See this news item:
http://www.abc.net.au/news/stories/2009 ... ion=justin
It will be a good fallback protection for existing home owners but will no doubt make banks more cautious about lending.
Dale.
Mortgage protection changes announced by Government
Page 1 of 1
good thing, the first take was for mortgages mid 300k range, well thats great for people living 10 years ago but house prices are just too high for that to be of any use to a lot of us
Here is another article on the topic:
http://www.theage.com.au/national/gover ... =text-only
Government moves to punish ******* lending
Date: April 28 2009
Peter Martin
MORTGAGE brokers, bank employees, payday lenders and retailers offering credit will face fines and even jail under new "responsible lending" rules set to become law in November.
The provisions, in draft legislation to be introduced in June by Corporations Minister Nick Sherry, will, for the first time, require all credit providers to be licensed and will make it an offence to supply unsuitable credit that cannot be repaid.
Maximum penalty will be five years' jail and fines of up to $220,000 for an individual and $1.1 million for a corporation.
The new laws will bring some state-regulated practices under Commonwealth control and will see the Australian Securities and Investments Commission gain 200 more staff to oversee credit providers.
"I can assure you that we will be extremely proactive in administering these laws and vigilant in their enforcement," ASIC chief Tony D'Aloisio said.
"We will have to register some 10,000 entities. Around 5.7 million households have some sort of debt. Around 2.9 million have a home loan; 750,000 have an investor loan and 2.3 million households have a credit loan."
Banks, credit unions and building societies attacked the new provisions as "heavy-handed", saying they would result in higher loan fees and a longer delays in approvals.
"While the Federal Government is suggesting this will improve consumer confidence, the real question for the Government is what will this do for the confidence of the main body of credit providers, which is much needed in the present economic circumstances," Tony Burke, the acting chief executive of the Bankers Association, said. "The penalty regime is disproportionate."
Abacus, which represents credit unions and building societies, welcomed the new laws for replacing ineffective state regulations but warned they risked "burying" responsible lenders in bureaucracy.
"Focus the legislation on the poor behaviour of ******* lenders and brokers — don't drive up the cost of borrowing with ineffective red tape," said Abacus chief executive Louise Petschler.
Senator Sherry was unapologetic, saying the Federal Government intended to crack down on irresponsible lending and "******* providers of credit finance and ******* advisers".
"For example, margin lending has been of significant contention over the past 18 months. There have been individuals who only had their own home as the asset to support the lending to buy shares, and/or had a very low income. It will be practically very, very difficult for individuals to enter into margin lending with these new laws."
As foreshadowed, Australians with mortgages of up to $500,000 will be able to apply to change their credit contract if they get into financial difficulty.
The Bankers Association said the provision was unnecessary as the banks' own hardship principles already went further and did not apply a threshold.
"It is important that customers understand that if they are experiencing any problems in repaying their loans, they should contact the bank as soon as possible," Mr Burke said.
Dale.
http://www.theage.com.au/national/gover ... =text-only
Government moves to punish ******* lending
Date: April 28 2009
Peter Martin
MORTGAGE brokers, bank employees, payday lenders and retailers offering credit will face fines and even jail under new "responsible lending" rules set to become law in November.
The provisions, in draft legislation to be introduced in June by Corporations Minister Nick Sherry, will, for the first time, require all credit providers to be licensed and will make it an offence to supply unsuitable credit that cannot be repaid.
Maximum penalty will be five years' jail and fines of up to $220,000 for an individual and $1.1 million for a corporation.
The new laws will bring some state-regulated practices under Commonwealth control and will see the Australian Securities and Investments Commission gain 200 more staff to oversee credit providers.
"I can assure you that we will be extremely proactive in administering these laws and vigilant in their enforcement," ASIC chief Tony D'Aloisio said.
"We will have to register some 10,000 entities. Around 5.7 million households have some sort of debt. Around 2.9 million have a home loan; 750,000 have an investor loan and 2.3 million households have a credit loan."
Banks, credit unions and building societies attacked the new provisions as "heavy-handed", saying they would result in higher loan fees and a longer delays in approvals.
"While the Federal Government is suggesting this will improve consumer confidence, the real question for the Government is what will this do for the confidence of the main body of credit providers, which is much needed in the present economic circumstances," Tony Burke, the acting chief executive of the Bankers Association, said. "The penalty regime is disproportionate."
Abacus, which represents credit unions and building societies, welcomed the new laws for replacing ineffective state regulations but warned they risked "burying" responsible lenders in bureaucracy.
"Focus the legislation on the poor behaviour of ******* lenders and brokers — don't drive up the cost of borrowing with ineffective red tape," said Abacus chief executive Louise Petschler.
Senator Sherry was unapologetic, saying the Federal Government intended to crack down on irresponsible lending and "******* providers of credit finance and ******* advisers".
"For example, margin lending has been of significant contention over the past 18 months. There have been individuals who only had their own home as the asset to support the lending to buy shares, and/or had a very low income. It will be practically very, very difficult for individuals to enter into margin lending with these new laws."
As foreshadowed, Australians with mortgages of up to $500,000 will be able to apply to change their credit contract if they get into financial difficulty.
The Bankers Association said the provision was unnecessary as the banks' own hardship principles already went further and did not apply a threshold.
"It is important that customers understand that if they are experiencing any problems in repaying their loans, they should contact the bank as soon as possible," Mr Burke said.
Dale.
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