 Cap on withdrawals lifted
If you are finding yourself in financial hardship you may now be able to withdraw funds from frozen home loan funds.
The Australian Securities and Investments Commission (ASIC) approved measure so that operators can now make payments to fund members who are struggling financially.
The cap on withdrawals will increase from $20,000 to $100,00 and ASIC commissioner Greg Medcraft believes this will offer financial relief for many Australians.
As well as the cap being increased, the reasons for receiving money from frozen home loans will be ammended to include beneficiaries of the deceased and long-term unemployed people.
Currently, the grounds on which investors can withdraw funds include an inability to meet family living expenses and compassionate reasons, such as medical costs or funeral expenses, as well as cases of permanent incapacity.
"We have expanded hardship relief to pick up special situations where the industry considers that further discretion for relief is needed." Mr Medcraft says.
The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability Index recently reported there has been a 10 per cent increase in the number of households making extra payments and fewer are struggling to meet repayments. This data would seem to indicate that many home owners are not affected by global circumstances.
Genworth Financial's April/May 2009 national survey of 2000 consumers showed borrowers are reducing their total levels of debt, with 21 per cent now debt-free compared with 18 per cent in 2008.
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