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Former mortgage brokers banned for $17m loan fraud

Former mortgage brokers banned for $17m loan fraud

The former directors of a mortgage broking firm have been permanently banned from engaging in any credit-related business after misleading a bank into providing more than $17 million in home loans.

Xiaoyi (Jeff) Zhao and Jun (Leo) Ma were the directors of Sydney Global Investment Pty Ltd, which traded in Sydney as X Finance Group. They also employed Liang (Victor) Zhang as a third mortgage broker and lending manager.

According to ASIC, the trio were “knowingly or recklessly” involved in providing false documents to Westpac as part of 21 separate home loan applications. These falsified documents including payslips and letters from employers.

These employers were Chinese-based businesses, and the borrowers were found to either not be employed by these firms at all, or if they were, received much lower rates of income than those stated on the pay slips provided.

Using these documents as part of its processing procedures, Westpac granted loans worth more than $17 million.

"Westpac identified concerns with X-Finance and raised these with ASIC," a spokesperson for the bank said.

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"We have supported ASIC’s investigations and welcome its action on this matter." 

The judgement from ASIC comes after the mortgage broking sector was scrutinised by the royal commission into misconduct in the financial services sector, which flagged possible changes to commission structures among a number of possible means to improve customer outcomes.

Former mortgage brokers banned for $17m loan fraud
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