`Shonky methods' used to sell loans: [1 All-round Country Edition]
Geoffrey Newman, John Stapleton. The Australian [Canberra, A.C.T] 11 Sep 2006: 6.
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Abstract
NSW Premier Morris Iemma also blamed the federal Government. "This is a human tragedy," he said. "These are the terrible consequences of John Howard's interest rate policies. We will continue to put the case to Canberra to ease off on their interest rate policy."
NSW Opposition Leader Peter Debnam claimed that the state's high taxes, soaring living costs and a lack of economic growth were causing the surge in home repossessions across NSW.
"Interest rates are going up right around Australia, but it's in NSW that families are feeling the worst and that's because of the high cost, high tax, high regulation regime here and the fact that NSW has the highest mortgage cost, because the Government squeezedthe land supply, drove up prices, that made it a real nightmare for young families in NSW," Mr Debnam said.
HOME loan marketers are posing as representatives of the peak mortgage industry body as first-home buyers retreat in the face of higher interest rates and competition among lenders intensifies.
Mortgage Industry Association of Australia chief executive Phil Naylor said the organisation had received complaints from people angered by sales calls from overseas that purported to be from the MIAA. The callers attempted to convince home owners to refinance their loans.
He said the perpetrators were finding business tough after three consecutive interest rate rises since the October 2004 federal election and were using "shonky methods" to get their message across. "We do not make any calls of this nature and are doing what we can to find out who is responsible," he said.
The weekend auction clearance rates were bad enough to send a serious shiver through the real estate industry, with first-home buyers backing away.
The value of homes being sold in Sydney plummeted 21 per cent and the number of homes sold dropped 25 per cent, according toAustralian Property Monitors. Adelaide had a 26 per cent drop in the value of homes sold, while Brisbane dropped 40 per cent.
Figures released by the NSW Supreme Court last week show repossessions by financial institutions climbed to 4873 in the 12 months to March -- more than double the number of three years ago. The present repossession rate is more than double the level when interest rates were at their highest, at 17 per cent, under the Hawke-Keating government.
Opposition Leader Kim Beazley said yesterday the climbing rate of home repossessions was due to high interest rates and broken promises by the Howard Government.
NSW Premier Morris Iemma also blamed the federal Government. "This is a human tragedy," he said. "These are the terrible consequences of John Howard's interest rate policies. We will continue to put the case to Canberra to ease off on their interest rate policy."
But NSW Opposition Leader Peter Debnam claimed that the state's high taxes, soaring living costs and a lack of economic growth were causing the surge in home repossessions across NSW.
"Interest rates are going up right around Australia, but it's in NSW that families are feeling the worst and that's because of the high cost, high tax, high regulation regime here and the fact that NSW has the highest mortgage cost, because the Government squeezedthe land supply, drove up prices, that made it a real nightmare for young families in NSW," Mr Debnam said.
Also of concern to the troubled market were new figures released last week showing the percentage of home loans going to first-home buyers fell for the third month in a row in July, to a 12-month low of 16.7 per cent.
Competition for borrowers among a crowded market of lenders is increasingly fierce as higher interest rates discourage borrowers.
"Churning" by mortgage brokers remains a feature of the industry. Churning occurs when a broker convinces a customer to refinance their loan with another lender so the broker can receive a commission or other incentive, even though the borrower may be no better off.
UNDER THE HAMMER
Value of auction sales
City ............ Saturday ... Previous Saturday ... % Change
Brisbane ..... $5.8m ....... $9.7m .................... -40.2
Adelaide ...... $11.4m ..... $15.4m .................. -25.9
Sydney ....... $75.3m ..... $95.7m ................... -21.3
Melbourne ... $99.5m ..... $92.6m ................... +7.4
Source: Australian Property Monitors
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