Qld: Banks' mortgage fire sales to be banned

AAP General News (Australia)
12-03-2008
Qld: Banks' mortgage fire sales to be banned

By Jessica Marszalek

BRISBANE, Dec 3 AAP - Lenders will be outlawed from conducting mortgage fire sales
in Queensland in a move to protect the growing numbers of defaulting homeowners.

Premier Anna Bligh announced laws would be fast-tracked through parliament on Wednesday
to prevent financial institutions intentionally selling repossessed properties at below
market value.

Ms Bligh said the practice saw banks accepting offers to cover their own costs, which
left the home owner and their family with little or no equity to start again.

"The only thing worse than the prospect of losing your home is the concern that your
financial institution could sell your property quickly and at below market value just
to cover outstanding debts, leaving you with nothing," Ms Bligh said.

Currently the Property Law Act requires mortgagees to take reasonable care to ensure
the property is sold at market value.

The new laws will require lenders to advertise the sale, obtain an independent valuation,
maintain the property and sell it by auction unless another means is appropriate.

Lenders who fail to follow these requirements will face fines of up to $20,000.

Homeowners will also be able to take civil court action, as they were able to do in the past.

Ms Bligh said it was timely to introduce the legislation now, with mortgage defaults
jumping dramatically in the past four months and the Gold Coast suburb of Helensvale the
most mortgage-stressed suburb in the country.

"As we go into very difficult financial times there will be people who are unscrupulous,
who seek to make something out of other people's misfortunes," she said.

"That's why we've rushed this legislation through."

Meanwhile, Ms Bligh said she was outraged that Westpac and ANZ banks had not passed
on the full 100 basis point cut to official rates handed down by the Reserve Bank of Australia
(RBA) on Tuesday.

The Commonwealth Bank and National Australia Bank passed on the full cut, but Westpac
(0.80) and ANZ (0.83) were less generous.

"Every single one of their customers deserves an explanation," Ms Bligh said.

"For many, a one per cent cut could be the difference between making the mortgage or
not and they have every right to be angry."

AAP jmm/pjo/jfm

KEYWORD: MORTGAGE QLD WRAP

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