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August 2007

10/11/2007 06:08 PM

Archive Aug 07 more info..

29/08/2007 06:00 PM

Is fixing the answer more info..

John Kavanagh in SMH writes Australian home loan borrowers over the years have expressed an overwhelming preference for variable rates, which have tended to be lower than fixed rates. This is not always the case. Last year, fixed rates dipped below variable rates and borrowers responded by shifting their preference. Are we changing the way we borrow to buy a home?

29/08/2007 04:03 PM

Exit Stage Fright! more info..

Many borrowers are unaware of the substantial exit or deferred establishment fees that apply to loans for up to 5 years with some lenders. Fujitsu Consulting found that while less than 40 per cent of home loan products now have any upfront fee, all of them have some type of exit fee. These fees aren't in the comparison rate and it's often the lowest rate loans that come with the hefites fees. Story by Lesley Parker - SMH

30/08/2007 02:57 PM

Sub prime causing cash crises in Europe more info..

AAP reports that the European Central Bank lent out 50 billion euros for 91 days, but with banks bidding for a total of 119.75 billion euros, strong demand pushed up the cost. Cheyne Finance Plc, a structured investment vehicle (SIV) managed by British hedge fund Cheyne Capital Management, said it was seeking to restructure after being forced to start selling assets to pay down debt. British bank Barclays, hit by worries over its exposure to highly leveraged debt vehicles, holds collateral that would limit losses to 75 million pounds

31/08/2007 10:59 AM

ANZ says non-RBA rate rise likely more info..

ANZ chief John McFarlane stated yesterday that historical cash rate premium of 0.1 per cent has now increased to 0.35 per cent over the last 4 weeks. "In the near-term, unusually high rates on bill funding is pressuring mortgage margins by up to 25 basis points," Mr McFarlane said. George Lekakis in the Herald Sun reports that McFarlane said: "Banks can't sit back and swallow a 25 basis-point rise in the cost of funds, particularly in the broker market.

31/08/2007 10:18 AM

CBA pumps up low doc loans more info..

In a sign that credit wobbles won't stand in the way of longer range objectives Commonwealth Bank has this week revealed an aggressive stance on low doc loans.
CBA will also extend, rather than reduce, the now ubiquitous “discount" of the advertised interest rate of home loans. The key changes are: an applicant for a low doc loan need only have been self-employed for one year (down from two, though an ABN and a record in the Australian Business Register are required)

01/09/2007 12:43 PM

CBA and NAB predict stable rates more info..

The Herald Sun on Saturday reported that NAB CEO Ahmed Fahour believes waning investor support for securitised mortgages means that some non-banks are facing a blowout in funding costs. As a result the traditional banks will emerge stronger and bigger than ever. Meanwhile Michael Cant, the head of retail products at Commonwealth Bank, says his bank is the least dependent on wholesale funding because of its huge deposits base. "We have no plans to increase rates right now," he says.

03/09/2007 12:36 PM

Sydney weekend sales sluggish more info..

The spring property sale season got off to a sluggish start this weekend in Sydney. It appears that APEC, the coming election and rate rises are cooling the market. The auction market in Melbourne was strong with 80% clearance however outer suburb houses are not moving. Report by Maurice Dunlevy in The Australian

03/09/2007 12:34 PM

Customer satisfaction is a measure of indifference more info..

Bankers on a panel at a conference in Sydney last week were asked what value they got from customer satisfaction surveys, two of which had just been released. No one on the panel, which included National Australia Bank executive general manager of business and private banking George Frazis and Kiwibank group executive Sam Knowles, could say with any confidence that improved customer satisfaction correlated with increased revenue, market share, share of wallet or customer numbers. Banks have taken to customer surveys with a vengeance. It is rare to see a financial report that does not provide an update on the latest satisfaction ratings. Banks want to be known for providing “a superior customer experience" and they track their performance closely. But ask them what benefit they and their shareholders actually derive from having satisfied customers and they find it hard to tell you.

04/09/2007 02:54 PM

Renters Alarmed not alert more info..

Mark Schliebs in news.com.u reports that Aussie renters feel they are getting a raw deal with only 11 per cent happy with their current accommodation. While "high rental prices are making it impossible for prospective first home buyers to save enough money to think about buying a house."

04/09/2007 02:58 PM

Xmas spending might force RBA's hand more info..

Denis Orrock, the general manager of infochoice.com.au says,"If the market keeps growing and consumer spending continues unabated, the (RBA) will have no option but to give us a nasty Christmas present," . The latest RP Data-Rismark Hedonic Index results show that the Australian residential property market has experienced strong growth this year, with overall property prices growing by an impressive 6.6 per cent. - story by Nicki Bourlioufas NEWS.com.au

05/09/2007 10:25 AM

RBA Rates unchanged -- more info..

The reserve bank has left the cash rate at 6.5 per cent following yesterday's meeting. This was widely expected despite continued very strong growth for the GDP at 4.3 per cent year to June. It appears that any rate rise would now have to wait until September quarter figures which come out in October and would result in a possible rise in November - potentially right smack in middle of the federal election. Nicki Bourlioufas - News.com.au

29/08/2007 05:49 PM

Option2 Buy - O2B - or not to be more info..

New niche lender Option2Buy or O2B has been criticised by the Mortgage Finance Association (MFAA ) and consumer advocate Choice over their proposed scheme which appears to be a variation on Rent to Buy. Hitting back, O2B chief executive Michael Scott said the criticisms were based around a misconception of the product. "We're very different to those types of schemes," Scott explained. "The consumer enters a sales contract so they are purchasing the home from day one. All we're doing is delaying the settlement."

29/08/2007 05:09 PM

Adelaide increases its low doc rates more info..

From September the 9th Adelaide Bank will increase the rates on its low doc loans across the board by 30 basis points. Tim Piper, chief general manager wholesale mortgages, wrote that “global debt markets have been severely impacted by recent events originating from the sub-prime housing market in the United States. This has impacted on the funding mechanisms of all banks and lending institutions that utilise wholesale markets as part of their funding program. These events are directly adding to the cost of funds being sourced by Adelaide Bank."

29/08/2007 06:20 AM

Banks failing to fix basic problems more info..

In a survey of 26,000 consumers Fujitsu Australia yesterday released results showing that poor service, followed by errors and unfavourable terms and conditions were customers' biggest frustrations. Meanwhile the same banks appear to be spending on initiatives to create a wow! customer experience. Fujitsu Consulting managing director Martin North said more people did not change banks because they doubted that the experience would be any better elsewhere. North said the current focus on customer-facing services - improved branch layouts and higher staff numbers - had resulted in less attention to the back office where the service problems occurred.

27/08/2007 03:12 PM

Firstmac first to break ranks more info..

FirstMac who recently took over the broker loan book of HSBC has increased the rates on all new No Doc loans by 100 base points from 7.89% to 8.89%. In addition they now require asset and liability statements, plus12 months proof of self employment - up from previous one day. They have also withdrawn some of their products which offered competitive no deposit deals

29/08/2007 03:22 PM

GDP may be impacted by construction slowdown more info..

The ABS have released figures today that show construction work fell by 1.9 per cent in the June quarter. This goes against the median market forecast which was set at 2 per cent. Grange Securities research director Stephen Roberts said "This run of quarterly data ahead of the GDP data next Tuesday is looking slightly on the low side and may mean there is a need to trim back estimates of Q2 GDP."

29/08/2007 01:30 PM

NAB chief warns of non RBA rate hikes more info..

John Stewart CEO of NAB warned yesterday that mortgage rates may rise irrespective of the Reserve Bank's actions. George Lekakis reports that Stewart said ""Right now it's having next to no effect on the big banks other than, we borrow a lot from wholesale international markets. Those markets are very illiquid just now and therefore the reaction has been that the price (of funding) has gone up. Right now, the banks are wearing that, so they are taking the cost. " - Reserve Bank Deputy Governor Ric Battellino observed that lenders relying on wholesale funding were most vulnerable to the liquidity squeeze.

29/08/2007 01:24 PM

New home sales showing marginal growth more info..

The Housing Industry Association new home sales report reveals a 1.5 per cent rise in July. Unit sales rose by 13.5 per cent and detached houses down by 0.1 per cent. HIA chief economist Harley Dale said a recovery in the home building industry remains some distance off. Meanwhile renters won't see any improvement in affordability until there is a significant improvement in supply.

29/08/2007 10:49 AM

Average spending over 36 per cent income on mortgage more info..

The Home Loan Affordability Report for the June quarter reveals that an average of 36.2 per cent of household income is required to meet the average home loan repayment, with NSW running at 38.5 per cent. It also reveals that affordability has dropped by 8.3 per cent over the previous year.

28/08/2007 10:00 AM

RAMS reports that profit in line with forecast more info..

While RAMS continues to monitor the impact of he US sub prime crises the 06/07 profit report is 49 per cent up on the previous year. The RAMS exposure in the US is on two commercial paper programs totalling $6.17 billion which they are unable to effect a rollover on. They now have 180 days to refinance and the cost of this refinance is the key to the impact on their bottom line for 07/08

28/08/2007 09:59 AM

Subprime bigger threat than terror more info..

The US subprime mortgage crises with its risk of massive defaults is now rated by the National Association for Business Economics in USA as the biggest short-term threat to the US economy. This was based on a recent survey of 258 NABE members. Despite this most members are upbeat about the long term outlook.

27/08/2007 02:28 PM

Australian non conforming loan delinquencies on the rise. more info..

Despite Moody's assertion that the overall level of defaults and personal bankruptcy is still relatively low, they have also found that the delinquency rate in the non conforming sector is now at a record high. "While non-conforming loans are the nearest thing in Australia to sub-prime loans, it is evident that Australian borrowers are not experiencing the stress seen in the US."

27/08/2007 02:23 PM

Fear that London prices may fall more info..

With prices in the prime areas of London having increased 50% over the last two years, fears are now rising that the US Sub Prime turmoil may cause a repeat of the 02/03 downturn, with some realtors comparing the sentiment to August 98. - Chris Giles in London reports.

27/08/2007 02:08 PM

Big fines being proposed on bad brokers more info..

Brokers selling loans to clients that they can't afford - may face fines of $10,000 if new laws are enacted. People in this trade also have to tell customers the commissions they are being paid and who they work for - a requirement that also applies in New South Wales, Victoria and the ACT.

27/08/2007 02:02 PM

We may not have seen the worst of the Sub-Prime fallout more info..

In a recent report from the New York Times the fallout of the US sub-prime sector is only going to see more defaults as the honeymoon periods on adjustable rate mortgages come to maturity. According to Credit Suisse the crunch in terms of defaults will arrive in October when the rate on $50billion USD loans will increase

21/08/2007 01:03 PM

RBA aren't dismissing another rate rise more info..

RBA Governor Glenn Stevens stated to the federal parliamentary economics committee that another rise is well and truly on the cards within the next 6 months - InfoChoice.com.au

20/08/2007 11:56 AM

NSW accuses Costello of distracting Federal failure on rates more info..

The Herald Sun reports NSW Premier Morris Iemma has accused Federal Treasurer Peter Costello of trying to divert attention from the Federal Government's broken promises on interest rates. He said NSW led the way in introducing tighter controls on the growing finance broking industry. “This is just another attempt by the Federal Government to distract attention from its broken promise on interest rates," Mr Iemma said.

20/08/2007 11:53 AM

Costello calls for national control on brokers more info..

MORTGAGE brokers have welcomed a push by the Federal Government to crack down on dodgy players in their industry after Treasurer Peter Costello attacked the states for delaying stricter regulation of the sector. Reports Annabel Stafford and Marc Moncrieff in The Age

20/08/2007 10:47 AM

Despite rate rise buyers are back with a rush more info..

Weekend clearance rates close to levels not seen since the housing boom of 2003 according to Maurice Dunlevy and Turi Condon of The Australian. On Saturday, 69 per cent of Sydney homes offered at auction were sold, Melbourne, agents reported a clearance rate of 84 per cent while in Adelaide the clearance rate was 80.4 per cent.

20/08/2007 10:40 AM

Mortgage stress hits home buyers more info..

Buyers in Melbourne's wealthy inner-city suburbs aren't immune as the housing affordability crisis continues to bite. Holly Ife reports that according to Fujitsu Consulting's research of more than 26,000 consumers across Australia, the number of young, growing families experiencing mortgage stress has also more than doubled - up by more than 105 per cent.

17/08/2007 10:43 AM

The storm continues for RAMS more info..

RAMS has no risky sub-prime exposure, but it relies on the evaporating short-term debt market in the US to raise money that it on-lends to Australian home buyers. The company has about 60,000 home loans to borrowers around the nation. RAMS told the stock exchange yesterday that the company's performance was not at fault. -Richard Gluyas The Australian

17/08/2007 09:29 AM

Property Investors face ATO crackdown more info..

The ATO will be cross-referencing over 220 million electronic transactions performed over the last financial year in an effort to clamp down on capital gains tax evasion on both property and share sales. They will also be targeting income reporting from rental and dividends. Read Scott Murdoch's report in News.com.au

15/08/2007 11:29 AM

The Credit Squeeze may take rates out of RBA hands more info..

Australian mortgage rates may be affected by the US credit squeeze forcing rates up regardless of the RBA. John Symond of Aussie Home Loans claimed rates could increase by 0.25%. Jacob Saulwick and Danny John report in the SMH Business Day.

15/08/2007 11:23 AM

The big issue is consumer debt not just mortgage repayments more info..

David Koch writes in the SMH - Many seem to find themselves in mortgage stress because, as well as the 30per cent for home loan repayments, they've dug themselves into deeper financial strife with the extra burden of big consumer debts.. The major department stores and Harvey Norman are making big profits from strong demand for high-end electrical goods.

29/08/2007 10:56 AM

The big issue is consumer debt not just mortgage repayments more info..

22/08/2007 11:48 AM

Brokers the preferred choice of the young more info..

A study from CPA Australia shows that 27% of all surveyed used a broker to source their current mortgage however 50% of the under 35's used a broker. While 55+ year olds are most likely to value a relationship with an existing lender. This is also reflected by the finding that older buyers are less concerned about the rate they pay.are less concerned about the rate they pay.

21/08/2007 01:08 PM

ACCC takes action against ANZ more info..

The ACCC today announced legal action against ANZ price fixing policy whereby they restricted the ability of rebate brokers like Peach Home Loans and others from rebating part of the lenders commission back to the their clients. The SMH reports the ACCC said it was seeking a declaration that ANZ contravened the price-fixing provisions of the Act,

21/08/2007 01:03 PM

RBA aren't dismissing another rate rise more info..

RBA Governor Glenn Stevens stated to the federal parliamentary economics committee that another rise is well and truly on the cards within the next 6 months - InfoChoice.com.au

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