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Australia: the land of easy mortgage credit
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ASIC steps up with checks for planners, mortgage brokers
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Saul Eslake: Morrison mortgage reforms crazy
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Sub-prime mortgages are back in vogue
at 12:08 am on May 11, 2021 | 46 comments
As we know, the Australian Bureau of Statistics’ (ABS) latest lending data reported the biggest ever boom in mortgage finance commitments, up a whopping 55% in the year to March 2021:
Australia’s biggest ever mortgage boom.
Amid the mortgage frenzy, there are increasing signs that lenders are dropping lending standards. The latest example came yesterday when NAB owned U-Bank announced that it is offering cheap 15% deposit home loans without borrowers needing lenders mortgage insurance:
UBank chief executive Philippa Watson said reducing the threshold would shave off roughly seven months of saving for home buyers…
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As we know, the Hayne Banking Royal Commission’s first recommendation was to maintain responsible lending laws:
Source: Hayne Banking Royal Commission Final Report.
The Hayne Royal Commission came to this recommendation after observing multiple cases of predatory lending over its 12 month deliberation.
Despite this recommendation, Treasurer Josh Frydenberg is currently seeking to abolish responsible lending laws following pressure from the banking industry, who claim such rules are a handbrake on credit. Never mind that new mortgage commitments are running at record high levels, which completely debunks their claim.
Bizarrely, RBA Governor Phil Lowe also tacitly supported the abolition of responsible lending rules, last year telling the Standing Committee on Economics that Australian mortgage restrictions had become too strict and were constraining the economy: