 Mortgage rescue plan
A national plan to save mortgages is being considered by the federal government. The plan may mean the big banks begin lowering their home loan fees and interest rates.
The Government may enter the mortgage market directly by issuing Australian Mortgage Bonds.
Homeowners are seeing lending levels not seen since the recession of the early 1990s according to new data.
"Australia's stricken securitisation markets mean regional lenders are finding it increasingly difficult to provide affordable home loans to country Australia," Peter Hall of Genworth Financial said.
"We need short-term measures that provide immediate relief, as well as long-term initiatives that keep credit doors open for regional Australia in good and bad economic times," he said.
The bonds could immediately solve the problem of scarce funds available to secondary lenders such as building societies and credit unions, which in turn could force the big banks to lower fees in order to compete.
Treasury and Department met with key players, including Genworth and ABACUS, two weeks ago in Canberra andheld a private, round-table meeting to discuss mortgage stress and other related issues.
The Genworth-ABACUS proposal remains unresolved as a spokesman for Treasurer Wayne Swan said no decision was ready as yet.
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