Govt gives mortgage competition welcome boost

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The Mortgage and Finance Association of Australia (MFAA) today welcomed the announcement that the Government will boost competition in the country’s mortgage market by investing in triple-A rated mortgage-backed securities.

“The MFAA has been campaigning for the Federal Government to ease the pressure on the lending market by offering securitised funding sources for lenders for about six months. The government purchase of mortgage-backed securities will certainly help to free up some liquidity in the market,” said Phil Naylor, CEO of the MFAA.

“A competitive lending market is vital to make sure consumers get the best variety of products, the best service and the lowest interest rates.

“The lack of available credit at the moment has severely impacted non-bank lenders in particular, because they don’t take deposits from their customers like the banks do.

“If this initiative is made available to all lenders in the market, the Government will be showing that it is committed to keeping competition alive,” said Mr Naylor.

The Treasurer Wayne Swan announced late this afternoon that the government will direct the Australian Office of Asset Management to invest in triple-A rated mortgage-backed securities.

“We look forward to working with the Government to implement this initiative,” said Mr Naylor.

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1 COMMENT

  1. I just commented on a similar story

    http://www.lendingcentral.com/2008/09/29/is-the-nightmare-over-cautious-optimism-about-swans-4bln-proposal/#comment-431

    My concern is still the same. Conforming Mortgage Brokers are having more and more trouble placing their nonconforming clients in suitable products.

    We are run off our feet at the moment with enquiry from non-conforming clients. These are regular Muims and Dads that have been knocked around by the up and down nature of the interest rates.
    The loss of a job, additions to the family and a host of other real and valid reasons, all come together to make it much harder for Good, hard working Brokers to find solutions for their valued clients. We help as many of these brokers as we can but we are now finding it hard to get the staffing we need to keep up.

    Good Brokers that understand the non conforming mortgage market are actually very hard to find and with more clients than we can handle, we even have to be choosy about taking on new brokers.

    This all amounts to the fact that there are a lot of good clients out there that are really hurting.
    I just hope that when the cheques are passed around that the Federal Government does not forget about thier roots, dont forget the Mums and Dads and Pensioners that are really feeling it at the moment.

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