11-189MR ASIC asks people to check their mortgage health
Thursday 1 September 2011
ASIC today launched new resources and tools on its consumer finance website www.moneysmart.gov.au to help people avoid mortgage stress.
Delia Rickard ASIC Senior Executive Leader Financial Literacy, Consumers, Advisers, Retail Investors said: ‘From time to time some people find themselves struggling to pay their mortgage as well as juggling debts. Financial issues are often triggered by a change in circumstances such as illness, losing employment or divorce.
‘We know a small number of Australians are in arrears on their mortgage. However, many more struggle to make their mortgage repayments on time, and can only do so by running up other debt. We want to educate people about the signs of mortgage stress and motivate them to take early action.1'
ASIC is holding a Mortgage Health Month in September and is encouraging everyone to do the online Mortgage Health Check on the MoneySmart website. The Health Check tells people where they are at with their mortgage and gives them practical steps to take if they have any mortgage issues.
ASIC’s mortgage health tools on www.moneysmart.gov.au also include:
- video clips of real people explaining how they have dealt with mortgage stress
- guidance for people in every type of mortgage situation
- sample letters for people to send their lender if they are in financial hardship
- the mortgage switching calculator to help people see if switching is an option, and
- video clips explaining how financial counsellors and legal services can help.
Ms Rickard said: ‘If there are signs you may have trouble with your mortgage, take action straight away to get back on track. If you don't feel in control of your money then use the MoneySmart budget planner. If you are in danger of missing a mortgage repayment, speak to your lender about changing your repayments or your loan term.
‘If your situation is more serious, or you can’t work things out with your lender, you should seek help from a free financial counsellor, a free legal service or an external dispute resolution scheme. The MoneySmart website can help you locate the best service for you.
‘If you know a family member or friend who is struggling with their mortgage, MoneySmart also has sensible advice on how to approach them and help in a practical way,’ said Ms Rickard.
ASIC will hold events in specific geographical areas where the rate of mortgage stress is high. It will partner with local services and organisation in Fairfield and Liverpool in NSW, the Mandurah region in Western Australia and in Logan and the Gold Coast in Queensland to provide and promote specialised assistance to people at risk or experiencing mortgage stress.
ASIC will also hold briefings for banks and other lenders, to encourage them to promote the MoneySmart website to consumers who are in arrears on loan repayments.
Background
Since 1 July 2010 ASIC, the national financial services regulator has been responsible for consumer credit regulation.
ASIC developed the MoneySmart website, www.moneysmart.gov.au, to give consumers and investors independent, simple guidance that they can trust. An ASIC priority is to assist people to be confident and informed consumers. ASIC’s work to help people understand their options and to act early when faced with mortgage stress is an important way in which it fulfils that priority.
For more information visit MoneySmart (www.moneysmart.gov.au), follow MoneySmartTeam on Twitter or like the MoneySmartAU Facebook page.
Some signs that you might have mortgage problems:
- You are struggling to pay your bills.
- You have had a drop in your family's income.
- You are in the middle of a divorce or separation.
- You are using your credit card to pay for essential items.
- You are having health problems due to money worries.
- You are worried how you would cope with an interest rate rise.
Simple steps to improve mortgage health
- create a budget – See MoneySmart’s budget planner
- talk to your lender if you are struggling – See MoneySmart for sample letters
- if talking to your lender doesn’t resolve the problem, talk to an external dispute resolution scheme such as the Financial Ombudsman Service, call 1300 780 808
- talk to a free financial counsellor – See MoneySmart to find a financial counsellor or call 1800 007 007
- get free legal help – See MoneySmart for your nearest legal service.
Visit www.moneysmart.gov.au
Note 1:
Protecting Wealth in the family home, ASIC Report 119, March 2008.
Making ends meet, Wesley Mission, October 2010.
The Experience of mortgage distress in Western Sydney, by the Urban Research Centre, University of Western Sydney, 2010.
Mortgage default in Australia, AHURI, March 2010.
The great Australian nightmare: mortgage default and repossession, AHURI, July 2010.
Courting Debt - the legal needs of people facing civil consumer debt problems, Department of Justice, Victoria, July 2008.
Evidence versus Emotion, How do we really make financial decisions, CITI, The Australian Institute, December 2010.
Fujitsu Consulting, Anatomy of Australian Mortgage Stress, observations from the Omnibus Survey 2006–2008, 2008.
ASIC Website: Printed 06/20/2013
