Prime Minister Kevin Rudd announced yesterday 12 months of mortgage relief for the unemployed.
For the first time ever Australia's major banks have got together to help prevent struggling families from losing their homes.
The Sunday Telegraph has reported that the Commonwealth, National Australia Bank, Westpac and ANZ banks will place a freeze on mortgage payments in needy cases as part of a comprehensive package of assistance for workers who have lost their jobs.
Mr. Rudd made the announcement at a community employment forum in Melbourne to an audience of about 150 people, some of who had recently been retrenched. The Prime Minister stated in his speech that the stress of paying mortgage and car repayments for many families whose breadwinners had lost their jobs had become a major concern, and that was why he had asked the treasurer to negotiate an agreement with the four major banks, to come up with a comprehensive package, to assist workers who have lost their jobs.
Mr. Rudd further added that the move would provide a better handling, for borrowers in need through job loss, and that the banks would postpone mortgage payments for up to 12 months, with the interest to be capitalized into the loan.
The banks were also considering extending the period of the mortgage agreement and reducing payment amounts. Banks were also considering interest-only repayment options on other loans, such as car loans. As an added lifeline the banks would also consider waiving fees in hardship cases.
These options would only be appropriate in some cases, and the banks would, make assessments based on the borrowers capability to meet the new contracts terms.
The Government's purpose in these negotiations was to ask the banks to provide maximum flexibility for borrowers suffering temporary hardship, through enforced unemployment for the 12 months ahead. The Government was unfortunately not able to explain when these measures would be put into place and exactly who would be affected.