The Miami Herald found over four thousand brokers who had criminal records. In a single investigation, these brokers had committed more than $85 million in mortgage fraud. The broker’s job was to set up straw buyers and then steal their money. They used fake signatures and bank statements to get the loans. They also fabricated letters of employment and payslips. The investigation revealed how the BOM detected the fraudulent activity, how the broker got away with it, and the blame-shifting between the banks.
The ASIC investigation into X Finance, which was behind Zenik, revealed that the same fraudulent documents were used to obtain loans. Westpac wrote off $17 million of loan obligations to Zenik. Applicants made false claims about owning the homes, including owner occupation. They concealed their debts from banks and forged documents. Some applicants posed as employees and pretended to be self-employed. These brokers also produced many of the documents overseas.
The ASIC informed Zenik of the Sun City scam, but many of the loans were not cancelled. While the companies suspended the brokers, trailing commissions are still being collected. Experts estimate that millions of dollars in loans were obtained fraudulently. In one case, Zenik’s Chinese foreign buyer mortgage applications were unable to be verified by St George Bank, ANZ, and Westpac. Macquarie followed up on the application after receiving the suspicious documents.