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Canberra’s Boutique Real Estate and Property Management

Home repossessions start to bite

By johnboy 14 September 2006 44

The ABC is leading their national news site with a story on a sharp rise in home repossession in the ACT.

Apparently low documentation loans from mortgage brokers are the main culprit as they’ve allowed silly people to over-extend themselves.

It is, however, good news for folk looking to get into the market as a rash of forced sales should drive the market down nicely.


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44 Responses to
Home repossessions start to bite
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VYBerlinaV8 12:01 pm 18 Sep 06

“If you can’t cope with a couple of % points shift in the interest rate you shouldn’t be getting a mortgage.”

When we have borrowed for property our martgage broker recommended doing all budgeting on the basis of a 2% higher rate than what we actually received. That is apparently the number the industry considers gives home owners enough risk mitigation from interest rate rises. Makes sense, really.

vg 9:04 pm 15 Sep 06

If you can’t cope with a couple of % points shift in the interest rate you shouldn’t be getting a mortgage.

If you earn $100,000 per year you shouldn’t be mortgaging a $1,000,000 property with a 10% deposit.

Why do people walk into a mortgage with eyes open and bleat like stuck pigs when they can’t afford what should have been obvious? A fool and their money are soon parted…..or should that be a bogan and his money?

Maelinar 1:03 pm 15 Sep 06

Roland, you seem to only show up when Deb’s changing feet, something you want to tell us ?

VYBerlinaV8 12:13 pm 15 Sep 06

Low-doc and no-doc loans are a great idea and a great product. Personally I like to decide how much I can borrow and for what. I haven’t used one of these products yet, but likely will once banks decide I can’t have another investment property.

If you’re a small business owner with irregular (but solid) income, or have an unusual financial situation, they also work well.

The problem as I see it is the lack of financial education people receive. It’s hard to make informed decisions when you don’t know what you’re really getting yourself into – do we all REALLY understand all those small print clauses in our mortgage documents.

Perhaps some proper financial education for our kids is a good first step. There are plenty of resources out there developed by people who have started with nothing and done very well.

Roland GRNS 10:27 am 15 Sep 06

i give up:
heres the address

http://www.carefcs.org/

Roland GRNS 10:26 am 15 Sep 06

oops! try this:

“They want to take away our home” is on the website now.

Roland GRNS 10:25 am 15 Sep 06

“They want to tak away our home” is on the website now.

Big Al 8:26 am 15 Sep 06

I believe that one of the key issues raised in the report was that the non-bank mortgage lending sector is essentially unregulated and that these are the people behind these so called ‘low-doc’ or ‘no-doc’ loans where you don’t need to substantiate your income, assets and savings history etc. to get a loan. There’s a concern that less than scrupulous mortgage brokers might inflate applicant incomes to secure the finance.

In the end though, it’s the applicants that sign the paperwork not the broker so the responsibility rests with them.

LIC 11:11 pm 14 Sep 06

The actual numbers behind the 40% increase in repos were something like 65 to 91 – from what I recall they said on radio.

Like many here, I’m fairly unsympathetic to people who have gone in, borrowed more than they can afford, and find themselves coming unstuck when anything goes against them, like a modest rate rise, or petrol costing $20 more each week. Maybe these people should have been more realistic about assessing their ability to pay, and perhaps lower their expectations as to the type of house they think they need.

nyssa76 10:23 pm 14 Sep 06

I’ll be a scavenger….seriously.

If you can pick up a house cheaply do it. If people don’t think before they make such a HUGE decision, then to bad, so sad.

Sorry, rather cyncial tonight.

Mr_Shab 8:35 pm 14 Sep 06

Does that make you a scavenger of human misery? 😉

Vic Bitterman 8:16 pm 14 Sep 06

My last investment property I bought was a mortgagee firesale as it was repo’d from the previous owners.

I picked it up for a song!!!!!!! Very pleased.

andy 5:01 pm 14 Sep 06

vyberlina: no, they don’t.
in fact, they tell you “but you own property”
it doesn’t matter that its being sold under repossesion. they won’t help.

simto 3:31 pm 14 Sep 06

If you’re sucking at the public teat for your housing, then you lose certain options. A key one being “the ability to decide when and where you sell your assets”.

If you want to keep your privacy, go for it. But don’t expect other people to subsidise your living arrangements.

VYBerlinaV8 2:56 pm 14 Sep 06

Why not just make the public available to all and make rent unfavourable to those who can afford other housing?

Also, disqualifying on the basis of assets alone can be very unfair, especially if govco decides to starting ‘deeming’ values.

bonfire 2:48 pm 14 Sep 06

im disqualified on the value of my stamp collection alone.

unlikely id show them my bank statements – none of their business.

the poor should not have to endure such intrusions on their privacy either.

miz 1:46 pm 14 Sep 06

VY, ACT Housing eligibility is here http://www.dhcs.act.gov.au/hcs/Services/PublicHousing/Application/Eligibility.htm
Not sure if ‘special consideration’ comes into it, it would depend on why they lost their house and how that affects the eligibility criteria.

VYBerlinaV8 1:37 pm 14 Sep 06

hehehe…the nearest I get to politically correct is paying my speeding fines on time.

Absent Diane 1:27 pm 14 Sep 06

nope I detest pseudo-intellectual leftist hippy types … far too PC, no sense of humour and head stuck right up their arse.

VYBerlinaV8 1:25 pm 14 Sep 06

Does the ACT govt give any special consideration to persons who have lost their house due to repossession within the context of providing public housing?

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