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ASIC has warned the public about mortgage fraud while praising brokers for trying to clean up the sector.
ASIC deputy chair Peter Kell told Sydney radio network 2GB that consumers need to be aware of the “danger signs” before entering the market.
“We don’t want to see the lenders, we don’t want to see the brokers, we don’t want to see, ultimately, the consumer ending up over their head,” he said.
“The message for consumers here is, if your broker seems to be encouraging you to take out a lot more than you’re comfortable with, to maybe stretch the facts about your income or something like that, that’s a warning sign.”
Mr Kell said loan fraud was not systemic but the number of cases is higher than it should be.
“There’s no doubt that in many of these cases, the underlying motivator for the fraud is an attempt to gather more commission on the part of the broker by securing a loan that’s bigger than it should be or, indeed, securing a loan where there shouldn’t have been one at all,” he said.
However, ASIC was reassured that the industry is trying to clean up its act, he added.
“[Some] of the complaints coming to us are from lenders and other brokers who are concerned about what they’ve seen,” Mr Kell said.
