Media Release issued 09.03.04

OMBUDSMAN URGES EARLY ACTION TO STOP MORTGAGE DEBT SPIRAL

If you are a homeowner having difficulty meeting your mortgage repayments because of recent interest rate rises, call your financial services provider straight away. Early intervention is the best way to stop a downward debt spiral.

This advice comes today from the National Ombudsman for the Financial Co-operative Dispute Resolution Scheme (FCDRS), Jan Taylor, who is handling an increasing number of complaints relating to mortgage repayments.

Since December last year, the number of calls to the FCDRS about mortgage repayments has increased by 7.5 percent. The latest interest rate rises in November and December 2003 added an average $35 per month to mortgage repayments, although for many young couples the increase is significantly higher.

"Many people who are having problems meeting their increased repayments are just too embarrassed to talk to their financial services provider about extending their loan or finding another solution to ease the financial pressure," Ms Taylor said. "They believe they can tough it out and catch up with their repayments later. Unfortunately, this is rarely the right approach."

Ms Taylor said the latest interest rate rises coincided with what is generally an expensive time of the year.

"The expenses associated with Christmas, holidays and back-to-school can be enormous for many families - and they simply cannot find even more money for mortgage repayments. However, there are financial options available if you address the problem early.

"Make an appointment to go to see your financial services provider as soon as you can. Don't ignore letters or telephone calls or wait until your financial situation is critical when your choice of options is very limited.

"There is no need to feel that you are a financial failure. Every day, your financial services provider helps customers to cope with circumstances beyond their control."

Ms Taylor said her advice was also targeted at people who find themselves out of work or facing unexpected major bills, and are suddenly unable to keep up with loan or mortgage repayments.


To contact the FCDRS

  • Call 1300 139 220 for the cost of a local call.
  • Write to the Ombudsman at the FCDRS, PO Box 372 Clayfield Qld 4011.
  • Email to ombudsman@fcdrs.org.au or download a dispute form from www.fcdrs.org.au
    and return it by fax 1300 139 221.

FOR MEDIA ENQUIRIES ONLY:
Call Jan Taylor on 1300139 220 or 07 3862 3455