If you have been following the emerging Australian subprime crisis, you will know one of the lenders, Firstmac lodged an appeal with the High Court on Friday.
The Supreme court had been extinguishing mortgages of individuals where they were given a loan that they could simply not afford. Like in the U.S., there is dodgy paper work and overstated incomes by brokers.
The High Court on Friday rejected the appeal by the lender, which leaves the doors open to other mortgage holders that have been given loans they can't afford.
In these cases, the courts are extinguishing the loans hence the banks are bearing the losses. Depending on how big this gets, there is some concern some of the lenders could colapse.
Denise Brailey, the Consumer Advocate who has been heading up these cases has said on her blog (http://www.bfcsa.com.au/index.php/easyblog/entry/no-bail-out-for-banks-bail-out-for-the-victims):
"Banks who find themselves mired in imprudent lending practices should not be rewarded as in Europe and the USA.
Have your say and start BLOGGING:
BFCSA believes that Banks who create their own mess should clean it up. If there is any Bail Out, it should be to assist the 100,000 victims of improper lending practices.
If you think you are a victim of these activities you need to sign up and become a member today."
