Big banks ‘unconcerned’ about mortgage defaults

The number of problem mortgages and loans could triple according to the financial regulators. The big banks continued to make low doc and risky loans in the face of rising defaults and mortgage stress during the last six months of last year according to documents obtained under freedom of information laws. In briefings to the Reserve Bank, the big five banks appeared to be unconcerned about rising defaults in western Sydney in particular. As smaller lenders retreated from the mortgage market, the big banks continued to try to build market share by issuing loans to risky customers says the documents from the RBA. As recently as February the banks said they were fairly relaxed about rising arrears caused first by rising interest rates and then by fallout from the global credit crisis.

Source: The Australian