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  1. #1
    Join Date
    Sep 2003
    High up above and deep down under

    Default Houses seized as mortgage defaults hit record

    Houses seized as mortgage defaults hit record

    THE number of homes and businesses repossessed by banks has reached an all-time high in Queensland as record numbers of owners default on mortgage repayments.

    Justice Department figures show lenders lodged 193 claims to repossess homes and businesses in the state's courts during August.
    It is the highest monthly total since records began about 1992, surpassing the previous record set in April last year by 17 claims.
    Lifeline financial counselling practice leader Ken Campbell said the figures were just "the tip of the iceberg" as many cases never made it to court.
    He said a lot of people negotiated with banks to suspend their mortgage repayment on the condition the homeowner put their property up for sale.
    "It technically becomes a de facto repossession because the owner knows that if they don't get the property on the market then eventually the bank is going to sell it from under them," he said.
    Mr Campbell said counsellors were "bracing for another onslaught in demand" after the RBA raised the official cash rate from 4.5 to 4.75 per cent on Tuesday.
    Real Estate Institute of Queensland managing director Dan Molloy said the August spike showed the typical lag between rate rises and the impact on homeowners.
    "The series of six interest rate increases in the period from October last year to May this year has had a dramatic and tragic impact on some people," he said.
    "The cumulative effect of those adding up to $300 a month on the average $300,000 mortgage obviously was too much for some people and the financial institutions moved."
    The Justice Department figures show repossession claims peaked in 2008-09 at the height of the global financial crisis with 1759 cases, before steadying to 1612 cases in 2009-10.
    This financial year looks set to be worse, with claims made between July and September topping 532 – 95 more than the same period in 2008.
    Australian Financial Counselling and Credit Reform Association executive director Fiona Guthrie said many people tried to ignore their impending financial doom.
    She said those struggling to meet repayments should call a financial counsellor and organise hardship arrangements with their lender.
    Disputes can be referred to the Financial Ombudsmen Service.
    "It means that debt-collection activity and legal action has to cease so it gives you a breathing space to sort it out," she said.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


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