Data shows increase in fraudulent home loan applications

ABC NEWS (Australia)

Some Australians desperate to break into the property market are resorting to lying on their home loan applications, creating fake documents that either overstate their income or understate their expenses. Data from a document fraud detection company suggests there's been a three fold increase in fraudulent applications since interest rates started rising about a year and a half ago.

Transcript

00:00 So, they're getting very inventive and it's become much easier to do with online tools

00:05 available to do it. So, the two ways they're doing it, if they want to understate expenses,

00:12 they can basically get a template of what looks exactly like a bank statement and they

00:18 might be able to take out usual expenses that they have there. And the other way they're

00:23 lying is that they're basically using their payslips, so taking their payslips and overstating

00:31 their income, so they might change the income they're earning, the tax, all that sort of

00:35 stuff. And, you know, it's becoming far more common. I spoke to Sean Quigleyani, here's

00:41 what he had to say.

00:44 Somebody else might put together a fake payslip who's a contractor and they need to be seen

00:49 as a full-time employee to successfully get access to the credit that they need. We see

00:55 other examples of people removing transactions from their bank statements to only show that

01:04 they might have no kids, but they have kids. So, the things, people can be very creative

01:11 and there's many levers that you can pull.

01:14 So, Nassim, what's the reason more people are lying?

01:18 Yeah, so Sean Quigleyani is the guy that you just heard from and he detects for big banks

01:25 as well as other lenders where the documents are fraudulent. And one of the reasons he

01:30 suggested is that people are really under a lot of pressure to try and break into the

01:35 property market. They really want to get a home loan, but with higher mortgage repayments,

01:40 with the increasing cost of living, with higher house prices, it's now become much harder

01:45 to try and crack the property market. And in addition to that, as you've seen, it's

01:50 actually quite easy for people to make up documents, to go on the internet and get these

01:58 documents. So, that's increased, that's resulted in the threefold increase in these fraudulent

02:06 applications since interest rates started rising in May 2022. Here's some of what Sean

02:11 has to say about it.

02:13 You can actually just edit a PDF. You click this button, it opens the PDF up in an editable

02:21 mode. And then you can change the dates, you can change the financials. And so, like if

02:29 you wanted to change the rate here, you can change the hourly rate, change the gross income,

02:36 the principal income, and of course, the net income, change the tax as well. And then that

02:45 is complete.

02:48 And so, you heard from Sean Quigleyani there. Today, the Reserve Bank is expected to meet

02:53 for the final time this year, is expected to leave interest rates on hold. But this

03:00 might not be the end of rate hikes. There is a possibility that if inflation doesn't

03:05 come down within the Reserve Bank target range, then you might see rate hikes by February

03:11 next year again. And this is happening in an environment where 450,000 Australians are

03:17 about to roll off fixed mortgages onto higher variable rates. So, if there are further rate

03:23 rises, that will leave a lot of Australians in a really tough position.

03:26 [BLANK_AUDIO]

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