Rate cuts come too late for the repossessed

Almost 1,300 families in NSW had their properties repossessed in the first nine months of the year – before big interest rate cuts came into effect. 3,194 writs of possession were issued in the nine months to the end of September in NSW, of which around 40 per cent were executed. Since September repayments on a $250,000 mortgage have fallen about $500 a month. Senior solicitor Katherine Lane from Consumer Credit Legal Centre said “When house prices are falling banks look to repossess much more quickly to get their money back and without legal protection borrowers don't stand a chance. The Federal Government needs to act to give better protection to homeowners said Lane. “At the moment a bank does not even have to respond to a borrower who pleads hardship and wants to restructure their repayments,” she said. “We want a dispute resolution scheme which can rule on whether a bank is acting reasonably – at the moment they can do as they wish.” Rates should have been raised early in 2008 to 7.25 per cent said AMP chief economist Shane Oliver.

Source: The Daily Telegraph