Australian Banks And Financial Institutions Pledge To Offer Relief To Distressed Borrowers

Post by NeilMc on June 23, 2009 · Under Australian Economy, banking, home loans, mortgages · Comment

Mortgage lenders including retail banks, credit unions and building societies have pledged to help borrowers in financial distress as a result of the economic slowdown by signing up to a set of principles which aim to provide relief.

The Federal Treasurer Wayne Swan announced that every single bank, building society and credit union, numbering 144 in all have indicated that they will join the Big Four banks and follow a set of “principles” established by the government to aid borrowers in financial distress.

“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,” Mr. Swan said.

“While Australia is weathering the global recession better than most countries, we are not immune to its impacts, including an expected rise in unemployment.” He added.
The Federal government reached agreement with the Australia’s Big Four lenders to provide relief to distressed borrowers in April.

Every member of the Association of Building Societies and Credit Unions (ABACUS) and all retail banks who are members of the Australian Bankers Association (ABA) who engage in mortgage lending have signed up to the set of principles.

Signing up to abide by the set of principles means that mortgage lenders will now offer relief through a range of options to mortgage owners facing financial difficulties.
The options available to borrowers include mortgage payment holidays for up to a year, reductions in minimum monthly payments, fee waivers, and interest only breaks on loan repayments.

“Of course, these options won’t be appropriate in every case, and financial institutions will make assessments based on the borrower’s ability to meet new contractual obligations in the long-term,” Mr. Swan said.

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