Home loan help for hard-up Australians

Prime minister Kevin Rudd has unveiled a new plan that will allow Australians to ask their bank for leniency on home loan payments on the grounds of financial hardship.

The new support will be made available to all those with home loans of up to $500,000 and will be backed up by free legal representation for those who want to fight their cause if their bank decides not to change their home loan payment terms.

Superannuation and corporate law minister Nick Sherry said that the scheme is currently only available to those with a home loan of $312,400 or less, leaving many city residents high and dry.

"If homeowners find themselves in financial hardship they will be able to request help. That might be a change to certain terms of their credit contract on the grounds of hardship or a postponement of enforcement proceeding," he said.

The government also last week struck a deal with the big four home loan lenders setting out guidelines for helping hard-up consumers.

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