Actually Kingy, it wasn't a ponzi scheme. The investment vehicle was an ASX Index Fund and profits were real for a few years. But as we know leverage is both "safe" and necessary with such an investment style. It is safe because the indexes never go down for long and necessary because the margins are small. Self sufficient investors would not be sucked in but you don't need to be GREEDY to up the anti after a few good years.
But banks DON'T cancel loans if they can possibly avoid it and when they do they cover themselves by non-disclosure clauses. That they did so in these cases I know of [how many other undisclosed instances?] absolutely proves that the rumours of people signing blank documents with a nod and a wink or indeed having never signed a damn thing were true.
Another younger lady lost her house: Her estranged husband, who jointly owned their house, mortgaged it without her knowledge. Illegal, but the bank could not claim to be an innocent victim. They would know both sigs SHOULD have been there.
Certain bank officers in Townsville were writing more business than those dealing with larger sums in the cap cities. It was frantic and there were serious deviations from good banking practice. The banks, of course, manage to keep the wraps on their short-comings settling out of court or by stalling the class actions.
As you say, no one is completely innocent but the banks thoroughly deserve what is coming, and more.
