Protect non-bank lenders
The Mortgage and Finance Association of Australia has used a submission to a Parliamentary inquiry to urge the Government to ensure that non-bank lenders are not forced out of the market during the current credit crunch.
The MFAA’s chief executive, Phil Naylor, said that the credit crunch, while impacting on all providers, was having a greater impact on non-bank lenders that did not have access to deposits and were forced to rely on the global markets and securitisation of their loan funding.
“If non-bank lenders are squeezed out of the market because of a lack of access to funds, we will likely see a ‘back to the future’ scenario with banks dominating housing lending and interest rate margins creeping back to pre-1990s levels,” he said.
Naylor said that in order to sustain competition in the Australian housing market, Australia needed a mechanism to provide access to securitised funds, similar to that which operated in Canada and the US via the Government-sponsored structures such as Freddie Mac and Canada’s CMHC.
AUTHOR
Mike Taylor
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