The Foreclosure Report

Record Defaults In Victoria, Australia

The Herald Sun reports from Australia. "More than 50 Victorian homeowners a week are being dragged before the courts for falling behind on their loan repayments. The figure has hit an all-time high in the five months to November, with experts warning it will get worse with crippling post-Christmas debt."

"The number of Victorians being pushed out of their homes because they can't pay mortgages has tripled since 2000-2001, according to court statistics. Unscrupulous lenders were hitting people in financial difficulty who used equity in their homes to refinance, the Consumer Action Law Centre's Carolyn Bond said."

"Some did not fully consider a client's ability to repay the loan and burdened them with high fees. Some people defaulted within months, she said. With personal debt running at $30 billion nationally, a major crisis could come after the Christmas credit card bills arrived, she said."

"Victorian Supreme Court figures released to the Sunday Herald Sun showed a steady increase in lenders taking court action against clients. In 2000-2001 lenders lodged 897 writs to oust home buyers, which was 2.5 applications per day. That jumped to 7.3 per day, or a total of 2689, in the 2005-2006 financial year. In the five months to November, 1112 writs were lodged, increasing the daily rate to 7.5."

"The head of the Australian Bankers' Association, David Bell, blamed non-bank lenders, which launched 70 per cent of the default legal action while lending only to 5 per cent of the market."

"Victorian Council of Social Service chief executive Cath Smith said housing affordability had doubled to six times the average annual wage in the past 10 years. Foreclosures particularly affected the outer suburbs, where the past three interest rate hikes and petrol prices were driving people to the edge, she said."

posted by Ben Jones @ 1:10 PM