Does the CBA have a heart or just covering its outlays???
I say the latter!
Since when has any Australian bank had a heart or a heartbeat last 25 years when it comes to borrowers?
The CBA must feel that things are going to get very tough to release a statement like this below:
Will the others follow?
One thing is for certain this will only help keep the market house prices proped up...........unfortunately for a little longer.
The CBA doesnt give a flying toss about its borrowers..They are just interested in ensuring loans are serviced in some capacity and can keep their investors happy.
I guess its a smart business ploy if nothing else and now a very good reason to put to the Govt a valid excuse for not passing along any further full rate cuts!
Which Bank? The shareholders Bank!
Courtesy of the Australian:
HOME owners who lose their jobs will be thrown a lifeline by the nation's biggest mortgage lender, which yesterday announced interest deferrals of up to 12 months to stop customers falling into arrears and triggering a wave of forced sales.
The Commonwealth Bank initiative, announced by chief executive Ralph Norris at a business lunch in Melbourne, follows recent discussions between Wayne Swan and the major banks about measures to assist families hit by the global recession.
With CBA itself predicting last month that the jobless rate could blow out from its current level of 5.2 per cent to a peak of 7 per cent late next year, Mr Norris said that it was not in the bank's interest to see people "get into trouble".
"In the case of those unfortunate to be unemployed, we will provide repayment holidays for six months, and in some circumstances up to 12 months, with interest being capitalised," he said. Mortgage holders will ultimately have to pay the deferred payments, plus interest.
Mr Norris added that he could not rule out job losses at CBA because of deteriorating economic conditions.
Senior banking industry sources said yesterday there had been strong pressure from Canberra in recent weeks to develop hardship packages for customers who fall behind in their home-loan repayments.
While the Treasurer has had discussions with the banks about measures to assist families experiencing hardship, a CBA spokesman denied the bank had responded to pressure from Canberra.
"This initiative has been under consideration since January," he said.
The Government's hand in its dealings with the Big Four banks has been strengthened by the introduction of last October's deposit and wholesale funding guarantees, which have helped stabilise the financial system.
Since then, the Government has intensified pressure to pass on cuts in official interest rates to customers, as well as keep credit flowing to small and medium-sized businesses.
In the meantime, the funding guarantee has enabled the banks to raise $60 billion in offshore debt markets for on-lending to their customers, at a time when investor appetite for non-government guaranteed debt has evaporated as a result of a wave of bank failures.
The major banks, however, have had to pay the federal Government more than $400 million in fees to rent its AAA sovereign debt rating.
Asked by The Australian yesterday if the guarantees had given the Government a mandate to bash the banks at will, Mr Norris said: "I don't think the Government needs to bash the banks at any time."
The CBA chief said the deposit guarantee had been put in place to stabilise the banking system.
The major banks, he said, had not needed a deposit guarantee.
Furthermore, unlike the billions spent offshore to prop up banks and banking systems, domestic lenders had not received a single taxpayer dollar.
"And I don't think any dollars of taxpayer money will be used," Mr Norris said.
"Likewise with the wholesale guarantee, the banks are actually paying for the guarantee, and it's hard, again, to see the Government having to front up taxpayer dollars to honour those guarantees."
Housing Industry Association chief executive Chris Lamont praised the initiative.
"I think it will provide a welcome safety net for Australian families and Australians who may do it tough over the next 12 to 18 months," he said.
But one banker warned yesterday that capitalising home loan interest payments for the newly unemployed could actually lead to a worse outcome if the borrower was unable to find a job.
Christopher Zinn, a spokesman for consumer association Choice, was also cautious.
"Increased flexibility will help, and for some people it will work," he said.
"But given the circumstances, people will need to make realistic decisions."
While all the major banks have assistance options for customers, CBA is the first to specifically respond to circumstances created by the financial crisis.
ANZ chief executive Australia Brian Hartzer said hardship options included "short-term repayment holidays where interest is capitalised".
"We have clear policies on supporting customers facing hardship and are continuing to look at ways we can expand those," he said.
A National Australia Bank spokesman pointed to similar policies for customers experiencing changed circumstances, including job losses.
A spokesman for Westpac said the bank already offered deferred payments for customers experiencing hardship if it was "in their interests".
"We look at this issue on a case-by-case basis," he said.
Consumer Credit Legal Service co-ordinator Karen Cox said it was "absolutely vital" that banks were willing to be flexible about hardship arrangements in the current economic climate.
"I think the flexibility is fantastic," Ms Cox said.
"We've been lobbying for improvements in the law for exactly that reason."
But she warned that consumers needed to be aware that because the interest was capitalised, they could reach a situation where they owed more than the house was worth.
"As with anything there are consequences, and here the danger is negative equity, especially where property prices are falling," she said. "So people do need to get advice."
I say the latter!
Since when has any Australian bank had a heart or a heartbeat last 25 years when it comes to borrowers?
The CBA must feel that things are going to get very tough to release a statement like this below:
Will the others follow?
One thing is for certain this will only help keep the market house prices proped up...........unfortunately for a little longer.
The CBA doesnt give a flying toss about its borrowers..They are just interested in ensuring loans are serviced in some capacity and can keep their investors happy.
I guess its a smart business ploy if nothing else and now a very good reason to put to the Govt a valid excuse for not passing along any further full rate cuts!
Which Bank? The shareholders Bank!
Courtesy of the Australian:
HOME owners who lose their jobs will be thrown a lifeline by the nation's biggest mortgage lender, which yesterday announced interest deferrals of up to 12 months to stop customers falling into arrears and triggering a wave of forced sales.
The Commonwealth Bank initiative, announced by chief executive Ralph Norris at a business lunch in Melbourne, follows recent discussions between Wayne Swan and the major banks about measures to assist families hit by the global recession.
With CBA itself predicting last month that the jobless rate could blow out from its current level of 5.2 per cent to a peak of 7 per cent late next year, Mr Norris said that it was not in the bank's interest to see people "get into trouble".
"In the case of those unfortunate to be unemployed, we will provide repayment holidays for six months, and in some circumstances up to 12 months, with interest being capitalised," he said. Mortgage holders will ultimately have to pay the deferred payments, plus interest.
Mr Norris added that he could not rule out job losses at CBA because of deteriorating economic conditions.
Senior banking industry sources said yesterday there had been strong pressure from Canberra in recent weeks to develop hardship packages for customers who fall behind in their home-loan repayments.
While the Treasurer has had discussions with the banks about measures to assist families experiencing hardship, a CBA spokesman denied the bank had responded to pressure from Canberra.
"This initiative has been under consideration since January," he said.
The Government's hand in its dealings with the Big Four banks has been strengthened by the introduction of last October's deposit and wholesale funding guarantees, which have helped stabilise the financial system.
Since then, the Government has intensified pressure to pass on cuts in official interest rates to customers, as well as keep credit flowing to small and medium-sized businesses.
In the meantime, the funding guarantee has enabled the banks to raise $60 billion in offshore debt markets for on-lending to their customers, at a time when investor appetite for non-government guaranteed debt has evaporated as a result of a wave of bank failures.
The major banks, however, have had to pay the federal Government more than $400 million in fees to rent its AAA sovereign debt rating.
Asked by The Australian yesterday if the guarantees had given the Government a mandate to bash the banks at will, Mr Norris said: "I don't think the Government needs to bash the banks at any time."
The CBA chief said the deposit guarantee had been put in place to stabilise the banking system.
The major banks, he said, had not needed a deposit guarantee.
Furthermore, unlike the billions spent offshore to prop up banks and banking systems, domestic lenders had not received a single taxpayer dollar.
"And I don't think any dollars of taxpayer money will be used," Mr Norris said.
"Likewise with the wholesale guarantee, the banks are actually paying for the guarantee, and it's hard, again, to see the Government having to front up taxpayer dollars to honour those guarantees."
Housing Industry Association chief executive Chris Lamont praised the initiative.
"I think it will provide a welcome safety net for Australian families and Australians who may do it tough over the next 12 to 18 months," he said.
But one banker warned yesterday that capitalising home loan interest payments for the newly unemployed could actually lead to a worse outcome if the borrower was unable to find a job.
Christopher Zinn, a spokesman for consumer association Choice, was also cautious.
"Increased flexibility will help, and for some people it will work," he said.
"But given the circumstances, people will need to make realistic decisions."
While all the major banks have assistance options for customers, CBA is the first to specifically respond to circumstances created by the financial crisis.
ANZ chief executive Australia Brian Hartzer said hardship options included "short-term repayment holidays where interest is capitalised".
"We have clear policies on supporting customers facing hardship and are continuing to look at ways we can expand those," he said.
A National Australia Bank spokesman pointed to similar policies for customers experiencing changed circumstances, including job losses.
A spokesman for Westpac said the bank already offered deferred payments for customers experiencing hardship if it was "in their interests".
"We look at this issue on a case-by-case basis," he said.
Consumer Credit Legal Service co-ordinator Karen Cox said it was "absolutely vital" that banks were willing to be flexible about hardship arrangements in the current economic climate.
"I think the flexibility is fantastic," Ms Cox said.
"We've been lobbying for improvements in the law for exactly that reason."
But she warned that consumers needed to be aware that because the interest was capitalised, they could reach a situation where they owed more than the house was worth.
"As with anything there are consequences, and here the danger is negative equity, especially where property prices are falling," she said. "So people do need to get advice."
