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.