A Perth-based mortgage broker told the ABC's 7.30
current affairs program that her firm, Mortgage Miracles, obtained "low doc" investment loans for customers by using falsely inflated earnings and assets.
Kate Thompson told the ABC that banks coached brokers to include projected rises in house prices as income.
She said her firm also falsely inflated earnings and assets.
Controversy over the extent of this problem has circulated ever since low documentation loans - where the borrower, in effect, "stated" their income - since this form of loan became more popular in the early to mid 2000s.
7.30 interviewed Denise Brailey, from the Banking and Finance Consumers Support Association. Brailey is a long-standing researcher on banks' practices in this area and was one witness as last week's hearing of the Senate's economics committee on the banking industry.
Brailey has also assisted with a series of articles this year in The Australian that shine a light on aspects of lender and broker misconduct around applications for low doc loans.
"Emails from the banks to the brokers [shows] bank officers instructing the brokers how to have no-loan mortgage insurance, no income necessary, no assets and liability, virtually just get a signature on a document, send it in and we'll give this person, no matter what their income or affordability criteria is, give them a $500,000 loan," Brailey told 7.30.