral and legal responsibilities not to provide you with crippling debt.yuch. said:
In the '70s they were successfully sued by businessmen who had borrowed funds from them at low rates (called Gnome Loans at the time) denominated in O/S curriencies. The ozzie peso crashed and they could not meet their commitments. The only reason there weren't more suing was because most could no longer afford a lawyer.
This responsibility is now enshrined in various acts.
Thommo
yuch. said:
if they are doing a valuation though surely they have a pretty good idea of whether its a good deal or not though?
I think with personal loans people go into them without expecting to make money from what they are buying - so they know what they are getting themselves in for. Here though its the case of people buying supposed "investments" which fall dramatically in value as soon as they sign the documents. Given the banks knew the properties were badly overpriced I would say it is as much an "investment" as getting a loan for a new car or a stereo, but thats not how it has been packaged to clients
The banks are in business to make money, but the perception when they make a loan on a house is that they base the loan on the value of that house, dispite having a second mortgage on a second property. I'm sure if you went to pay the deposit & legals for one of these houses with cash, the bank would let you know about the valuation...
I would've thought that in a market like that, the prices are inflating every single day. Today price sets the new market price for tomorrow. The banks know that they are in a "booming" market and the prices will keep going up, until no one comes in to borrow anymore is when they realise that the properties are over valued. And it was their chance to make their money!!
So do you guys think that the banks should stop lending now, becasue people have too much debt? I don't think they are going to tighten the lending criteria as yet, as they are still making money.
So do you guys think that the banks should stop lending now, becasue people have too much debt? I don't think they are going to tighten the lending criteria as yet, as they are still making money.
Paul,paul_s said:
This is a very dangerous (and incorrect) assumption.
Bank's don't look at deals and say 'this is a good deal' or 'this is a bad deal'.
The bank simply looks at a deal and says 'this fits our lending criteria' or 'this doesn't fit our lending criteria'.
The do the valuation to assess whether YOU are telling the truth & to protect themselves. They've already checked you out thoroughly at this point - they don't care much about what you're borrowing for so long as they can sell it and get their money back if you reneg.
Don't EVER make the mistake of assuming that the bank's goals are the same as yours. They are not.
Cheers,
Aceyducey
PS: And don't call me shirley
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Geoff,
I must say I disagree with this point:
Ordinary people, with no knowledge, and with no knowledge on how to get that knowledge, have taken action in good faith. They didn't know better- and they did not have the resources to find better.
There is no excuse for anyone willing to outlay such a huge amount of money to say they did not have access to resources. All it takes to get some 'resources' is to walk into a bookshop and purchase a few books. If you don't want to pay for the books, go to the library.
I will never for the life of me understand why anyone would go into an investing decision without a sound knowledge of the investment they are looking at. There are those people who say they 'don't have the time to do research', which is a load of nonsense. Everyone has at least one hour a day to do some research. Either they take the time to do a little research or suffer the consequences of their own decisions.
If taking an hour out of their day to read a book or get on the net is too much, imagine the hours of time they will have to work potentially paying the price for making investment decisions they essentially have no idea about? Of course, that doesn't include those who made investment decisions only to have the Govt. do a backflip on them....
I must say I disagree with this point:
Ordinary people, with no knowledge, and with no knowledge on how to get that knowledge, have taken action in good faith. They didn't know better- and they did not have the resources to find better.
There is no excuse for anyone willing to outlay such a huge amount of money to say they did not have access to resources. All it takes to get some 'resources' is to walk into a bookshop and purchase a few books. If you don't want to pay for the books, go to the library.
I will never for the life of me understand why anyone would go into an investing decision without a sound knowledge of the investment they are looking at. There are those people who say they 'don't have the time to do research', which is a load of nonsense. Everyone has at least one hour a day to do some research. Either they take the time to do a little research or suffer the consequences of their own decisions.
If taking an hour out of their day to read a book or get on the net is too much, imagine the hours of time they will have to work potentially paying the price for making investment decisions they essentially have no idea about? Of course, that doesn't include those who made investment decisions only to have the Govt. do a backflip on them....
The Banks will always lend if they can cover their backsides.
If things go bad , simply they sell you up.
Like it or not , that is whenn the counter cyclical investor jumps off the fence and starts re-gathering properties to add to the investment trolley.
Crule but true
And post regarding Meriton having to finnance investors may give a clue that Banks are getting nervous about certain areas of market.
Guess onnly time will tell
If things go bad , simply they sell you up.
Like it or not , that is whenn the counter cyclical investor jumps off the fence and starts re-gathering properties to add to the investment trolley.
Crule but true
And post regarding Meriton having to finnance investors may give a clue that Banks are getting nervous about certain areas of market.
Guess onnly time will tell
Mark I unnderstand What you are sayinng. Majority of people here are the same.
However people out there just think they are going to make mega bucks from doinng nothing. I have seen people with Degrees cominng out of their back pockets fall for this.
People are LAZY.
Whenn I worked shift work inn Emergency Services there was a lot of time spennt sitting around. Most of that time i spennt studying what i was doing , or going to do. Everyone reckonned. i was wasting my time. Yet they would time and time againn come in with HUGE investment ideas from these mobs.
If I questioned it; they said "what would I know". So in the end I left them to their watchinng TV for Hours on end. Believing that everything that came along was correct.
Then in the end I left.
And yes they are still sitting there between jobs watching the footy, or what ever else will fill in the time.
But they just think I have been lucky.
Gee Cee.
However people out there just think they are going to make mega bucks from doinng nothing. I have seen people with Degrees cominng out of their back pockets fall for this.
People are LAZY.
Whenn I worked shift work inn Emergency Services there was a lot of time spennt sitting around. Most of that time i spennt studying what i was doing , or going to do. Everyone reckonned. i was wasting my time. Yet they would time and time againn come in with HUGE investment ideas from these mobs.
If I questioned it; they said "what would I know". So in the end I left them to their watchinng TV for Hours on end. Believing that everything that came along was correct.
Then in the end I left.
And yes they are still sitting there between jobs watching the footy, or what ever else will fill in the time.
But they just think I have been lucky.
Gee Cee.
Aceyducey said:Paul,
This is a very dangerous (and incorrect) assumption.
Bank's don't look at deals and say 'this is a good deal' or 'this is a bad deal'.
The bank simply looks at a deal and says 'this fits our lending criteria' or 'this doesn't fit our lending criteria'.
The do the valuation to assess whether YOU are telling the truth & to protect themselves. They've already checked you out thoroughly at this point - they don't care much about what you're borrowing for so long as they can sell it and get their money back if you reneg.
Don't EVER make the mistake of assuming that the bank's goals are the same as yours. They are not.
Cheers,
Aceyducey
PS: And don't call me shirley
I agree with Acey's comments in relation to banks wanting to make sure that the proposal fits into their lending criteria. We have mortgage brokers, accountants, financial planners, real estate agents at a drop of a hat who assist clients in establishing a better understanding, the banks are there to provide the products and funds to cater for those needs after you have approached the above. I was disgusted by Neil Jenmans comments that banks were part of the scam and that in a way were turning a blind eye. Don't we shop around for our groceries, our petrol, so if somebody flys us into another state would we not go back home a carry out some sort of a due diligence process??? I believe that some don't and are only looking into the "possible" dollars they can make. So we shopped around for groceries and petrol and they don't shop around for an item that costs $200k plus. So who is then to blame....?
Learner
P.s My suggestion is when you next find a property you would like to purchase, speak to your broker and find out whether they know the banks approved valuer panel and find out whether you can order the valuation through your broker and made out to the bank, whereby then giving you the opportunity to see what the valuation had come in at before being faxed to the bank as it goes to the brokers office first.
I thought all property purchases in Qld were covered by a form such as PAMD Form 30c which states:
"WARNING
Do NOT sign the attached contract without reading and understanding this warning. Do not sign if you feel pressured.
You should obtain:
Independent legal advice and
An independent valuation of the property"
Then there is the five day cooling off period!!
I don't like to see people losing their homes but what else does the Government have to do to protect these people!!
Come to think of it cigarette packets state that Smoking Kills and people still smoke
"WARNING
Do NOT sign the attached contract without reading and understanding this warning. Do not sign if you feel pressured.
You should obtain:
Independent legal advice and
An independent valuation of the property"
Then there is the five day cooling off period!!
I don't like to see people losing their homes but what else does the Government have to do to protect these people!!
Come to think of it cigarette packets state that Smoking Kills and people still smoke
Mark,Mark Laszczuk said:
With respect, I would disagree with your disagreement
To get the knowledge you are talking about, you have to KNOW that there is knowledge out there. And you have to know where to look.
People who belong to this forum have been able to acquire this knowledge- and it becomes second nature.
Other people don't have that opportunity.
I was taliking to a colleague today. three years ago, I told him:
. Avoid the Gold Coast marketers like the plague (he'd already booked a "free" flight to thge GC)
and
.Buy good property.
He listened on the first point. A forumite (then) told him what really happens up there. He's now very happy he only lost his $78 contribution to the free flight.
He did not listen on the second point. He only ever asks my about the property they have been marketing on the TV, if it is a good deal.
In late 1993 my wife and I were on our honeymoon in Surfers. We were young and naive - I had bought/paid /sold off an IP in Newcastle with my brother a year earlier - and felt that it was the right time to but again.
So we walked into what we thought was an RE agent - they showed us these lovely 3 bed townhouses in a suburb 15 mins in from Surfers.
Sounded like a good deal - 1st stage of a new development at 130k, next stage at 135k. Townhouses down the road are selling for 142k....blah blah blah.
The salesman was good - and we had no understanding of what the real price was . I always thought property goes up in value - I could see the dollar signs and so we purchased our 1st IP as a couple.
Conveniently down the road was a solicitor who could help us, and the lender was provided too. They valued the place - and told us nothing.
We did not need the plane flight, we were already there.
3 years ago the place was valued at around 95k, it is now worth close to 200k.
My opinion on all this:
1/The bank should have told us that the true value of the place was around 110k or whatever it was. How they can get a valuer in and say it was worth 130k is reprehensible. Obvious collusion there. The bank/lender should have been more honest.
2/We did not due diligence - being naive is not much of an excuse - but this is what most of the people who get sucked in by these scams are just like we were 11 years ago.
3/Don't buy when there is oversupply.
4/Why didn't 60 minutes do this story 10 or 11 years ago. Its been happening for so bloody long!!
5/Now with the cooling off period and "seek independent legal advice" that comes with every contract in LOUD letters (not what we had) - how anyone get caught by these scams is beyond me. Maybe people who still get caught by the two-tiered schemes should have the contract stating "seek independent valuation etc" tattooed to their head?
6/Property is forgiving. We thought about selling a few times, but both agreed that it would eventually rise in value again - and it has. Its not like the stock market - eventually (9 years later) you can correct your mistakes by being REALLY patient. Thats probably why I love property investing so much.
So we walked into what we thought was an RE agent - they showed us these lovely 3 bed townhouses in a suburb 15 mins in from Surfers.
Sounded like a good deal - 1st stage of a new development at 130k, next stage at 135k. Townhouses down the road are selling for 142k....blah blah blah.
The salesman was good - and we had no understanding of what the real price was . I always thought property goes up in value - I could see the dollar signs and so we purchased our 1st IP as a couple.
Conveniently down the road was a solicitor who could help us, and the lender was provided too. They valued the place - and told us nothing.
We did not need the plane flight, we were already there.
3 years ago the place was valued at around 95k, it is now worth close to 200k.
My opinion on all this:
1/The bank should have told us that the true value of the place was around 110k or whatever it was. How they can get a valuer in and say it was worth 130k is reprehensible. Obvious collusion there. The bank/lender should have been more honest.
2/We did not due diligence - being naive is not much of an excuse - but this is what most of the people who get sucked in by these scams are just like we were 11 years ago.
3/Don't buy when there is oversupply.
4/Why didn't 60 minutes do this story 10 or 11 years ago. Its been happening for so bloody long!!
5/Now with the cooling off period and "seek independent legal advice" that comes with every contract in LOUD letters (not what we had) - how anyone get caught by these scams is beyond me. Maybe people who still get caught by the two-tiered schemes should have the contract stating "seek independent valuation etc" tattooed to their head?
6/Property is forgiving. We thought about selling a few times, but both agreed that it would eventually rise in value again - and it has. Its not like the stock market - eventually (9 years later) you can correct your mistakes by being REALLY patient. Thats probably why I love property investing so much.
Frankly the way banks should be pulled up on this is via their own risk management policies....aka: NABperky29 said:1/The bank should have told us that the true value of the place was around 110k or whatever it was. How they can get a valuer in and say it was worth 130k is reprehensible. Obvious collusion there. The bank/lender should have been more honest.
If banks are valuing property higher than their value they are increasing their own risk profile.
Cheers,
Aceyducey
Here is the full 60 minutes transcript.
http://sixtyminutes.ninemsn.com.au/sixtyminutes/stories/2004_04_04/story_1077.asp
I agree with Geoff in that people often don't have the means, time, or even
know how, to look out for such well planned scams.
Everything just happens to be perfect, they are also under a lot of pressure
to sign up on the day. Not many people can resist and pull away from such
well presented deals. Remember that those people are not experienced
investors or they wouldn't be there.
I also believe that the banks are partly to blame because they know what
these properties are worth and are not telling their customers the result of
their valuation. We seem to forget that a lot of these people are the bank's
long term customers and in my view its the least a bank can do in return for
customer loyalty.
Who are the banks working for?
the con artists or their valued customer?
http://sixtyminutes.ninemsn.com.au/sixtyminutes/stories/2004_04_04/story_1077.asp
I agree with Geoff in that people often don't have the means, time, or even
know how, to look out for such well planned scams.
Everything just happens to be perfect, they are also under a lot of pressure
to sign up on the day. Not many people can resist and pull away from such
well presented deals. Remember that those people are not experienced
investors or they wouldn't be there.
I also believe that the banks are partly to blame because they know what
these properties are worth and are not telling their customers the result of
their valuation. We seem to forget that a lot of these people are the bank's
long term customers and in my view its the least a bank can do in return for
customer loyalty.
Who are the banks working for?
the con artists or their valued customer?
Some People are Easily Led
Kierank
And many buy bottled water because scamsters imply that tap water is bad for you - poisoned. Incredible!
Others buy pillows with magnets in them! (Why does this TV channel permit the advertising of products of dubious benefit?)
Some people are easily led. However this helps when the Govt of the day wants to send its youth to war.
Lplate
kierank said:I thought all property purchases in Qld were covered by a form such as PAMD Form 30c which states:
"WARNING
Do NOT sign the attached contract without reading and understanding this warning. Do not sign if you feel pressured.
You should obtain:
Independent legal advice and
An independent valuation of the property"
Then there is the five day cooling off period!!
I don't like to see people losing their homes but what else does the Government have to do to protect these people!!
Come to think of it cigarette packets state that Smoking Kills and people still smoke
Kierank
And many buy bottled water because scamsters imply that tap water is bad for you - poisoned. Incredible!
Others buy pillows with magnets in them! (Why does this TV channel permit the advertising of products of dubious benefit?)
Some people are easily led. However this helps when the Govt of the day wants to send its youth to war.
Lplate
