As mortgage deferrals rocket in the wake of the latest pandemic lockdowns in NSW and Victoria, it might be time to look at the quality of the loans the big banks have been signing up in what has been boom conditions for them.

The latest UBS evidence lab on Australian mortgages reports that factually inaccurate mortgage applications have hit a record high.

The 2021 vintage of the brokers harvest of data from around 900 new mortgage holders suggests a material deterioration in lending standards. The share of misstated applications rose to a record 41 per cent, far above 2015s 27 per cent.

According to UBS, with house prices booming at the highest levels since 1989, we think borrowers are chasing the market and stretching towards their capacity limit, to be able to qualify for home loans.

Meanwhile, the Australian Banking Association reported that home loan deferrals grew to more than 27,000 in August, up from about 14,500 in July.

Question: Discuss the duty-to-clients ethics in this story.