Region faces housing blues
NORTHERN Rivers residents are having a tougher time handling their mortgages than in all but a handful of places in Australia, new figures reveal.
A report by ratings agency Fitch Ratings shows the Richmond-Tweed region has the 16th highest rate of home owners more than 30 days behind on their mortgage repayments.
According to the report, and ranked on the amount of money owed, a total 2.22% of home owners on the Northern Rivers had fallen behind on their mortgages as of March 31, compared with a national average of about 1%.
Even more alarmingly, the rate had grown substantially during the past 18 months – from 1.24% in September 2009.
Kim Morris, of Summerland Credit Union, said the credit union’s numbers were considerably lower than those supplied in the report – but the overall trend was similar.
“Generally speaking you’d probably find credit union figures would be below commercial lenders and more aggressive lenders pursuing market share,” he said.
That was generally because credit unions took a much more conservative approach to lending money.
However, even with its risk-averse approach, Mr Morris said Summerland was still seeing more of its Northern Rivers customers struggling to keep up with their repayments.
“Our figures wouldn’t suggest that (2.22%) level ... but looking at the trends, it’s still upwards,” he said.
“If people are heading that way it’s best to make a phone call first to see if there’s ways to restructure or solve a problem before it gets to a position of no-return.”
Lismore and District Financial Counselling Service manager Steve Snelgrove says he has never seen so many clients suffering mortgage stress.
“It just keeps increasing,” he said. “The number of people with mortgage issues remains a substantial amount of our work.”
Compounding that was a flat housing market.
In the worst cases, the service was seeing people who borrowed heavily to buy at the top of the market deciding they needed to sell their homes only to discover they were worth less than when they bought them and less than what they owed.
“They’re losing their savings as well as losing a property,” Mr Snelgrove said.
“Losing your home is bereavement, and getting through it is equivalent to bereavement.
“We have clients who have had to change their route to work so they don’t drive past their old house – or former business owners who’ve had to do the same so they don’t drive past their old business.”
If Reserve Bank boss Glenn Stevens’ hints of another rate rise in the next few months come true, Mr Snelgrove said things would worsen even further.
“Any increase in costs adds further stress and we have a lot of people who have their budgets down to the bone,” he said.
Help is at hand
LEGAL Aid NSW has put together a detailed guide designed to help people struggling with their mortgage.
The Mortgage Stress Handbook is free and offers help for people who are worried about their mortgage through to – at the other end of the scale – people who are fighting off attempts by their bank to take their home.
The handbook offers information such as whether you ought to be at panic stations about your mortgage, tells you your rights, how you can make repayment arrangements with your lender, and what sort of help is available if you are behind on your repayments. It even provides sample letters and forms you can use in dealing with institutions.
The handbook is available free online at www.legalaid.nsw.gov.au/mortgagestresshandbook.