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.