Prime Minister Kevin Rudd is set to ease the burden for households hit by the financial crisis, by providing help with their mortgages.
The measure, to be unveiled today, will allow people with mortgages of up to $500,000 to legally request changes to the terms of their credit contract, making it easier for mortgage holders to negotiate changes to loan repayments if they have lost their jobs.
Borrowers will also be guaranteed fee-free legal representation through the Financial Ombudsman Service if they are refused credit by their lenders.
Superannuation and Corporate Law Minister Nick Sherry said the measure will provide much needed relief to struggling homeowners.
“Front and centre of our national consumer credit protection regime will be a dramatic increase in the monetary thresholds under which consumers can get help if they are struggling with a mortgage.”
The current threshold for homeowners is set at $312,400, but Senator Sherry said that it excludes those homeowners in capital cities where property prices are higher than their counterparts.
“We don’t believe that either the current amount or the way it’s calculated is in the best interests of hard-working families, so we’re increasing the threshold to $500,000. We’re also putting in place a new, simple and clear way of adjusting the threshold upwards in future, if we need to.”
The measure follows on from a scheme announced last month by the Government which will see jobless Australians eligible for mortgage relief for up to a year, with the four big banks NAB, Westpac, the Commonwealth and ANZ agreeing to postpone loan repayments for up to 12 months.
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