FMF [First Mortgage Fund]

Here's a new thread if there is anyone out there who has something to say about what's happened to their investment in the First Mortgage Fund.

Might be better to get away from the CIY thread. Actually, the further away from CIY as possible.

Let's see.

Well, CPL is being wound up now. Let's pretend that CPL should have informed us that the fund was in trouble (if the fund was in trouble) when it deconsolidated the fund. Since it didn't tell us the fund was in trouble then it would be liable for certain breaches of law - namely s. 52 TPA breaches for telling us the fund was strong, when it was not - and, s. 601FC(1)(c) breaches for making its way out and leaving us there.

So, what's my point? Well, my point is this that the FMF is not standing in line as a creditor because no action was taken to establish our right to do so.

In my opinion, its the first loss of opportunity we are making as investors in the FMF. The CBA is in there looking after its interests, but who is looking after ours? ASIC should be, but it isn't. Is Balmain? I guess not!

What will be the next loss?

This is what the CBA done to us. While it wouldn't permit City to pay distributions/redemptions (not that I think City wanted to), in March 2009 (yes, this year) it would allow City to pay itself $17.8m (via CP1), and it would allow the fund to pay $18m to CP1 so CP1 could pay the CBA to protect the FMF from losses from CP1's insolvency.

$17.8m was secured by the 'Waves Motel' in northern NSW. The debt was paid out by MP Pacific Investments Unit Trust/Pty. Ltd. (not sure) and the money stayed with CP1/Marina Cove Pty. Ltd. with miserable security at Martha Cove - no one will buy it, but the CBA and City sold it to us (via loans supported by 'first' mortgages there).

In its media release City stated that the $17.8m was used to 'reduce CP1s debt to City' - they didn't even have the balls to say that the money was paid to City.

So, we are now where the $18m was supposed to save us from. And, up the barrel following the $18m was another $15m, and another. And what security did the fund end up with? more first and 'second' mortgages down at the cove. If the first mortgages are no good, how much value are the second mortgages - not a murmur from investors.

City, and its cohort, the CBA, took $36m out of the fund to ultimately benefit (as I understand it) the CBA - both payments going to the CBA to write down City's and CP1's debts to the CBA (the risky debts) while leaving the FMF's debt unpaid.

To boot, there was a $20m deal on the Gold Coast taken over by an 'unnamed bank' (gee.. I wonder if it was the PGA (Piggy Bank of Australia)?). What was the fund's loss there? oh! probably not very much, maybe $5m or $6m - small bikkies.

And to cap it all off, the development land known as 'Pacific Beach' which owed the fund between $160m and $210m (not accounting for the fees CIty would have ripped from Foresight and the FMF - not sure if the amount includes interest either) was knocked off for $80m because the developer (one may as well say the FMF) didn't have $35m.

So, they took $36m in March 2009 to 'save' City and CP1 from the Piggy Bank of Australia, and left us to lose up towards $100m at Broadbeach.

What more should we expect from the PGA (before known to investors as the CBA).

And not even a little 'groan' from the investor base. And the manager, well, it seems happy that $45m goes back to the PGA - something a real estate agent accomplished for which the current manager shouldn't take any credit - a child could have done it. It was a giveaway.

The poor old investors have lost millions and millions, and their voices are still - not a murmur of discontent.

The good folk out there want a simplistic explanation of what went wrong.

So, here's a simple explanation of how at least one related party transaction was put together (in my opinion). The graphic is self explanatory and as simple as I can put the myriad of details.

The constructors the plan must have consumed an enormous amount of their time putting the plan together.

My questions are:-

(1) just where did those guys at City ever get the time to run the FMF?
(2) would the PGA (piggy bank of Australia)have given the relatives loans on the sames conditions as the FMF did? and;
(3) what steps did the PGA take to circumvent the FMF's rights as first mortgage holders to ensure payments to the PGA by relatives?

It's now the fourth day and no reply.

Copy of text sent to Trilogy via their website
on Friday, 28 August 2009.

Dear Sir/Madam,
Please advise me of the following:-
1. Wrt to 'Pacific Beach', how much has been loaned by the FMF to Foresight? How much by Fortress? What other costs will be added to these debts (legals etc.)?
2. What is the impaired value held for this loan?
3. Why didn't the development proceed?
4. will Balmain/Trilogy be charging lenders from the FMF any 'direct' fees? If so, what are the fees, and the rate of each fee?
5. Restatement of Qs 1 & 2, but wrt Grande Pacific & Teak and/or other co-investors.
I look forward to your early reply.
Thank you.


The following is a copy of text also sent by Trilogy's website
on Friday, 28 August 2009.

1. When will Balmain inform members of the FMF that Mr. Ryan (a senior member of Trilogy management) has been found by a court to have breached a client's trust?
2. Why was KPMG retained when there is clearly a number of members who are not happy with KPMG's performance?
3. Why wasn't another facility provider obtained when there is clearly a number of members who are not happy with the FMF's relationship with the CBA?
4. Why was City Pacific staff encouraged to join Balmain/Trilogy when there is clearly a number of members who are not happy with the staff of City Pacific?
5. Why did Mr. Bacon think that Mr. Ellis was 'tenacious' when Ellis was using our money to fight? I think we'd all agree that everyone could be tenacious using other peoples money, and in circumstances such as City causing members to lose so much of their investments - doesn't Mr. Bacon have any sensitivites to the feelings of the members of the FMF?
6. How is it possible to conduct an objective evaluation of the legal issues when so many of the original 'mob' have been coupled up to the the new train (Balmain/Trilogy)
7. Why was it possible to tell the CBA (and BRW) the future of the FMF, but not tell members of the FMF first?
8. Why haven't members been given a clear and concise plan as to Balmain/Trilogy's vision of the future (or end) of the FMF?
9. What is EXACT position of the FMF with respect to its obligations to the CBA, Fortress, and Teak Capital? (This information must be straight forward and easy to explain to members, why haven't we been told?)

Well, City were raking off $20m/year in 'direct' fees - those fees paid by lenders to City Pacific directly (not via the FMF). How much they took over the past 18 months I don't know - but, they did.

Now, we have Balmain who promised ONE fee - 1.5%. Does ONE fee include 'direct' fees, or will they be charged separately (that is, 1.5% to the FMF and 'direct fees from the lenders)? This is but one of the questions I asked of Balmain on Friday and have not yet received an answer.

A unit holder phoned Balmain one time per week for three weeks (last one today) and asked about these fees, and the best answer to date from 'Adam', an employee of Balmain, is 'We haven't determined that yet'.

Unit holders should realise that since the lenders from the FMF are mostly in default, then any money that goes to Balmain in 'direct' fees, is money directly out of our pockets.

My advise to unit holders is to contact their manager, via their 1800 number or via the website and ask the question - 'is Balmain charging any other fees to lenders from the fund, than the 1.5% it's charging the FMF?'

Another tidbit from Adam was that there will be no update on Balmain's website until 'all the way up to October'.

I have copied the valid questions in the previuos posts and sent them to BT this evening. I have also express my concern about the lack of feedback from BT to the unitholders and reminded them who they are working for!

I am going to write to ASIC yet again tomorrow....although I think I am wasting my time.

Fleetz

fleetz said:

I have copied the valid questions in the previuos posts and sent them to BT this evening. I have also express my concern about the lack of feedback from BT to the unitholders and reminded them who they are working for!

I am going to write to ASIC yet again tomorrow....although I think I am wasting my time.

Fleetz

Click to expand...

There are a lot of people concerned, but I'm just not sure how many will engage with the new manager and seek disclosure of general information that will help investors know the reality of their situation.

Generally speaking, I think the questions are reasonable and should be answered without disclosing 'confidential information'. It was within the guise of 'commercial-in-confidence' that allowed City to virtually do as it pleased.

For me, I'm pleased that you took the trouble to press Balmain for answers - I only wish more would do likewise.

The issue about (1) direct fees, (2) 'co-investors', (3) the manager's intentions are important to unit holders and should be fleshed out.

Look mama, a unit holder in the FMF...

Yes Forrest, so many of them seem to bury their heads in the sand, but this
one seems to be even more insecure - he's buried his head in the footpath!

If there is anyone out there who doubts that the FMF was in trouble in 2007, take a look at this graph showing unit holdings in the FMF, and (in the table below) included with defaults and facility (cash at bank not included and debt (bank interest & management fees) not included).

Now, would you have invested in the FMF in late December 2007 or up to March 2008 if you knew this information? The manager knew and deconsolidated - how convenient. Did we lose our best ever chance of indemnity?

(as they like to say on this forum) ONYA ASIC - just love the way you let us down.




Now, this graph represents my view of the decision making process of the PGA. If no questions are asked, then the money is just given.

If questions are asked, then the PGA must not have been concerned with the answers, so, the FMF slid down the DON'T CARE path to get the increases.

There is no doubt in my mind, that if the PGA cared, then it would not have increased the fund's facility by $1.

ONYA PGA.

hi all
I would be very interested to talk to anyone that has invested in cp or cp1/fmf within in the last 2 years
the amount invested must be over 20k
I would like mellifuous to email me as there is no link on the website for contact details
you can send an email to grossrealisation@hotmail.com and I will reply from there.
I understand both groups and am in contact with the main players in all three entities that have got issues at the moment and have a couple of people that I am assisting at the moment.
my group has a financial gain in debt resolution and as such I am disclosing that up front.
I am not a financial advisor but would be interested in the group or advisors that recommended all three entities
thanks in advance

My Questions​

Dear Sir/Madam,
Please advise me of the following:-
1. Wrt to 'Pacific Beach', how much has been loaned by the FMF to Foresight? How much by Fortress? What other costs will be added to these debts (legals etc.)?
2. What is the impaired value held for this loan?
3. Why didn't the development proceed?
4. will Balmain/Trilogy be charging lenders from the FMF any 'direct' fees? If so, what are the fees, and the rate of each fee?
5. Restatement of Qs 1 & 2, but wrt Grande Pacific & Teak and/or other co-investors.
I look forward to your early reply.
Thank you.

1. When will Balmain inform members of the FMF that Mr. Ryan (a senior member of Trilogy management) has been found by a court to have breached a client's trust?
2. Why was KPMG retained when there is clearly a number of members who are not happy with KPMG's performance?
3. Why wasn't another facility provider obtained when there is clearly a number of members who are not happy with the FMF's relationship with the CBA?
4. Why was City Pacific staff encouraged to join Balmain/Trilogy when there is clearly a number of members who are not happy with the staff of City Pacific?
5. Why did Mr. Bacon think that Mr. Ellis was 'tenacious' when Ellis was using our money to fight? I think we'd all agree that everyone could be tenacious using other peoples money, and incircumstances such as City causing members to lose so much of their investments - doesn't Mr. Bacon have any sensitivites to the feelings of the members of the FMF?
6. How is it possible to conduct an objective evaluation of the legal issues when so many of the original 'mob' have been coupled up to the the new train (Balmain/Trilogy)
7. Why was it possible to tell the CBA (and BRW) the future of the FMF, but not tell members of the FMF first?
8. Why haven't members been given a clear and concise plan as to Balmain/Trilogy's vision of the future (or end) of the FMF?
9. What is EXACT position of the FMF with respect to its obligations to the CBA, Fortress, and Teak Capital? (This information must be straight forward and easy to explain to members, why haven't we been told?)

The 'Cop Out'​

Today, I received this email from Trilogy.

"... In response to your email, the case relates to matters which occurred 10 years ago. The Court found no evidence of dishonesty or knowledge that could be attributed to Mr Ryan; however as a partner of a law firm he was liable for the actions of employees.

Given the short time frame in which the Fund is required to lodge its financial statements it is prudent to retain the existing firm at this stage for its familiarity and experience with the Fund.

There was no general encouragement of City Pacific staff to join BalmainTRILOGY. Several City Pacific staff have assisted with the file transition and loans information on a temporary contracted basis. They are not employees. We see no reason why this should compromise our legal review.

We are in the early stages of completing an asset review and results are expected to be available on or before the end of October. As you can appreciate, the scale and complexities involved mean that we are not yet in a position to provide specific direction on the future of the Fund.

Dialogue regarding the Fund’s loan facility with the CBA continues, however at this stage it is too early to provide results of these discussions. Investors will be kept informed as we progress this issue.

We invite you to make an appointment to discuss this if you require further information. ..."

Comments:-

1. The case with respect to a breach of a client's trust is know as Jessup's Case. It's sad to see the manager attempting to mislead me (breach of s.52 TPA) by referring to the ASIC case which did not involve a breach of trust, but rather involved misrepresentation and fraud.

Jessup's Case
http://archive.sclqld.org.au/qjudgment/2006/QSC06-003.pdf

ASIC Case
http://www.asic.gov.au/asic/asic.nsf/byheadline/06-172+Queensland+investors+recover+losses+in+failed+solicitors+mortgage+scheme?openDocument

2. The manager is silent as to the fact of 'direct' fees - I wonder why? Is Trilogy charging 'direct' fees? Why won't they say that they are not? This matter should be resolved.

3. In his masterpiece in BRW, the Msr. Baccon stated (paraphrased) that there was only 53 loans, now, when pressed, it's all changed to "..As you can appreciate, the scale and complexities involved ...' in order to evade simple questions like:- the amount of debt, the amount of interest, and the involvement of the so called 'co-investors'.

I want to know simply (and it's got nothing to do with the so called 'asset review') how much do we owe the so called 'co-investors', how much is owed on the 'Pacific Beach' deal and how much interest is owing - none of these issues relate to the 'asset review'.

4. The fact that ex-employers of City are 'not employees of the Trilogy'. I guess he means that they are contracted - and therefore doesn't see that they would compromise any investigation.

Well, I think they do - do anyone else think that? Where is the objectivity?

5. Needs KPMG to assist with the RG45? Why? it's not an auditors job to fill out forms, it's an auditors job to 'audit' (or so it should be). Is Trilogy using KPMG to provide accounting services too? Come on guys, get real - any auditor could do the job - get rid of KPMG - let's get objective.

The letter does not answer my questions, and attempts to mislead me.

I am not pleased at all. I don't want to make an appointment for a meeting, I want proper answers to all of my questions.

How about other readers?

I'm going to resubmit the questions. Maybe second time lucky?

grossrealisation said:

hi all
I would be very interested to talk to anyone that has invested in cp or cp1/fmf within in the last 2 years
the amount invested must be over 20k
I would like mellifuous to email me as there is no link on the website for contact details
you can send an email to grossrealisation@hotmail.com and I will reply from there.
I understand both groups and am in contact with the main players in all three entities that have got issues at the moment and have a couple of people that I am assisting at the moment.
my group has a financial gain in debt resolution and as such I am disclosing that up front.
I am not a financial advisor but would be interested in the group or advisors that recommended all three entities
thanks in advance

Click to expand...

I suppose I don't blame these guys/gals wanting to get in on the act - like the old style lawyer who rushed to the car smash to hand out his/her card.

What I can't quite grasp is why they always want to take such a greedy slice of the action.

Why pay up to 30% for a service you buy for just a few percent - and if you win, you'd even get your money back.

It's bad enough to lose money, but worse to lose it in a class action driven by a lawyer.

Be the driver, not the driven.

Do Balmain take 'direct' fees from the FMF?

Balmain won't say 'yes' or 'no' to taking 'direct' fees out of the FMF.

Do members of the FMF (ex City Pacific FMF) think they should?

Well, Timmy, I thought about that, but, it seems to be an issue that may have a life of its own.

But, up to you, I'm too old to argue. If you want to delete, then you have the power.

Thanks.

Re: Do Balmain take 'direct' fees from the FMF?

Shouldn't this be in the FMF thread?

Re: Do Balmain take 'direct' fees from the FMF?

I've made this posting on the FMF, but I'll try to keep this issue on this thread in order that is may be more easily dealt with.

There are a lot of questions that Trilogy should answer. As I understood it, Trilogy promised to be transparent and keep unit holders informed. Instead, it has gone out in an arrogant way to gloat its success in BRW. The manager raised matters in BRW that should have been rightly raised directly with investors.

I think Msr. Baccon should be more forthright with members and disclose issues. If its good enough to tell individual unit holders information, its good enough to tell us all.

This is the interchange of 2 x lots of questions and one answer together with some comments I have made. I re-submitted my questions to Trilogy this morning via their website.

I would appeal to investors in the FMF to press Trilogy for answers, proper answers.

My Questions


Dear Sir/Madam,
Please advise me of the following:-
1. Wrt to 'Pacific Beach', how much has been loaned by the FMF to Foresight? How much by Fortress? What other costs will be added to these debts (legals etc.)?
2. What is the impaired value held for this loan?
3. Why didn't the development proceed?
4. will Balmain/Trilogy be charging lenders from the FMF any 'direct' fees? If so, what are the fees, and the rate of each fee?
5. Restatement of Qs 1 & 2, but wrt Grande Pacific & Teak and/or other co-investors.
I look forward to your early reply.
Thank you.

1. When will Balmain inform members of the FMF that Mr. Ryan (a senior member of Trilogy management) has been found by a court to have breached a client's trust?
2. Why was KPMG retained when there is clearly a number of members who are not happy with KPMG's performance?
3. Why wasn't another facility provider obtained when there is clearly a number of members who are not happy with the FMF's relationship with the CBA?
4. Why was City Pacific staff encouraged to join Balmain/Trilogy when there is clearly a number of members who are not happy with the staff of City Pacific?
5. Why did Mr. Bacon think that Mr. Ellis was 'tenacious' when Ellis was using our money to fight? I think we'd all agree that everyone could be tenacious using other peoples money, and incircumstances such as City causing members to lose so much of their investments - doesn't Mr. Bacon have any sensitivites to the feelings of the members of the FMF?
6. How is it possible to conduct an objective evaluation of the legal issues when so many of the original 'mob' have been coupled up to the the new train (Balmain/Trilogy)
7. Why was it possible to tell the CBA (and BRW) the future of the FMF, but not tell members of the FMF first?
8. Why haven't members been given a clear and concise plan as to Balmain/Trilogy's vision of the future (or end) of the FMF?
9. What is EXACT position of the FMF with respect to its obligations to the CBA, Fortress, and Teak Capital? (This information must be straight forward and easy to explain to members, why haven't we been told?)

The 'Cop Out'


Today, I received this email from Trilogy.

"... In response to your email, the case relates to matters which occurred 10 years ago. The Court found no evidence of dishonesty or knowledge that could be attributed to Mr Ryan; however as a partner of a law firm he was liable for the actions of employees.

Given the short time frame in which the Fund is required to lodge its financial statements it is prudent to retain the existing firm at this stage for its familiarity and experience with the Fund.

There was no general encouragement of City Pacific staff to join BalmainTRILOGY. Several City Pacific staff have assisted with the file transition and loans information on a temporary contracted basis. They are not employees. We see no reason why this should compromise our legal review.

We are in the early stages of completing an asset review and results are expected to be available on or before the end of October. As you can appreciate, the scale and complexities involved mean that we are not yet in a position to provide specific direction on the future of the Fund.

Dialogue regarding the Fund’s loan facility with the CBA continues, however at this stage it is too early to provide results of these discussions. Investors will be kept informed as we progress this issue.

We invite you to make an appointment to discuss this if you require further information. ..."

Comments:-

1. The case with respect to a breach of a client's trust is known as Jessup's Case. It's sad to see the manager attempting to mislead me (breach of s.52 TPA) by referring to the ASIC case which did not involve a breach of trust, but rather involved misrepresentation and fraud.

Jessup's Case

http://archive.sclqld.org.au/qjudgment/2006/QSC06-003.pdf

ASIC Case

http://www.asic.gov.au/asic/asic.nsf/byheadline/06-172+Queensland+investors+recover+losses+in+failed+solicitors+mortgage+scheme?openDocument


2. The manager is silent as to the fact of 'direct' fees - I wonder why? Is Trilogy charging 'direct' fees? Why won't they say that they are not? This matter should be resolved.

3. In his masterpiece in BRW, the Msr. Baccon stated (paraphrased) that there was only 53 loans, now, when pressed, it's all changed to "..As you can appreciate, the scale and complexities involved ...' in order to evade simple questions like:- the amount of debt, the amount of interest, and the involvement of the so called 'co-investors'.

I want to know simply (and it's got nothing to do with the so called 'asset review') how much do we owe the so called 'co-investors', how much is owed on the 'Pacific Beach' deal and how much interest is owing - none of these issues relate to the 'asset review'.

4. The fact that ex-employers of City are 'not employees of the Trilogy'. I guess he means that they are contracted - and therefore doesn't see that they would compromise any investigation.

Well, I think they do - do anyone else think that? Where is the objectivity?

5. Needs KPMG to assist with the RG45? Why? it's not an auditors job to fill out forms, it's an auditors job to 'audit' (or so it should be). Is Trilogy using KPMG to provide accounting services too? Come on guys, get real - any auditor could do the job - get rid of KPMG - let's get objective.

The letter does not answer my questions, and attempts to mislead me.

I am not pleased at all. I don't want to make an appointment for a meeting, I want proper answers to all of my questions.

How about other readers?

I'm going to resubmit the questions. Maybe second time lucky?

Re: Do Balmain take 'direct' fees from the FMF?

http://business.brisbanetimes.com.au/business/city-pacific-sellup-set-to-start-20090828-f1yy.html

"... City Pacific, until this year, siphoned $30 million in annual fees from the fund. It also used to reap an additional $20 million a year in loan origination fees from developers borrowing from the fund. ..."

Note: the $20m are 'direct fees'.

'Trilogy First Mortgage Income Trust' (TFMIT), Page 15, Table 2 headed 'fees and costs that payable by the borrower', outlines these 'direct' fees charges in the TFMIT.
http://www.trilogyfunds.com.au/site/assets/files/pdf/FMIT-PDS-Final-19Feb.pdf

For example:-
Loan Application - between .5% and 3%
Loan Administration fee - between .5 and 3%

Unit holder ownership (in $1 units) in the FMF is supposed to be valued at around $630m. Debt is probably about $150m (CBA + 'co-investors).

So, the total funds under management (FUM) = $780m (exact figure known only to Trilogy at this time).

Therefore the management fee (as promised by Trilogy) = $780 * 1.5% = $11.7m

Suppose a loan admin fee (a 'direct' fee) of 1.5% (about midway between .5% and 3% as Trilogy would charge in their TFMIF) was charged that would be another $11.7m paid to manager directly from the lenders.

Since the majority of the lenders are incapable of paying their loans out and their loans have been capitalised, then this extra $11.7m is effectively coming out of the FMF's pockets.

In the above case, the manager would make $23.4m per annum, which equates to 3.7% of the $630m owned by unit holders per annum.

I don't believe that Trilogy stated one way or other with respect to these direct fees. As the excerpt above points out, City took $20m per year in 'direct' fees, and it's perfectly legal for Trilogy to take them too.

However, I believe that many investors in the FMF don't understand that managers take fees inside and outside the FMF, and all of these fees end up coming out of the FMF's income.

That is why Trilogy should clarify the situation with the fees. It is a matter raised in a submission 182b to the senate inquiry. One management fee of 1.5% does not necessarily mean one fee charged by the manager.

So, if you think that 'direct' fees are not important, I suggest you think again.

Re: Do Balmain take 'direct' fees from the FMF?

In my last posting, I wrongly referred to submission 182b to the senate inquiry.

It is a matter raised in a submission 182a, (page 3 - heading 'the FMF has a new manager') to the senate inquiry. One management fee of 1.5% does not necessarily mean one fee charged by the manager.
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub182a.pdf

In its 'Notice of Meeting and Explanatory Memorandum', page 6, Balmain Trilogy stated (when citing the reasons for dissatisfaction with city), among other things:-

"... the excessive level of fees being charged by CP to the Fund which exceeded $66.5m in the last two financial years ($36.5m in FYE 2007 and $30m in FYE 2008), particularly in the context of the poor performance of the Fund ...". However, not a whisper directed to the 'direct' fees.

Further, the document stated "... the lack of meaningful information in relation to the Fund and its assets being provided to Members on a regular and timely basis ...". So, is Trilogy doing better than CPL? I don't think so.

Further, on page 8, under the heading "5. How will members benefit', Balmain Trilogy promises:-

"... 5.2. Information regarding the Fund will be made available to Members and the Fund will be administered and managed on a transparent basis. Full compliance with Trilogy’s statutory disclosure obligations will be enhanced by regular Member newsletters and the establishment of the Investor Committee. The Investor Committee represents a significant step forward in allowing Members to be fully informed as to the status of the Fund. The conclusions of all of the Investor Committee meetings will be made available to all Members. The results of the asset review will be published (with due regard to privacy issues of the borrowers) to ensure visibility. ..."

http://www.balmaintrilogy.com.au/pdf/BTI_NOM_ExpMemo.pdf

Well, 5.2 is struggling to come into being - Trilogy won't answer questions.

Same body (FMF), different head (Trilogy)?

"... But the only flow was the river of gold to the banks. ..." (Queensland MP Bernie Ripoll, chairman of the joint parliamentary inquiry into financial products and services referring to Storm)

http://www.news.com.au/couriermail/story/0,23739,26013817-3102,00.html

Guess where a lot of our 'river of gold' went? Just see the dark blue area increasing dramatically since September 2007. This area does not include (to the best of my knowledge) the costs of borrowing via the so-called 'co-lenders'.

(note also, that the green area representing the manager's fees DOES NOT INCLUDE 'DIRECT' FEES)

= all information in this graph is taken from FMF financial reports =

As bad as this graph looks, it was actually very much worse.

To those who don't think there is outrage about Bank's lending practices (in some circumstances)

Thanks to the storm thread for the info.

"... Watching on the sidelines are the financiers of the other group. It doesn’t take much to figure out that they won’t be able to recover their dodgy debts after the Federal Court case against the first group is over. So the finance companies are grabbing as much cash from innocent business operators as they can before the ACCC shuts the gate.

And Bank of Queensland’s equipment finance subsidiary is one of the players. Yes, that’e the same Bank of Queensland that denies all responsibility for the outrageous lending practices of failed Storm Financial. ..."

http://cspcentral.com.au/2009/09/bank-of-queensland-finances-telco-scam/

'Grabbing as much cash' before the 'gate is shut'?

You’d weep (with laughter, sometimes) if you hear the line the ultimate financiers are pushing.

"... “We aren’t guilty. We totally trusted the middleman. So how can we be guilty ? It’s the customer’s fault for being ripped off.”

The argument is that because they were careless about everything their broker representatives did, and because their broker representatives appointed dishonest companies to do the face-to-face selling, they (the financiers) are the innocent parties. PLEASE !!! ..."