by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
MFAA Prosper : Mortgage and Finance Brief 07
McCarthy cites a current case, a man in his late 50s who lost his income through a work-related injury. "Work-cover is less than his income; he has lost his overtime and other benefits, and his chances of getting another job, or retu rning to his old job, are very slim. But he's still got a lot of that mortgage left to pay." She suggests that brokers thoroughly assess their client's ability to ser vice a loan, talk through future options in case of changed circumstances with their clients up-front, look for products that have some flexibility for future adjustment and make their clients aware of the facilities available for money management. "A financial counsellor can help someone before they take out a loan, by doing a thorough money plan with them. We take into account everything: private school fees, extra expenses for children with special needs, mobile phones -- the sorts of things that don't come up in a regular application for finance." Insuring their future Craig MacKenzie, Head of Corporate Affairs and General Cou nsel at Genworth Financial says the earlier financial hardship is addressed the more likely it is that it can be resolved. MacKenzie says, "those early days of potential financial hardship are exactly when borrowers should be getting in touch with their lender so a solution can be worked out as soon as possible." Drawing from inter national best practice, Genworth introduced a Hardship Solutions program to the Australian market five years ago. The program focuses on supporting lenders working on repayment solutions for bor rowers who are experiencing short- ter m financial hardship. Since the introduction of the program in 2006, Genworth has assisted over 15,000 bor rowers experiencing financial difficulties, with over 95% of hardship applications approved. The program has been remarkably successful, MacKen zie adds. "Most borrowers experience a short-term setback of three to six months, although in some cases, the period is longer. 85% of people assisted through the Genworth Hardship Solutions program resume regular repayments once they have been through the program." According to the Genworth Streets Ahead: Genworth Homebuyer Confidence Index, 57% of hardship applications are due to u nemployment or underemployment while arou nd 20% are due to illness or injury. Other causes of hardship include over- exposure to debt, interest rate rises and relationship breakdow n. Ian Graham, CEO of QBE LMI, says that bor rowers need to enter the market for the right reasons and ensure they don't overextend themselves, as they will be at a greater risk of default if there is an adverse change in their financial circumstances, including a loss of income due to unemployment. "Although unemployment rates are at reasonably low levels across Australia, hardship requests often reflect a cutback in working hours and overtime," says Graham. "It is important that borrowers appreciate that lenders will try to help if their income is temporarily inter rupted. The QBE LMI Home Ow nership Preser vation team works closely with lender customers to provide support to insured bor rowers who are under genuine mortgage stress." Graham says the QBE LMI team helped 57% of hardship applications are due to unemployment or underemployment* “A financial counsellor can help someone before they take out a loan, by doing a thorough money plan with them.” Indepth
Mortgage and Finance Brief 06
Mortgage and Finance Brief 08