Lending market together in principle
(26 June 2009 – Australia) The Big Four Australian banks have been joined, in backing the Federal Government’s principles on distressed mortgage borrowers, by all other lenders, including building societies and credit unions.
Treasurer, Wayne Swan, announced that all 144 retail banks, building societies and credit unions have signed up to the Government's Principles to assist borrowers who are experiencing financial difficulty as a result of the global recession.
These Principles will ensure that families finding it tough to paying off their mortgage in the face of the global recession are fairly treated by their bank, building society or credit union, Swan said.
The announcement follows on from an agreement by the big four Australian banks to sign up to these principles in April.
All members of the Association of Building Societies and Credit Unions (ABACUS) and all retail members of the Australian Bankers' Association (ABA) with a focus in the mortgage market are now signatories to the Principles.
The Principles provide support and assistance for borrowers struggling to meet their mortgage repayments due to temporary unemployment or other factors related to the global recession.
The treasurer highlighted key options for borrowers in distress; postponement for up to 12 months the dates on which payments are due under a mortgage contract (with interest to be capitalised into the loan); an extension of the period of the contract and a reduction in the amount of each payment due under the contract; interest-only breaks on loan repayments; and fee waivers.
Swan indicated, however, that if borrowers feel that lenders are not living up to the principles, borrowers should do something about it; talk to their bank in the first instance and secondly refer to the financial or credit ombudsman services.
These Principles will ensure that families finding it tough to paying off their mortgage in the face of the global recession are fairly treated by their bank, building society or credit union, Swan said.
The announcement follows on from an agreement by the big four Australian banks to sign up to these principles in April.
All members of the Association of Building Societies and Credit Unions (ABACUS) and all retail members of the Australian Bankers' Association (ABA) with a focus in the mortgage market are now signatories to the Principles.
The Principles provide support and assistance for borrowers struggling to meet their mortgage repayments due to temporary unemployment or other factors related to the global recession.
The treasurer highlighted key options for borrowers in distress; postponement for up to 12 months the dates on which payments are due under a mortgage contract (with interest to be capitalised into the loan); an extension of the period of the contract and a reduction in the amount of each payment due under the contract; interest-only breaks on loan repayments; and fee waivers.
Swan indicated, however, that if borrowers feel that lenders are not living up to the principles, borrowers should do something about it; talk to their bank in the first instance and secondly refer to the financial or credit ombudsman services.
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