Mortgage Stress

Reporter: Andrea Burns

The experts will tell us it's the rate rise we had to have -- otherwise inflation will get out of control. But for many families with a mortgage around the 350-thousand dollars, the extra sixty bucks cash they'll now have to find each month will blow the budget. "I would do everything I can to stay in the market place" John Dastlik from the Housing Industry Association says he knows families are hurting. "Our figures show that in the rental market some 49 000 households are in rental stress in the mortgage markets some 82 and a half thousand are in mortgage stress so when we talk about stress, these people are paying at least or more than 30% of their gross income on either their rent and or their mortgage"

Even so, he says the answer is to build more homes and wants government to make that easier by freeing up more land and doing more joint ventures with everyday people. "Our concern is, people are not building houses, including investors and that's going to perhaps put some pressure on us in the long term."

Hard not to, but Robert Allen from the Department of Consumer Protection says you do still have rights when it comes to keeping the house. "With repossessions there are a number of protections in the consumer credit code, you must have appropriate notice etc when you go into default and that must be observed, the bank must also seek to get a court order at the end of the day"

Robert says step one in EVERY case is contact your lender, see if you can negotiate to freeze payments, maybe cut them back for a while, renegotiate. The bank may lose money if you lose your house - it makes business sense for them to help you keep it.


Contact your lender

* freeze payments

* reduce

* renegotiate

"There are various costs and fees associated with repossessing a home, if a home is actually repossessed and sold, it may be the case that, depending on the market you're in, that, depending what property values are doing, it may be the case it's better for the bank not to have that property sold at that point in time" If they won't come to the party, under WA law, Consumer Protection can go into bat for you. "We can seek to negotiate with the credit provider on their behalf; it is a free service we do provide"

Also free - financial counsellors to give advice on getting your finances in order. If the threatening letters have started, get legal advice - those free financial counselling organisations even have them on staff


See a financial counsellor

Get legal advice

-Source Department of Consumer Employment Protection

For further Information contact:

Department of Consumer Protection: 1300 30 40 54 (State-wide)
For your nearest financial counsellor: 9221 9411 (WA)

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