Home loan lending practices under parliamentary scrutiny

A federal parliamentary committee will host a public hearing in Canberra as part of its investigation into home lending practices.

The House of Representatives Economics Committee (HREC) will hear submissions from financial institutions on the growing number of mortgage defaults and foreclosures as more people struggle with their home loan repayments.

HREC deputy chair Sharon Bird says south-west Sydney is experiencing the highest number of mortgage defaults.

Ms Bird says some unscrupulous mortgage lenders are able to escape regulations to provide unsustainable home loans.

“There’s some evidence from the submissions that the non-bank home loan lenders and some of the new types of financial mortgage loans that people are getting into are much higher risk, that people are being encouraged to undertake debt that they really can’t service,” she said.

Source: ABC

About: Rick Adlam: Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers. Website: http://www.mrmortgage.com.au