The Foreclosure Report

Australians 'Battle To Hold On'

The West Australian has this update from down under. "WA home owners are bucking a national trend of a dramatic jump in loan defaults, saving their properties from repossession on the back of the State’s booming economy. The number of bankruptcies in WA also dropped in the past financial year, contrasting starkly with increases in NSW, Victoria, Queensland and the Northern Territory."

"But the WA Consumer Credit and Legal Service has warned the statistics are misleading and fail to show the drastic measures, including expensive refinancing and heavy reliance on credit cards, being taken by home owners who are struggling to meet their mortgage payments in the face of soaring property prices and rising interest rates."

"The downward trend goes against reports of more people losing their properties in the Eastern States, with similar figures in Victoria surging dramatically. Consumer Credit and Legal Service director Sue Mahalingham said foreclosures on homes were the tip of the iceberg and many families were refinancing to make ends meet, often using non-mainstream lenders that left them with higher interest rates and more stringent loan conditions."

"Ms Mahalingham said reliance on credit cards and 'pay-day' loans was also increasing, while it was likely some home owners were selling in the buoyant market to avoid hitting the wall. 'It means they might be keeping their house but at a significant cost,' she said."

"'The statistics do not reflect a lot of the other information we have. Welfare agencies are talking about an unmeetable demand for their services and are running out of money for emergency relief months ahead of time,' she said."

posted by Ben Jones @ 1:34 PM