Massive “No Value” Mortgage Insurance Fraud by BIG

The article in the Sydney Morning Herald Money section today by Nina Hendy touched on but did not explain the greatest financial services fraud operated in Australia today by banks and insurance companies.

Our associate, GBAC took on one bank & insurance company on behalf of one borrower who asked for help, and won. The borrower walked away without repaying the debt. We will take them on for you any time.

Here is how the bank run scam works. When lending money for a home loan the Big Bank requires the borrower to pay a premium, say $15,000 to an insurance company for Mortgage Insurance. The bank may actually own the mortgage insurance company. The borrower pays the premium. Years later through some disaster, the borrower defaults. The bank claims on the mortgage insurance and recovers the whole debt from the insurance company. In doing so it assigns its rights under the mortgage loan to the insurance company. The insurance company then owns the debt, the mortgage and the title deeds to the home. The insurance company then sues the borrower to repay the loan back to it in full.

Simple. Better than tax fraud or armed robbery. The borrower paid the premium but did not get insurance cover. The insurance company received the $15,000 premium but recovered everything it paid out from the borrower who paid the premium. These guys are clever. You have to hand it to them.

The sensible thing would be borrower insurance where the borrower paid the premium and received the cover with which they paid out the bank loan. But such a plan would never allow bank or insurance bosses to earn $30,000 a day. What else but crime pays that sort of money?

History

The Federal government in 1965 established the Housing Loans Insurance Corporation to provide the home loan insurance. Run by the government it was honest because it worked for the Australian people. My wife and I were lucky enough to borrow 95% of our home price that way. But when banks and insurance companies were privatised by politicians to reward their political donors, honesty went out the window and the profiteers who took over banking and insurance, robbed everyone they could.

This is like car insurance companies paying your claim for the car being written off, then suing you to recover the money. You would get no value from your policy. LMI is like that!

If you or anyone you know is caught up in this shoddy Lender’s Mortgage Insurance fraud, please ask them to contact GBAC for assistance. Australians should not tolerate this fraud that is primarily aimed at young Australians with young families. These financial fraudsters should be gaoled. But at least you can fight their claim on their “No Value” insurance policy. There is every chance of you walking away too instead of paying a premium for no value.

Don’t be robbed by The BIG- Bank and Insurance Gang.