Fraudulent Chinese income documents discovered in big 4 bank home loans

Fraudulent Chinese income documents discovered in big 4 bank home loans
Fraudulent Chinese income documents discovered in big 4 bank home loans

ANZ Banking Group and Westpac Banking Corp have discovered they have each approved "hundreds" of home loans backed by fraudulent Chinese income documents, the Australian Financial Review has claimed.

They were allegedly manufactured with the help of dodgy mortgage brokers.

"Westpac staff undertake verification for foreign income including obtaining pay slips and bank statements in both the relevant foreign language as well as getting those documents translated," Westpac  spokesman David Lording said in response to inquiries from The Australian Financial Review.

"We have identified an issue with some loans that we are currently investigating." 

ANZ spokesman Paul Edwards confirmed the bank had experienced problems "with the income documentation of a small percentage of borrowers who rely on foreign income".

"Policy changes have been made to address this and we are also reviewing a number of brokers," Mr Edwards said.

ANZ and Westpac have also informed regulators and the police.

Asked whether the Chinese frauds had influenced Westpac's decision to withdraw from foreign lending, Mr Lording said "while foreign income verification is more operationally difficult, the primary driver of our decision was the changes in capital and funding requirements".

The paper advised today the lending boom to Chinese nationals for residential and commercial property in Australia was always "a little fraught."

"We never knew where the money was coming from," says the insider, who asked not to be named.

The unfettered lending to Chinese nationals for residential property came to a halt this week as the National Australia Bank followed its peers in tightening lending restrictions for foreign buyers.

"NAB has limited appetite for this segment which comprises less than two per cent of the NAB book," a spokesperson said advised The Australian Financial Review.

NAB's new rules, which will see increased loan to value ratios and the recognition of just 60 per cent of foreign earnings, will come into effect on Saturday.

China Residential Loans

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