Slipping off the property ladder

Failing to meet home loan repayments could see you lose your house. The mechanics of repossession vary from state to state. Basically your bank or lender has the right to seize and sell your house if you fall behind in repayments; fail to make up the repayments within a specified time frame after receiving default notices; and don’t have a defence for doing so.

In September the House of Representatives Economics Committee released a report on home loan practices and how to deal with people in financial difficulty. In the report, the RBA estimated there were 5.3 million outstanding housing loans in Australia, with about 11,800, or 0.22 per cent of those in arrears by more than 90 days.

It’s the low-doc and non-conforming borrowers who are getting into trouble, with around 7 per cent of low-doc home loans in arrears, and about 0.95 per cent of non-conforming loans. The RBA said some of the non-bank new entrants to the housing loan market seemed to be quicker off the mark to seek repossession than traditional lenders.

In the year to August, there were 5605 applications to New South Wales courts and 2775 to Victorian courts for property repossession.

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source: realestate.com