National Australia Bank has sacked 20 bankers and taken action against 32 others - including slashing pay - after a review uncovered inaccurate and incomplete documentation for 2300 home loans.
The bank has also revealed it called in police as its investigation of the matter unfolded.
"With some individuals, we have been referring them to the police," NAB chief customer officer for consumer banking Andrew Haggar told the Herald Sun.
Many of the loans are believed have been given to overseas investors buying property in the red-hot Victorian and New South Wales housing markets.
Mr Haggar said it was not the tip of the iceberg and the bank had been working to uncover the problem areas.
"We've conducted a very thorough review as you can imagine - that has occurred over the last
more than 12 months."
The bank says it will contact everyone who holds the problem loans to get more information and could fork out remediation payments to customers who were financially inconvenienced.
Mr Haggar would not say how much the loans were worth or how much compensation might be paid.
The bank said it had completed an "extensive review" that identified the problem loans, made between 2013 and 2015.
Those loans "may have been submitted without accurate customer information or documentation, or correct information", it said.
They were issued under NAB's so-called Introducer Program, where the bank pays commissions to businesses such as financial planning and real estate agencies that refer customers who then take out a mortgage.
NAB said it uncovered the problems in October 2015 and told the Australian Securities and Investments Commission the following month.
"Since then, NAB has provided regular updates to ASIC on the progress of its investigation," Mr Haggar said.
Mr Haggar was brought into the chief customer role in August last year to clean up the mess, it is believed.
Twenty bankers in New South Wales and Victoria had their employment terminated or had left NAB, he said.
Another 32 bankers had suffered consequences, including pay cuts, Mr Haggar said.
"What occurred was unacceptable," he said.
"We have investigated this matter thoroughly, and, as we have always said, whenever we find issues we will investigate them, fix them, and hold people to account - and we did."
NAB has started writing to the customers, many of whom live overseas.
It is asking them to participate in a detailed review of their loans, which may include verification of documents submitted at the time of their applications.
Mr Haggar said affected customers would be offered compensation as appropriate.
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