New hardship laws a real shocker for industry: Denovan

by Adam Smith09 Apr 2013
"You would have thought it was sensible for me to say, 'You've told me you can't pay now, Is there some arrangement we can come to?' If the punter says no, the lender shouldn't have to go through the process. But now it's going to get referred to an EDR, and they're going to lose a minimum of two to three months and potentially nine months where no payments are made on the mortgage and the customer's equity is eroding," he said.

While Denovan said the intention of the regulations was to make consumers more aware of hardship provisions, he warned that the regulations could have the unintended consequence of tightening credit and locking out some borrowers.

"We're potentially getting into a situation like Italy where it takes two to three years to sell someone up. That's going to limit the availability of finance," he said.

Denovan said the MFAA would lobby to find a "happy medium" in the regulations.

"The MFAA will fight the good fight - and maybe lose - but we'll do our best."

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  • by SIDBROKER 9/04/2013 10:22:01 AM

    WOW, Is this not what trigered GFC in the first place. WOW Mr. Swan does your stupity have any limit at all.

  • by Country Broker 9/04/2013 10:24:02 AM

    If they do not deal sensibly with this and amend these provisions , we potentially will see no 95% loans , and LMI premiums rising ( already happening) , what were the lobbyists who represent the lenders thinking or doing ??

  • by Chris C 9/04/2013 10:29:18 AM

    This is a cop out for the legislators....the solicitors who write this stuff. All this will do is create more legal fees that Banks and the Consumer will have to pay when the so called verbal advice is disputed or questioned as to its validity under this law. What ever happend to NCCP refgulations - everything has to be upfront and on paper and fully assessed for validity and correctness.