ANZ, Westpac discover mortgages backed by dodgy foreign income

By |

Two of Australia’s largest lenders have uncovered mortgages that have been backed by questionable foreign-income documentation, forcing them to stop approving such loans.

Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. have identified issues with some loans that rely on foreign income for approval, the two lenders said in separate e-mails.

The statement comes after the two lenders last month stopped loans to offshore customers who aren’t citizens or who don’t hold appropriate residency visas. The banks also disallowed the use of foreign income for such customers to qualify for a loan.

The changes made by the biggest banks in the country are part of a broader scrutiny of foreign buying of Australian homes, which has helped drive a 55 percent jump in home prices across the nation’s capital cities in the past seven years. Rising demand, particularly from China, has triggered community concern that locals are being priced out of the property market, prompting the government to tighten scrutiny of foreign investment.

“Our delinquency rate on foreign-income loans is lower than the portfolio average, and a large proportion of these loans are ahead on repayments,” Westpac’s Sydney-based spokesman David Lording said in an e-mail. “Overseas borrowers are also well secured.”

ANZ said the issue plagued only a “small number” of borrowers and the loans were performing better than average.

“All our analysis to date indicates the issue is relatively small and there is no material credit risk issue involved,” the lender’s Melbourne-based spokesman Stephen Ries said.

Bloomberg
 

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : upper kedron , revesby hts , harris park , melton , marrickville

go back

Get help financing your investment



Do you need help finding the right loan for your investment?


When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here