Australia's Westpac sued for making loans consumers could not repay

Principal lawyer Ben Slade with Ms Slade in Brisbane

Principal lawyer Ben Slade with Ms Slade in Brisbane

The Tates claim Westpac granted them a $1.8million mortgage to finance five homes in 2008, 2013, and 2014, despite having only one source of income, The West Australian reported. She said her family would now lose all of their properties save for a block of land. "Everything we were trying to achieve is lost", Michelle Tate said.

Maurice Blackburn said it will conduct the class action on behalf of those who were entered into unsuitable loans since January 2011 as a result of this metric, and suffered harm as a result.

"Dealing with Westpac has devastated us". Instead of striving for financial independence, we are back living pay cheque to pay cheque, tax return to tax return.

At the time of its failed settlement with ASIC past year, Westpac accepted that it should not have used an automated process to approve 10,500 loans between December 2011 and March 2015, saying these should have gone to a credit officer for manual assessment. "It is worse than being back to square one".

Westpac admitted late previous year that it had breached responsible lending laws, with 105,000 loans which should have passed through a manual assessment automatically approved.

Michelle Tate is the lead plaintiff in the class action.

Maurice Blackburn principal lawyer Ben Slade said the firm expected thousands of loans nationwide could be affected.

They will also argue the bank breached its obligations on another front, by not properly assessing a customer's capacity to pay their loans once their interest-only period ended.

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The Tate family appeared on the ABC's 7.30 program a year ago.

Following the news of the banking royal commission, the family said they finally made a decision to look into their agreement with the bank and allegedly found that their monthly expenses had been vastly understated on their application.

They bought their first home in 2008 but chose to invest in a further three in 2013 and 2014 while Mrs Tate was a full-time mum, all funded through Westpac loans they locked in as interest only and secured against their first property.

"We are anticipating a lot of people are caught up in this and can participate in the claim", he told ABC News.

The ABC has approached Westpac for comment.

In a suit brought on by law firm Maurice Blackburn on Thursday, the bank is accused of violating its responsible lending obligations by failing to properly assess its clients' finances.

"This case will seek to prove that Westpac failed to comply with these obligations and that this failure caused substantial losses for many consumers", Slade said.

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