The Foreclosure Report

Banks Hiding Defaults At Auctions: Australia

The World Today from Australia. "On any Saturday in Western Sydney, banks and other lenders can now be found selling off the dreams of dozens of homeowners. Real estate agents who've worked in the stricken areas for a generation say they've never seen anything like it, even during three recessions."

"In a move, as we heard introduced by nearly every bank and non-bank lender in the past few months, real estate agents are now being told to hide the fact that properties being sold are repossessed after failed mortgages."

"The World Today's Michael Edwards reports on a single day he spent watching the sell-off that marks the move from boom to bust in Sydney's outer suburbs. If you were to listen to the auctioneer, as he dismissed some small bids, the house is an opportunity to make money."

"But the contract for sale tells a different story. This house, like many others being auctioned today, is empty. The people who took out a mortgage to live here have been moved on."

"The seller is the institution who wrote them their loan, have now taken their house back. The World Today has established that in Sydney alone as many as 20 homes a week go under the hammer as mortgagee sales."

"But the sell-off of seized properties started much earlier this Saturday, in Chester Hill, where 8 Mountview Avenue sold for $410,000. Its owner had bought it for $25,000 more than that, and pumped tens of thousands of dollars into improvements, before failing to make his mortgage repayments and losing it to his lender."

"By midday, when The World Today arrived at this auction in Castle Hill, in Sydney's north-west, half a dozen places had already been put under the hammer. The steady stream continued throughout the afternoon. All of them, whether advertised as so or not, were mortgagee auctions."

"The World Today has uncovered a new and deliberate policy by banks and non-bank lenders, to hide the fact that auctions were the result of defaulted mortgages. Several real estate agents explained the policy had been introduced by lenders in the past few months as repossessions spiked, and that sensitivity is reflected in a policy that saw The World Today barred from two other mortgagee auctions in Sydney's north-west on this same Saturday."

"In fact, one Sydney real estate agent told the program that he estimates nine out of 10 auction sales in outer western areas of Sydney are now the results of mortgage defaults. In the battler suburbs on the city's fringes, it's turned on its head the notion that buying a home used to deliver status and security."

posted by Ben Jones @ 2:01 PM