$500 billion of ‘liar loans’ in Australia, UBS reports

Half a trillion dollars’ worth of “liar loans” are propping up the Australian banking sector, new research from UBS suggests – as per news from domain.com.au.  

About one-third of Australians were not completely truthful on their home loan application over the past 12 months, marking a significant increase on the previous year, according to a 907-person survey, which UBS presents with a 95 per cent confidence level.

UBS banking analyst Jonathan Mott said 26 years of unbroken GDP growth had led to “a large level of complacency within the economy” and that “more needs to be done” by banks to address the problem. Many mortgagors might have overstated their income and assets, while others might have understated their living expenses and liabilities.

ANZ is named as the bank with the worst record, according to the survey, which showed just 55 per cent of respondents with a mortgage from the bank were completely accurate, which compares with the industry’s official 99 per cent confidence level.