Houses seized as mortgage defaults hit record


THE number of homes and businesses repossessed by banks has reached an all-time high in Queensland as record numbers of owners default on mortgage repayments.

Justice Department figures show lenders lodged 193 claims to repossess homes and businesses in the state's courts during August.

It is the highest monthly total since records began about 1992, surpassing the previous record set in April last year by 17 claims.

Lifeline financial counselling practice leader Ken Campbell said the figures were just "the tip of the iceberg" as many cases never made it to court.

He said a lot of people negotiated with banks to suspend their mortgage repayment on the condition the homeowner put their property up for sale.

"It technically becomes a de facto repossession because the owner knows that if they don't get the property on the market then eventually the bank is going to sell it from under them," he said.


Mr Campbell said counsellors were "bracing for another onslaught in demand" after the RBA raised the official cash rate from 4.5 to 4.75 per cent on Tuesday.

Real Estate Institute of Queensland managing director Dan Molloy said the August spike showed the typical lag between rate rises and the impact on homeowners.

"The series of six interest rate increases in the period from October last year to May this year has had a dramatic and tragic impact on some people," he said.

"The cumulative effect of those adding up to $300 a month on the average $300,000 mortgage obviously was too much for some people and the financial institutions moved."

The Justice Department figures show repossession claims peaked in 2008-09 at the height of the global financial crisis with 1759 cases, before steadying to 1612 cases in 2009-10.

This financial year looks set to be worse, with claims made between July and September topping 532 – 95 more than the same period in 2008.

Australian Financial Counselling and Credit Reform Association executive director Fiona Guthrie said many people tried to ignore their impending financial doom.

She said those struggling to meet repayments should call a financial counsellor and organise hardship arrangements with their lender.

Disputes can be referred to the Financial Ombudsmen Service.

"It means that debt-collection activity and legal action has to cease so it gives you a breathing space to sort it out," she said.



Comments on this story

    *
     army Posted at 12:59 PM Today

         there will be more poverty in australia than ever before,prices going through the roof ,i say get rid of the lab and lib gov and get some one in there who is going to look after the people,and i see pollies got another pay rise again,so whats that put them on 20,000 dollars a day,the way we are going this country is heading for a huge reccesion.

    *
     Garry Brock of Brisbane Posted at 12:54 PM Today

         You have to kinding me, Lace of the real world. A bank manager who lives in the real world, what a crock

If you are in trouble, you should talk to your bank, before you fall that far behind.
http://www.fido.gov.au/fido/fido.nsf/byheadline/Trouble-with-debt

"Exploiting gullible and vulnerable people". These people approached the real estate agents. It's not the agents' fault that the customers didn't think things through properly.

I can't believe people are trying to blame the housing bubble on Rudd.

Think about it.

freediver wrote on Nov 6^th, 2010 at 1:47pm:


A lot of it was caused by Dudd !! Bloody useless idiots these governments

http://www.debtdeflation.com/blogs/2009/03/22/fhb-boost-is-australias-sub-prime-...

I still think the whole 'economic' thing is due to Zimbabwe of all things.

Whats worse than Mugabe using bad methods to provide for his 'own' people against the illegal ownership of their lands by British Colonialists
against
The UK laying seige (via UN empowerment) upon Zimbabwe and allowing millions of pro-UK supporters to starve to death or flee into further abuse as illegal immigrants into other nations.
??
...at least Mugabe tries to provide for his supporters.

INFLATION has gotta start from somewhere.

Mortgage interest rates are still at very low levels historically so if anyone is having problems paying back their loans all it means is they got in over their heads and should learn how to manage their money and lives better.
One very big reason for the extra increases by the banks is that the international money market reckons our real estate is way over valued and are factoring in a collapse over the next 12 mths so our banks are paying a premium above the reserve bank rate for overseas money. That is why interest rates on deposits have increased and are close to mortgage interest rates.
Australian real estate has been way over valued for 10 yrs and the bubble has to burst sometime, are young people these days so stupid that they don't think more than a day ahead?
Dont blame the banks..they didnt force the price of housing up, the short sighted buyers did that all by themselves.

Verge wrote on Nov 6^th, 2010 at 7:53pm:


Then why give the first home buyers grant to people ?? Why don't the Governments keep out of private enterprise ?