Non-recourse lending needed urgently to curb banks
Plummeting house prices has KAP Leader and Federal Member for Kennedy Bob Katter slamming the banks saying it’s time we stepped in line with other countries and introduced non-recourse lending to prevent further torture to homeowners while the banks take a free ride, using their power to “drive over the top of us” and “crush us at their whim”.
Currently, Australia has recourse lending, while America (and most other countries) have non-recourse lending, which means the bank can only get the house back; they can’t get the debt back.
“The borrower pays off $100k on their $500k house, he’s behind on his repayments, the bank sells it up for $300k, they get a tax write off of $100k, they have an insurance loan guarantee that pays off the other $100k. Meanwhile, the poor old once proud homeowner now has no house, has lost $100k and is $200k in debt – he’s a debt slave for the rest of his life,” Mr Katter said.
“Undoubtedly we’d be one of three or four key players in securing the banking enquiry – we never made a call for it without reference to the overheated housing market.
“There is an impending disaster – the average price of a house in Sydney, Newcastle and Wollongong is $800,000 and the average take home pay for a couple is around $80,000 – how are you going to service that debt?
“KAP policy says that Australia must get in step with other countries. The bank knows better than a 23-year-old newly married apprentice and whether he and his wife can afford to pay $1000pw.
“It may be argued the bank is more culpable than the borrower – in America there is non-recourse lending where the banks, as they should, share the loss.
“Further, I am scared silly that the ALP actually intends to abolish negative gearing, people buying houses for investment will leave the market and housing prices will collapse even further, and I want people to know cold bloodedly there is a crashing down of housing values that will be precipitated if Labor proceeds with extraordinarily irresponsible action,” Mr Katter said.
Happy Xmas All !!
interesting articles – Wolf Street by Wolf Richter.
* It’s Happening: San Francisco House & Condo Prices Fall
* Why California’s Housing Market is in for Serious Trouble
* Bubble Trouble: Silicon Valley & San Francisco Housing Market Head South
* Update on Housing Bust in Sydney & Melbourne, Australia.
Negative Gearing is Australian Taxpayer Money being used to pay off the property investments of the SUPER RICH.
Greedy bastards can’t bare to part with a cent to pay their way -it is superfund monies that will be hit with the BILL here & not the RICH BLEEDING HEART.
Long overdue that Australia cleaned out the filth from the housing market, we even have elected politicians with multiple rented houses, preventing our young families from owning the “Family Home”, driving up the market,? while they wallow in riches, like Scrooge Mc Duck. The “Family Home should be sacrosanct and “wealthy investors”, should be paying their stinky way. The little carton you featured about our former Prime Minister, says it very clearly, “A big drip, offering a small drip to needy farmers.” This obscene greedy mentality seems to have somehow slid into Australian politics and the wealthy in our community thrive, to the extreme detriment to the “Australian Way”. Like a cancer it is destroying all that our finest men and women fought two horrendous wars for, and now we are about to slide into another mirk of filth, just like the Middle East. I am not a Banker, so how to “clean up the market ” ? is not my specialty, I am only an injured ex-serviceman who has spent his life raising a family against impossible odds. The Australia I was informed about at school has vanished, WHO IS RESPONSIBLE.?? Who should be “Shot at dawn” for the offence.?? To serve my country, that was the risk, I had to accept. ?