With Job Losses Set To Rise, Affected Borrowers Are Urged To Speak To Their Lender

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29th October 2008, 01:48pm - Views: 765





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resi mortgage corporation pty limited ABN 61 092 564 415

Level 3, 458 Wattle Street, Ultimo NSW 2007


Tel 02 9280 0007   Fax 02 9280 0009   E-mail save@resi.com.au   PO Box 12 Broadway, NSW 2007











MEDIA RELEASE 

OCTOBER 28, 2008


WITH JOB LOSSES SET TO RISE,

AFFECTED BORROWERS ARE URGED TO SPEAK TO THEIR LENDER


Credit Ombudsman confirms non-banks ‘bending over backwards’ to help


Leading non-bank lender Resi Mortgage Corporation is urging borrowers dealing with job loss to

speak to their lender immediately, in order to put them in the best possible position to consider all

their available options.


Resi Mortgage Corporation’s Head of Consumer Advocacy, Lisa Montgomery, says with

unemployment predicted to jump significantly in Australia over the next twelve months, it is

imminent that the term ‘financial hardship’ will become one more familiar to many more borrowers.


She says: “The key thing to remember is not to internalise the issue but to speak to your lender. 

Lenders are keen to help, but need to know from affected borrowers sooner rather than later.”


Since the onset of the global financial crisis, there are now special Financial Hardship Guidelines

set out by the Credit Ombudsman Service Limited and CEO Raj Venga says non-banks in particular

are ‘bending over backwards’ to negotiate with those borrowers to reach appropriate outcomes. 


Resi’s Montgomery says although no-one likes to talk about the grim possibility of job loss, you do

have to consider and prepare for the likelihood that it could happen to you, particularly if as a

borrower, you have the responsibility of being the sole or primary breadwinner.


“If you find yourself in this position and anticipate having trouble making your mortgage payments,

the single most important action you need to take is to get in touch with your lender immediately and

explain your situation so that they can work with you to determine a course of action,” she says.


“Alternatively, if you let the matter slide it could make it more difficult to find a successful solution. By

sitting down with your lender and talking through ways in which you can manage your mortgage and stay

in your home, it makes sense for both parties, particularly if there is a timeframe for recovery.”


Montgomery says the key benefit for the borrower here is the relief from the emotional and physical

stress that these situations can produce, when it’s something that can be so easily prevented. 


Some areas where lenders may be able to offer flexibility are:

 

-

postponing payments;

-

reverting to paying interest only for the period, or;

-

refinancing the loan to an alternative product.


Montgomery says once you have had the time to more fully consider the longer term implications of

a job loss on your financial situation and have a realistic view on how long you may be out of work,

there are several other alternatives families and individuals may consider, including:


-

restructuring your finances so as to channel more funds towards your mortgage;

-

reducing the size of your mortgage by downsizing or relocating to a more affordable area, or;

-

encouraging another family member out to work, if this is an option.

resi mortgage corporation pty limited ABN 61 092 564 415

Level 3, 458 Wattle Street, Ultimo NSW 2007


Tel 02 9280 0007   Fax 02 9280 0009   E-mail save@resi.com.au   PO Box 12 Broadway, NSW 2007


-2-



In particular Montgomery says affected borrowers shouldn’t underestimate the value of restructuring

their finances as this step alone can sometimes be enough to take the heat out of the situation, by

reducing their monthly commitments and improving their cash flow.


Montgomery adds that apart from job loss, there are also other events such as prolonged sickness

or injury which may impact your ability to work and therefore meet all your financial commitments.


She says: “If you are able to budget for it, you can also consider investing in personal insurance

products such as income protection or total and permanent disability cover to protect against such

events.”



ENDS


Media Contact:

Lisa Montgomery, Head of Consumer Advocacy,

RESI Mortgage Corporation: (02) 8204 5012 or 0414 592 553


Karen Bristow- Kardan Consulting: 02 9967 3245










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