APRA warns banks over home loans
Article by Mozo
The Australian Prudential Regulation Authority (APRA) has warned banks not to turn a blind eye to home loan customers who are receiving hardship concessions.
In some cases, homeowners who are struggling financially can receive special dispensation on their mortgage payments until they are back on their feet.
This can come in the form of reduced interest rates, a temporary reduction in the repayment amount or an extension of the loan maturity.
It is clear that Aussies are constantly trying to find ways to lower their mortgage commitments, as figures released by the Australian Bureau of Statistics recently showed that the number of people refinancing their loans has soared, the Sydney Morning Herald reports.
However, APRA chiefs have revealed that some banks are turning a blind eye to missed payments in order to avoid collection processes and this is distorting home loan figures on a national scale.
"While this practice may be reasonable from an operational perspective, it can obscure prudent internal and regulatory reporting of past-due and impaired loans," a spokesperson for the body wrote.
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