Australia’s banking leaders and officials signaled a need to act on mortgage fraud after a Commonwealth Bank-commissioned review suggested doctored loan documents across the industry could amount to around A$1 billion ($700 million), and called on banks to nab those responsible.
Nab Push Targets Brokers Seen in A$1 Billion Scandal
Daniel Mulino said anti-money laundering rules and the fight against scams are a key focus as the industry confronts the scale of possible fraudulent mortgages. The Australian Financial Review earlier said a Commonwealth Bank-commissioned report indicated loans based on doctored documents across the wider industry could exceed an earlier A$1 billion estimate.
Banks, Watchdog and Credit Firm Responses
The AFR said top banks are working with the financial crimes watchdog to understand the extent of the potential mortgage fraud scandal. Consumer credit reporting firm Equifax found that a number of customers who had obtained mortgages using fraudulent documents had also taken out loans with other banks, the AFR said. Equifax did not reply to requests on the report.
What Bank Leaders Want Next
Westpac’s chief executive, Anthony Miller, highlighted that borrowers misrepresenting income or asset values is a longstanding banking problem and that growing sophistication is a challenge every bank has seen. He said banks need to work collectively to share information on problem borrowers and should seek prosecution of home loan brokers found to have submitted doctored information. That stance has reinforced calls to nab and prosecute brokers implicated in the doctored-document cases.
Mulino added that Australia may need more than current anti-money laundering measures, saying, “I suspect that we are not at the bleeding edge” in the area of possible fraudulent mortgages. The comments underscore pressure on regulators and banks to tighten detection and enforcement as investigations continue.
