Respite for struggling borrowers
Phil Naylor
In response to growing public concern about the number of borrowers struggling to repay their home loans, the Mortgage and Finance Association of Australia (MFAA) has introduced measures to ensure non-bank lenders, mortgage managers and brokers offer a helping hand to those with financial woes.
The new amendments to the MFAA’s Code of Practice require members to consider varying a borrower’s terms of repayment if they are having trouble repaying their loan.
Members are also required to consider encouraging the borrower to make repayments they can afford and suspending action to recover missed payments until they have advised the borrower whether or not they plan to vary their terms of repayment and, if so, what those variations will be.
The amendments state that MFAA members are required to act “reasonably” when assessing a borrower’s request to vary his or her payment terms. They must not ask the borrower to apply for early release of his or her superannuation funds or borrow money from a third party before advising that borrower whether or not it will alter their payment terms.
MFAA chief executive Phil Naylor said the new amendments reflect the fact that members owe their business success to the relationships they have with their borrowers.
“About 55 per cent of all mortgages in Australia are written by non-banks, mortgage managers and mortgage brokers and it is appropriate that they assist borrowers who find themselves in financial difficulty.”
He advised borrowers having trouble meeting their repayments to advise their lenders immediately so that the best outcome for all can be achieved as quickly as possible.
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