Mortgage repayments: Why NSW has nearly half of Australia's home loan battlers

According to a Moody's latest investment report, New South Wales has 44 per cent of Australia's entire home loan delinquencies, and mortgagors in Sydney's fringe suburbs are most likely to lose their homes through mortgage stress.

Most of those are in Sydney's outer regions where more about 2.5 per cent of mortgages are more than 30 days behind in repayments, a Moody's Investors Service report said.

Australia's mortgage market is generally performing well, but not as well as four years ago

Australia's mortgage market has always performed well, with just a National figure of about 1.3 percent of mortgages in default due to slow mortgage repayments.
This figure is about ten times better than the US experience over the past two years, but is not as good as it was four years ago.

So why is Sydney having suburbs with double the National average?

1.  Overvalued house prices. Show me struggling homeowners and I'll show you overvalued homes. Many home buyers have paid too much for their homes and will suffer the most.
2. Commuting expenses. When you are in the outer suburbs you will be travelling longer to get to work, and that means high transport, car and petrol expenses, so you have less to spend on your mortgage. Rising petrol prices have not helped.
3. Starting families too early. Having kids is expensive and it means that many partners choose to stay home to care for their children. Starting a family may have been unplanned or seemed affordable two years a go with record low interest rates and the baby bonus. But the baby bonus doesn't go far and the the mortgage keeps rising. You cannot make mortgage repayment and feed a family on one income these days, so both partners need to be income earners.

The RBA tipped to raise interest rates

The troubles may be in front of those now struggling to meet mortgage commitments as the RBA is widely tipped to raise mortgage interest rates by up to 1.25% over the next twelve months and the Major banks looking to raise rates over this figure.
Softening house prices in these suburbs will not assist mortgage stressed homeowners to sell their way out of debt, so people behind in mortgage repayments will have to learn to tighten their belts over the next few years.

Mr Mortgage Advice. If you are struggling with mortgage repayments now, I suggest that you switch to a non bank mortgage lender with lower mortgage interest rates, and maybe a discounted one year mortgage rate to help you through the next twelve months. The major banks want to raise rates in addition to any Reserve Bank rate increases, so your need to out of that scenario now.

Registered Finance Broker uses Ponzi schemes to swindle clients out of $6 million.

Ponzi schemes nets $4m for female finance broker in Mormon Swindle.

All scam artists have a common trait.
They swindle their own because its easier. They are most trusted and liked within their own sub-cultures. Why try to con random victims when you can target  people who trust you and like you?
In this case its a Mormon woman in Perth conning other Mormon women in Perth. The second trick is to offer something too good to be true. In this case ultra high interest rate returns [yields].

50 year old Perth based female registered finance broker invents a Ponzi Scheme
A 50 year old has been charged with 24 charges related to defrauding many Perth residents of more than $4 million by selling shares in an invented land development scam she called "Mormonville", according to Perth Police.
The 50-year-old female registered finance broker is said to have selected her victims aged from 43 to 73 with many of them being age pensioners.
WA police said the woman in Perth's south, set up "illusory schemes" in 2007 to fund her personal investments and affairs.

The Finance Broker Hatched swindle in 2007, which became more targeted to Mormons as she no doubt discovered that's what victims liked to hear.
The woman deceived and mislead people to invest by offering exceptionally high rates of returns with little or no risk to invested money," a police spokeswoman said. This is the footprint of all Ponzi schemes.
The swindle allegedly grew from her selling investments in 'part-shares' of land but later evolved into a scheme that she advertised as Mormonville, which claimed to be a village-type development for members of the woman's own church.

Swindler grosses $6 million.
Victims were scammed out of between $40,000 and $400,000 each for a total of $4,212,388, according to police reports.
Those targeted ranged between 43 and 73 years of age, with many relying on the age pension as their sole sources of income.
WA Officers of the Fraud squad confirmed that between early 2007 and mid-2008, the woman acquired $6 million from victims and then drip feed small amounts of the money to meet the monthly 'dividends' to investors so as to give the deception of a legitimate operation. This is how Ponzi schemes usually operate.

This provided the illusion of real investment, and engendered more trust. Yet the alleged swindler spent the majority of the funds on her personal investments according to sources.

The Global Financial Crisis brought down the scam
The Finance Broker's swindle was undone by the Global Financial Crisis spooking any new victims, with the banks being able to give Government Guarantees on bank deposits. With new money not coming into her clutches, the dividends went unpaid, and soon the Ponzi collapsed.

Things to watch out for in Ponzi Schemes
You are in line to be scammed if you do these things:

1. You don't get a second opinion with a competent stranger. [someone who is removed from benefiting from the scheme, and has the expertise to judge the investment.]
2. The person running the scheme is trusted or is referred to you from someone you trust. It could be from your investment adviser, your lawyer, your accountant or your bank manager. This makes it seem unnecessary to do due diligence.
3. You have a lot in common, Ethnicity, language, faith, work, family background, gender and age group. You trust the person so well you don't think it necessary for you to take due diligence and have your legal representative or financial adviser to check it out. In fact it could be your account or lawyer who is promoting the swindle.
4. The offer seems too good to be true, but is made to seem very plausible. ["These sort of deals are normally only available to the rich, who keep it quiet." "The rich get richer and the poor get poorer. Here's why"]  
5. It pushes your "Greed Button". You reason, or are told to reason that you'll have your money back soon and then your investment will be free and clear. ["Double your money and take it away." or " Have your cake and eat it too!"]
6. Pride. You been told to hand over your financial affairs to your children and you want to show them you know how to manage money.

Mortgage Broker top performer now faces jail over massive home loan fraud

A few short months ago a New Zealand mortgage broker was hailed as her company's top performer in a low mortgage location, now the 43 year old mother faces 10 years behind bars after being convicted of fraud. 
The mortgage broker pleaded guilty in a Wellington District Court to using scissors and a photocopying machine to create false documents to write more than NZ$15 million in phoney mortgages.
Some unsuspecting clients have lost their homes and others are struggling to continue to make their mortgage payments.
The woman's branch office starred as the best performing in the company, supported by the fake mortgages, between September 2006 and July 2008 - and it was this that lead to her undoing.
Never meet your heroes
The parent company began an audit into her loan applications because her branch's outstanding performance was at odds with its geographical location.
Most of the loans obtained through the woman's actions are being repaid.
She has been remanded on bail until 27 January for sentencing.