MONEYREVIEW

Latest News

BANKS have taken the unprecedented step of launching a website calling on financially stressed homeowners to negotiate “hardship” packages to avoid default on their mortgages.

The Australian Bankers Association’s launch in recent days of the site shows the Big Four banks are on high alert for a rocky 2012 with a sharp rise in defaults.

Association CEO Steven Munchenberg admitted economic uncertainty had been a key factor in the move.

“We don’t know what’s going to happen in Europe and in Australia, but it’s better we start to think about making sure we’re prepared for whatever happens,” he said.

He confirmed it was the first time the banks had set up a site to deal with customer hardship on mortgages and other financial products like credit cards and personal loans.

The European financial crisis, the two-speed Australian economy and rising unemployment levels in places like western Sydney are already starting to affect the viability of bank loans.

Mr Munchenberg said banks were aware sectors of the economy had been “struggling” in a local economy dominated by mining.

The government last week forecast unemployment would increase to 5.5 per cent by mid-2012. However, in parts of western Sydney, the jobless rate is above 7 per cent.

Recent Reserve Bank reports have pointed to a higher ratio of “non-performing loans” and people falling behind on mortgage repayments in recent months.

The banks’ site – www.doingittough.info – directs those who are financially stressed to click on icons of their individual banks to go straight through to “hardship websites” for each institution. It also contains financial health checklists testing whether customers are at risk of loan default.

Mr Munchenberg claimed these measures were to ensure customers were not in over their heads.

Banks, he said, had no desire to foreclose on homes.

Source: news.com.au

Looking for savings accounts? Compare savings accounts at www.yoursavingsaccounts.com.au