Social collapse in modern America

Whatever the levels of human suffering during the Great Depression there was also hope.

More Foreclosures and Suicides than During the Great Depression

Zero Hedge,

17 May, 2013

The San Francisco Chronicle notes that it is difficult to keep track of foreclosure rates now … let alone during the Great Depression:

Foreclosure rates of the late 2000s are often compared with those of the Great Depression, which took place through the first half of the 1930s. However, there were no public or private agencies keeping track of foreclosure rates at that time. Indeed, the government still does not keep an official statistic on the number of homes in foreclosure or repossessed by banks and lenders.

But the Chronicle provides estimates of foreclosures during the 1930s:

A 2008 article by David C. Wheelock, an economist at the Federal Reserve Bank of St. Louis, cited annual reports issued by the Federal Home Loan Bank Board during the 1930s. These reports reveal that the foreclosure rate exceeded 1 percent from 1931 until 1935. At the worst point in the Depression-era economic crisis, in 1933, about 1,000 home loans were being placed in foreclosure by banks every day.

How does that compare to the last 5 years?

RealtyTrac notes (via North Carolina State University) that:

From January 2007 to December 2011 there were more than four million completed foreclosures and more than 8.2 million foreclosure starts ….

CoreLogic reported a year ago:

Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the national foreclosure inventory as of May 2012 compared to 1.5 million, or 3.5 percent, in May 2011 and 1.4 million, or 3.4 percent, in April 2012. The foreclosure inventory is the share of all mortgaged homes in some stage of the foreclosure process.

Given that there are currently around 316 million Americans – more than twice the number during the Great Depression – such high foreclosure rates mean that there may well be as many people suffering foreclosure than during the Great Depression … or more.

And NBC News reported this month:

Already some 5 million homes have been lost to foreclosure; estimates of future foreclosures range widely. [Moody's Analytics chief economist Mark Zandi], who has followed the mortgage mess since the housing market began to crack in 2006, figures foreclosures will strike another three million homes in the next three or four years.

For more comparisons of the Great Depression and today, see:

Housing Prices Have Already Fallen More than During the Great Depression … How Much Lower Will They Go?

Have the Last 5 Years Been Worse than the Great Depression?

British Economy Is WORSE than During the Great Depression 

More Americans Committing Suicide than During the Great Depression

Suicide rates are tied to the economy.

The Boston Globe reported in 2011:

A new report issued today by the Centers for Disease Control and Prevention finds that the overall suicide rate rises and falls with the state of the economy — dating all the way back to the Great Depression.

The report, published in the American Journal of Public Health, found that suicide rates increased in times of economic crisis: the Great Depression (1929-1933), the end of the New Deal (1937-1938), the Oil Crisis (1973-1975), and the Double-Dip Recession (1980-1982). Those rates tended to fall during strong economic times — with fast growth and low unemployment — like right after World War II and during the 1990s.

During the depths of the Great Depression, suicide rates in America significantly increased. As the Globe notes:

The largest increase in the US suicide rate occurred during the Great Depression surging from 18 in 100,000 up to 22 in 100,000 …

We’ve previously pointed out that suicide rates have skyrocketed recently:

The number of deaths by suicide has also surpassed car crashes, and many connect the increase in suicides to the downturn in the economy. Around 35,000 Americans kill themselves each year (and more American soldiers die by suicide than combat; the number of veterans committing suicide is astronomical and under-reported). So you’re 2,059 times more likely to kill yourself than die at the hand of a terrorist.

NBC News reported in March.

Suicide rates are up alarmingly among middle-aged Americans, according to the latest federal government statistics.

They show a 28 percent rise in suicide rates for people aged 35 to 64 between 1999 and 2010.

RT reports:

In a letter to The Lancet medical journal, scientists from Britain, Hong Kong and United States said an analysis of data from Centers for Disease Control and Prevention indicated that while suicide rates increased slowly between 1999 and 2007, the rate of increase more than quadrupled from 2008 to 2010, Reuters reported.

Earlier this month, NY Daily News wrote:

The Great Recession may have been at the root of a great depression that caused suicides to soar among middle-aged Americans, a government report speculates.

The annual suicide rate for adults ages 35 to 64 spiked in the past decade, according to a study from the U.S. Centers for Disease

Control and Prevention.

And a shaky economy that nose-dived into the worst financial crisis since the Depression may be the biggest reason why.

***

The CDC’s Morbidity and Mortality Weekly Report said the annual suicide rate jumped 28.4% from 1999-2010.

It was the biggest increase of any age group, said the CDC, citing “the recent economic downturn” as one of the “possible contributing factors” for the increase.

“Historically, suicide rates tend to correlate with business cycles, with higher rates observed during times of economic hardship,” the report said.

David Stuckler (a senior research leader in sociology at Oxford), and Sanjay Basu (an assistant professor of medicine and an epidemiologist in the Prevention Research Center at Stanford), write in the New York Times:

The correlation between unemployment and suicide has been observed since the 19th century.

(And see these articles by the Wall Street Journal and the Los Angeles Times.   This is obviously true world-wide.  For example, last year the New York Times reported:

The economic downturn that has shaken Europe for the last three years has also swept away the foundations of once-sturdy lives, leading to an alarming spike in suicide rates. Especially in the most fragile nations like Greece, Ireland and Italy, small-business owners and entrepreneurs are increasingly taking their own lives in a phenomenon some European newspapers have started calling “suicide by economic crisis.”

***

In Greece, the suicide rate among men increased more than 24 percent from 2007 to 2009, government statistics show. In Ireland during the same period, suicides among men rose more than 16 percent. In Italy, suicides motivated by economic difficulties have increased 52 percent, to 187 in 2010 — the most recent year for which statistics were available — from 123 in 2005.)

Indeed, more Americans are killing themselves today than during the Great Depression. Specifically, there were were 123 million Americans in 1930.  The maximum suicide rate during the depths of the Great Depression was 22 out of 100,000  Americans.  That means that up to  27,060 Americans killed themselves each year.

In contrast, the U.S. Centers for Disease Control reports that 38,364 Americans committed suicide in 2010. In other words, 2010 suicides were approximately 142% of suicides during the depths of the Great Depression. (The suicide rate is lower today than during the Great Depression, but – given that there are more Americans – there are more suicides each year.)

The head of my local county’s mental health services confirmed to me today that there are now more suicides now than during the Great Depression.

The Root Causes: Unemployment and Foreclosure

Why do more people kill themselves during severe downturns?  It’s not just a downturn in the business cycle in some general sense.  It’s more specific than that.

Unemployment and foreclosure are the largest triggers in increased suicide risk.

David Stuckler and Sanjay Basu write:

People looking for work are about twice as likely to end their lives as those who have jobs.

***

Unemployment is a leading cause of depression, anxiety, alcoholism and suicidal thinking.

ABC News points out:

“Joblessness is a risk factor for suicide,” said Nadine Kaslow, professor of psychology in the Department of Psychiatry and Behavioral Sciences at Emory University in Atlanta. “The stress is just overwhelming. … People are freaked out.”

Bloomberg reports:

“The suicide rate started accelerating in 2008, 2009 and 2010 — someone might still be working, but their house is underwater, or they’re working but they’re working part-time,” Eric Caine, the director of the CDC’s Injury Control Research Center for Suicide Prevention, said by telephone. “These things ripple into families. There’s an economic stress.”

NY Daily News writes:

“Most people who commit suicide tend to suffer from major depression, and this vulnerability tends to be brought forth by very stressful situations like losing one’s home or job,” [Dr. Dan Iosifescu, director of mood and anxiety disorders program at Mount Sinai Hospita] said.

NBC News reports:

The American Association for Suicidology says economic recessions don’t normally affect suicide rates.

“Although US suicide rates did increase slightly during the years of the Great Depression, reaching a peak rate of 17.4/100,000 in 1933, subsequent US recessions have not been found to lead to increased national rates of suicide in the period of or immediately following each recession,” the group says.

The latest numbers suggest suicide rates for middle-aged Americans now surpass the peak during the Depression. And there’s another possible explanation.

“There is a clear and direct relationship between rates of unemployment and suicide,” the suicidology group says in its statement.

“The peak rate of suicide in 1933 occurred one year after the total US unemployment rate reached 25 percent of the labor force. Similar findings have been documented internationally. At the individual level, unemployed individuals have between two and four times the suicide rate of those employed.”

The group also raises concern about the home foreclosure rate.

Indeed, it is likely that more people have lost their jobs during this “Great Recession” than during the Great Depression … especially when you look at the masses of people who have given up altogether and dropped out of the work force.

And it is possible that more people have lost their homes through foreclosure than during the Great Depression as well.

No wonder there are so many suicides …

Postscript:  If you suffer from depression, this may help.

Military raid in rural Colorado

Bankster Storm Troopers Raid Peaceful Anti-Foreclosure Protest In Rural Colorado: "Welcome to New America..."

Max Mogren, Oil Free Fun

Oil Free Fun,

1 November, 2012

Clearly the well-outfitted, combat ready, assault rifle wielding Sheriff's Department of Creek Country, Colorado does not understand the crimes against humanity committed by the corrupt banking/financial system which crashed the US economy in 2008 and led to the unprecedented number of -- often fraudulent -- foreclosures that have taken place in the four years since. The privately owned Central Banking Cartel (aka, The Federal Reserve, established dubiously in 1913) that has intentionally devalued our currency by 95% over the last century is still very much in power and is using unwitting law enforcement agencies as their strong arm to commit additional crimes against humanity.

If law enforcement agencies had any comprehension of what banks really are, how money is used as a covert weapon to control all of us, and how unelected Central Banksters dictate the agenda of political and economic life here in America, the police and military would turn their weapons towards the real criminals -- the economic terrorists responsible for so much unnecessary suffering -- instead of targeting and intimidating activists trying to raise awareness of the real problems we all face.

Unfortunately, the only sectors of the economy that have grown recently -- due solely to deficit spending increasing the national debt by ~1trillion dollars annually -- relate to providing "Homeland Security", eliminating "Domestic Terrorism", and furthering the "Police State". The budgets of increasingly-militarized law enforcement agencies are booming: very few cops are getting foreclosed on at a time when salaries are growing and new flashy toys -- like assault rifles and tactical gear -- are getting kicked down to them by the power brokers that really call the shots.

A prime example of the rise of fascism (the merger of state/corporate/bankster power) in America went down in rural Colorado around Halloween. Police dressed for war raided a home where activists were attempting to delay a foreclosure by one month so the previous owner -- who'd payed the mortgage on the home for 24 years -- could find a new place to live at the onset of a cold Colorado winter.

The homeowner facing eviction, Sahara Donahue, was apparently underwater on her mortgage with US Bank. She says she told the bank that all she was asking was for another 30 days in the home before an eviction. She needed an extra month in order to find another place to live with her two dogs, she said.

But US Bank and the Creek County Sheriff's Department had other plans, culminating a show of excessive force that alarmed activists who had descended on the property to attempt to prevent the eviction.

Apparently the Banksters still want more empty homes and more

homeless Americans. The "Free Market " is rigged. Wake up!

Bear in mind that there are currently 24 empty "bank-owned" houses in America for each officially homeless person. If politicians and economic "leaders" were really intent on solving our economic and social problems, a system could easily be set up to house the homeless, minimize foreclosures, and do away with the so-called "backstock" of houses that need to be sold before the housing market will recover.

Occupy Denver protesters issued the following statement when they began assisting Sahara in protecting her home around October 26th.

"Occupy Denver members are staging an immediate action at the home of long time Idaho Springs resident Sahara Donahue. Sahara, who has volunteered with the Clear Creek County Open Space Commission for 12 years, is facing eviction by U.S. Bank after a long legal battle that, like so many cases of foreclosure in Colorado, involve fraudulent actions on the part of the bank. 

 

Since 2006, the laws have been such that banks do not have to prove they own the home of persons they foreclose on, and this change is responsible for Sahara's having the law work against her as it has for so many others in our state. She has fought them in court, but is now facing eviction and has requested that Occupy Denver stand with her at her home in hope of persuading the police to do the right thing and allow her some more time to continue her legal efforts. She has asked the bank for 30 days during which time she can find another living situation, but the bank has denied her requests. Members of Occupy Denver are answering her call for help and are occupying her home with her as of Wednesday night. "

A YouTube video the occupiers released on October 26th shows a lighthearted and peaceful group building a small barricade in front of Sahara's driveway and emphasizing that this was a peaceful protest attempting to raise awareness of the crooked banking practices that crashed the economy in 2008 and has resulted in unprecedented foreclosures (by design) in the time since.

Here is video from the raid itself. May God help us all. Peace

Spain

Homeless Families in Spain Squatting After Eviction

Protest groups in Spain have helped families that were kicked out of their homes by banks find shelter in repossessed, empty apartment buildings. Police moved in quickly in most cases, but in Seville about 30 families are going on six months of illegal occupation.

VOA,

11 October, 2012

Fifty-four-year old Mercedes Lladanosa showed us around the two-bedroom apartment she shares with her daughter and granddaughter. It has hardwood floors and a fancy faucet in the bathroom. But bare light bulbs hang uselessly from the ceiling.

The electricity was shut off months ago.

And the washing machine is only for show, as the city cut off the building’s access to running water last week.

They cook with a gas camping stove. What little furniture Lladanosa has was donated or found in the trash. It is not much - a couch, a bed and a crib.

Squatting for survival

She and more than 100 others have been living like this since May, in this five-story building that was completed three years ago and left empty when the developer went bankrupt.

Nearly 40 families moved in with help of members from the 15M activist group, like Antonio Moreno Rosana.

“Right now in Spain we have something like 517 evictions a day. The thing is, just in Andalucía I think, there are 116,000 empty houses. It is outrageous that you have got empty houses when people are getting thrown out into the street,” said Rosana.

Rampant evictions

Hundreds of thousands of Spaniards have been evicted from their homes since the housing bubble burst in 2008.

Once a house is repossessed by the banks, the owner is still liable for the mortgage, meaning several generations are being saddled with debt.

Rosana said it makes no sense.

"We think that, you know, if a bank has an empty house for a year or two years, that should be expropriated immediately. It is like you have it empty? No, you can not have it empty. We are going to put some people in there, if you are going to have it empty," said Rosana.

15M group protests

The 15M movement has tried a few times in Madrid, Barcelona and the Catalonian city of Sabadell to house evicted families in buildings now belonging to banks, but efforts were swiftly defeated by police. Lladanosa and her fellow squatters risk being thrown out any day.

Not everyone lives in the building out of absolute necessity, and for some, making a statement is worth the risk.

Social worker Montserrat Sanchez lost her job in an immigrant center two months ago and could not pay her rent anymore, so she went back to live with her mother and father, but then left.

“I think I have the right, like everyone living in this world, to have my own house and my own place where to stay. And I do not think it is right to go back with my parents. So that is why I came here,” said Sanchez.

Lladanosa and others show us the water fountain installed outside the building this week by the city, on the corner of an intersection, next to garbage bins. She hauls water from there up to her apartment to wash herself and to clean her clothes.

The unemployed cook turned housekeeper said she wants to regain her dignity. She wants a roof over her head. Not for free. She wants to catch a break, though, and pay rent that she can afford.

NZ foreclosures

Record mortgagee sales a 'genuine cause for concern'

A record number of property owners are being forced to sell up as banks move to foreclose in mortgagee sales.

TVNZ,

9 June, 2012

New figures published today by Terralink International show there were 524 mortgagee sales in the first three months of this year - the highest first quarter number on record and almost six a day.

Terralink managing director Mike Donald said the figures were "genuine cause for concern" and worse than during the same period in 2010, at the height of the recession.

They indicated the economy was still struggling to pick up and he expected more cash-strapped homeowners to lose their properties in forced sales.

"How many other properties are close to being forced into this situation? We can't answer that question.

"The concern is that while we think we may be through the effects of the recession, it's still proving to be pretty tough out there."

The figures indicated the economic recovery may be a long way off, with banks trying to "drip feed" forced sales to avoid flooding the market with cheap properties and depressing prices.

"In fact, things have never been worse for property owners. I challenge anyone to look at these figures and tell me things are getting better," Donald said.

With 41 foreclosures, Wellington recorded a 71% jump compared with the first quarter of 2011. The number of mortgagee sales in Northland jumped 155% (from 20 to 51) and 153%in Otago (from 15 to 38).

However, some regions, notably Hawke's Bay and Canterbury, experienced a modest decrease during the quarter.

Donald said the one silver lining was that the number of "mum and dad" home owners facing mortgagee sales appeared to be easing.

Banks seemed to be targeting property investors who owned multiple properties.

"The figures indicate this group is under significant pressure, a reflection, perhaps, of reduced equity as property values flatten or decline, and increased pressure on cash flows."

However, BNZ chief economist Tony Alexander said the mortgagee sales figures held little correlation with the buoyant property market.

With a shortage of available housing stock, sales were strong and consents for new dwellings were also up, he said. Interest rates were also at record lows.

"Anyone who has paid attention to Terralink data over last four years has been grossly misled."

But Alexander agreed the forced sale of someone's home was traumatic and the record high figures were of concern. Foreclosures represented the most severe cases where property owners could not service their mortgages.

Mortgagee sales go through roof in Northland

Northland could be heading for a record year of mortgagee sales after a 155 per cent rise in forced sales in the region during the first quarter of 2012.

Northern Advocate,

9 June, 2012

Figures released by Terralink today show that nationally there were 524 mortgagee sales from January to March, with almost 10 per cent, 51, in Northland, the fourth-highest total in the country behind Auckland, Waikato and Bay of Plenty.

The Northland sales were 155 per cent up on the corresponding period last year and Terralink managing director Mike Donald said this year was shaping up to be the toughest for embattled property owners.

He said the quarter's figures were a record number of mortgagee sales for the period. The 524 mortgagee sales were 100 more than during the corresponding period last year, and more than the previous record of 519 in 2010 when New Zealand was at the height of economic recession.

He said Northland's percentage rise in mortgagee sales was the highest in the country. In 2008 there were 54 mortgagee sales for the whole year and a record high of 200.

"There have been quite a significant number of mortgagee sales in Northland, particularly in Whangarei and the Far North. In March there were 15 mortgagee sales in Whangarei alone," Mr Donald said.

He said there had been a big rise in the number of mortgagee sales for individuals considered to be property investors, who owned several properties. "That's those people who own five or more properties. The figures indicate this group is under significant pressure, a reflection, perhaps of reduced equity as property values flatten or decline, and increased pressure on cash flows," Mr Donald said. The numbers were a genuine cause for concern, and confirmed a trend that began late last year. "Numbers began to trend upward during the second half of last year, back to recession level highs. These new figures indicate we may be a long way off economic recovery. In fact, things have never been worse for property owners."

The figures also showed a marked upturn in the "big five" banks forcing mortgagee sales. In 2009 the proportion of sales involving tier-one lenders was 36 per cent. In the first quarter of this year, that had risen to 55 per cent. He said Terralink's figures flew in the face of claims the number of mortgagee sales was declining.

"Our data is based on legal registration of actual foreclosures, not on listing data where the term 'mortgagee sale' is often simply a marketing term. I challenge anyone to look at these figures and tell me things are getting better for Kiwi property owners," Mr Donald said.

Otago recorded a rise of 153 per cent of mortgagee sales, from 15 to 38. Wellington property owners also felt the pinch with 41 mortgagee sales, up 71 per cent from the corresponding period in 2011. Some regions, notably Hawke's Bay and Canterbury, experienced a modest decrease in mortgagee sales.

Mr Donald said while the overall picture remained bleak, the number of "mum and dad" property owners facing mortgagee sales appeared to be easing. "If there's a silver lining anywhere in the figures, it's the drop in the proportion of individuals with a single property facing mortgagee sales, from 26 per cent in the first quarter of 2011 to 21 per cent this year."

Australia: Homeowners fight against the banks

At least someone is doing some journalism somewhere – more than I can say about the NZ media

Hope for mortgage 'victims' with homeowners winning battle against banks

THOUSANDS of struggling homeowners could walk away from their mortgages as a series of court cases helps to expose widespread improper lending practices involving some of the nation's biggest financial institutions.

The Australian,

4 June, 2012

Finance industry giants are spending millions of dollars on legal fees fighting homeowners who have successfully exited their mortgages because they were stung by sub-prime-style lending practices during the last property boom. An investigation by The Australian has revealed several mortgage providers and mortgage brokers engaged in improper lending practices in the years before the global financial crisis hit in 2008, including inflating borrowers' income and ability to repay debts to secure so-called "low-doc" loans.

Courts in several states have sided with homeowners who have defaulted on their loans, extinguishing their mortgages. The rulings have encouraged other lenders to reach settlements with borrowers that are saving homeowners hundreds of thousands of dollars. And the issue could be tested in the High Court in coming months.

Award-winning consumer advocate Denise Brailey, who runs the Banking and Finance Consumers Support Association, said she was dealing with more than 100 alleged victims of improper lending. "What this means is that if you are a struggling homeowner and the bank comes knocking you may well not have to hand over your keys," Ms Brailey said.

The declining health of loans could have ramifications for the federal government, which has put about $14 billion into securitised mortgage investments - packages of home loans known as "residential mortgage backed securities" - since the GFC.

In October 2008, Wayne Swan announced the government would invest $4bn to shore up the RMBS market, but that figure has ballooned and in April last year he increased the obligation to $20bn.

Australian Office of Financial Management chief executive Rob Nicholl said the government had invested in superior-quality loans with relatively low defaults rates and that it was "very cognisant of all the risks involved".

However, default rates among some mortgage securities, which include low-doc loans, have surged to as much as 7 per cent of loans.

According to Fitch Ratings, low-doc loans comprise about 8-10 per cent of every mortgage in the Australian securitised mortgage market.

Fitch analyst James Zanesi said that proportion of low-doc loans was similar in the wider, $1.2 trillion Australian mortgage market.

According to Fitch, low-doc loans were more than four times as likely to be in default than standard loans, with 5.5 per cent of all "prime" low-doc loans in default compared with 1.26 per cent of all standard loans.

The group said low-doc loans were experiencing "considerable deterioration" and there was "no relief in sight" for low-doc loan delinquencies.

The Australian has amassed evidence of widespread improper lending activity based around abuse of low-documentation lending products.

In the race to provide credit - and earn commissions - major lenders such as Macquarie, Suncorp and GE Money spruiked imprudent lending practices to mortgage brokers, highlighting loopholes in their own lending requirements.

Low-doc or "no-doc" loans were supposed to be only for self-employed business owners who could not provide standard loan information. Borrowers typically pay a higher interest rate to reflect their lack of a regular credit and income history.

But in scores of emails those lenders - and many others - told mortgage brokers that borrowers needed only to register an Australian Business Number "for one day" to secure low-doc or no-doc loans.

One email from a Macquarie Bank business development manager to brokers says: "Why not try Macquarie for the below reasons . . . No docs - Client only needs to be self-employed for 1 day or more . . . No assets and liabilities required, no income needs to be stated!!!"

Macquarie Bank and GE Money declined to comment. Suncorp spokesman Jamin Smith defended similar emails sent by Suncorp staff, saying business development managers did not have the power to authorise loans.

The Australian has also discovered cases of mortgage brokers, loan originators and others inflating borrowers' stated incomes on loan application forms without their knowledge.

Precedent-setting court cases have recently found that, where borrowers were given loans they could never afford, lenders must extinguish part or all of those mortgages. Nine judges before six courts have to date found in favour of homeowners affected by improper loan applications, and in almost all cases courts have ordered lenders to fully extinguish mortgages within 30 days.

The most clear-cut cases have occurred in NSW because of the 1980 Contracts Review Act in that state. However, courts in Victoria and Western Australia have found in favour of borrowers under existing legislation. Major mortgage securitiser First Mac - which has issued $9.5bn in Australian mortgages since 2003 - lost a NSW Supreme Court bid to repossess the family homes of three borrowers on the grounds those borrowers were victims of loan application schemes.

The judges found lenders had acted inappropriately by engaging in "asset lending" - that is, lending money based solely on the fact that the loan is secured by an asset, usually a person's home, and paying little or no regard as to whether the borrower could afford the loan.

First Mac appealed against the decision and in December the judges again sided with borrowers, ordering that mortgages against two family homes be rescinded completely, and reduced by three-quarters in a third case. First Mac was ordered to pay court costs.

In light of those judgments, lenders such as Westpac are scrambling to settle with borrowers who claim to have been wronged. In many cases, hundreds of thousands of dollars are being wiped from mortgages.

In every court case heard, lenders had failed to make simple checks, such as calling prospective borrowers to verify their stated incomes or employment status.

First Mac, based in Brisbane, has now sought to take its case to the High Court, and a hearing as to whether the case will be heard will take place later this month.

A High Court spokesman said between 8 per cent and 10 per cent of applications for such "special leave to appeal" applications were granted.

First Mac founder and managing director Kim Cannon did not respond to calls last week.

In most instances, the precedent-setting cases against the deep-pocketed financial institutions are being funded by consumer groups or lawyers working for little or no pay because the borrower victims are often close to bankruptcy. Lawyers said the vast majority of the thousands of homeowners affected by improper or unconscionable lending activities had no idea they could legally walk away from their mortgages.

"Lenders have been throwing everything they have at these cases because they know there are thousands, probably tens of thousands, of people who have been affected," said Geoff Roberson of Champion Legal, who has run the cases against First Mac. "The problem for many borrowers is they don't know they have been wronged and simply roll over when the banks come knocking."

Consumer advocates said borrowers who believed they had been affected should approach their lender for a copy of their loan application form, which they were entitled to by law, and check the income levels stated.

Ms Brailey said not being provided with a copy of the loan application form was a key indicator borrowers may have been subject to loan application irregularities.

"In every single case of the 100-plus I am dealing with, the person has not been provided with a copy of their loan application form by their mortgage broker or lender," she said.

She said borrowers were entitled to such information by law. However, banks and other lenders had "stonewalled" such requests.

"Every time the borrowers receive the forms they are blown away," Ms Brailey said. "Incomes have been grossly exaggerated, false employment job descriptions have been entered or they have been stated as being employed when they're not.

"In one case, a lowly-paid deckhand was described as a ship's captain and described as earning $150,000 a year."

Ms Brailey, who has been tracking low-doc loans and loan application issues with The Australian for several years, said she had uncovered examples of loan application irregularities in loans approved by 14 banks and other lenders.

She obtained emails illustrating imprudent lending practices by 36 banks and non-bank lenders, including all of the major banks.

"We're about to see a major train wreck," she said.