BANKS GIVE LOAN BREATHER TO JOBLESS
Sunday, April 19th, 2009 Subscribe To Our Feed
Broad measures are being made to help alleviate the plight of jobless homebuyers. The Federal Government and major banks are coming up with deals to ease the mortgage repayments of the unemployed, as well as other special considerations on car loans and other debts.
Treasurer Wayne Swan sturdily advocated the four big Australian banks to help the rising number of jobless who are missing payments on their mortgage and further financial cash loans. This was backed by Prime Minister Kevin Rudd in a speech given during an employment forum last week. He said that banks decided to postpone loan repayments for up to 12 months for the unemployed. However, accrued interest will be rolled back into the loan.
It is estimated that 800,000 people in Australia will lose their jobs by the middle of next year and this financial support is calculated to slow down rising mortgage default rates and forced home sales for this year and the next.
Other than housing loans, the major banks likewise arranged to grant interest-only repayment alternatives on car loans and other types of personal cash loans. In addition, borrowers who are going through financial difficulties may have their fees waived as conditions apply.
These are some measures that partly stemmed from the Government’s pronouncement in October last year to guarantee bank deposits and wholesale funding for banks in order to steady the shaky financial situation. For banks to augment domestic mortgages, the wholesale guarantee is designed to slash lending costs for these financial institutions to increase foreign debts.Through this guarantee, the government secures more bargaining power.
These moves have come at a better time since a marked increase is seen in unemployment rates. In Queensland alone, figures show that in February, stipends for job seekers increased by almost 10 percent, rounding off the number to an estimated 73,000 individuals. Youth and Newstart allowances also saw a rise to 9.9 percent, making it the largest compared with other states and territories.
In other places such as Victoria and the Australian Capital Territory, the statistics for job seekers is at a 3.9 percent increase. Across the country, there is almost an increase of 10 percent in the number of short-term job seekers.Many of the laid off workers have queued for government help in the last year.According to the Treasury, a 7 percent unemployment rate or close to 800,000 people is expected by the middle of 2010.
