Lo-doc loans bring mortgage broker unstuck
The corporate regulator has commenced proceedings in the Federal Court of Australia against a mortgage broker for his conduct in applying for two lo-doc loans for one of his clients.
The action comes after an Australian Securities and Investments Commission (ASIC) investigation into the activities of Kelvin Skeers as an employee of Tonadale, trading as ACT Mortgages, found his conduct to be allegedly unconscionable, misleading, and deceptive.
According to the corporate watchdog, Skeers allegedly breached the ASIC Act when he arranged two lo-doc loans that he knew his client couldn’t repay.
In doing so, ASIC also alleges the Canberra-based broker misrepresented his client’s financial position on the lender’s application forms and misrepresented to the borrower the information that would be included on the loan application forms.
Through its action in the Federal Court, AISC is looking to secure several orders including one declaring Tonadale and Skeers engaged in misleading and deceptive conduct when arranging the loans and another that will retrain Skeers from lodging further loan applications in certain circumstances.
The regulator is also seeking court orders ensuring Tonadale and Skeers pay compensation to the borrower and requiring Tonadale to conduct a review of its internal control procedures and implement compliance, education and training programs for tis staff.
The matter is scheduled to go before the Court for directions on November 9, 2006.
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