Contact: Louise Denver
Deloitte
Financial Services Media Relations
+61 (0) 2 9322 7615

Contact: Graham Mott
Deloitte
Partner - Securitisation
+61 (0) 2 9322 7970

Professional services firm Deloitte, a leading securitisation adviser to the non banking sector, who yesterday issued an independent assessment of the 26 public submissions in the Home Loan lending inquiry, today welcomed on behalf of the non banking sector the overall finding that credit standards in Australia have not declined.

“All sectors of the industry had a chance to input into the inquiry and the subsequent roundtable. So this is a very good outcome,” Graham Mott, Deloitte Securitisation practice leader said.

“Deloitte believes if the data collection is done correctly and flows through to the source of the problem this should put to rest some of the myths out there in the market.

"Particularly the myth that repossessions mean the industry is engaging in predatory lending as well as the myth, that increased arrears and enforcement levels mean poorer credit standards.”

“They don’t,” said Mott.

“The management of arrears is a complex matter.”

The lack of disaggregated data means it is very hard to determine the reasons behind consumers filing for bankruptcy or the numbers of consumers who sell the property themselves to clear the mortgage as opposed to being a mortgagee in possession.

“It is our considered view that credit standards have not fallen in this country.

"They have in fact broadened to encompass the burgeoning group of successfully self employed Australian business that are the engine room of the Middle Market.

“Without the non-bank lenders and the reputable brokers like Aussie, Wizard and so on, this now growing sector would not have been able to gain the leverage that has helped drive the booming Australian economy.

"The West is a particularly potent example of this entrepreneurial powerhouse."

RBA statistics show in fact that there are just over five million home loans in Australia of which less than 12,000 are more than 90 days in arrears, representing an arrears rate of about a quarter of a per cent or so. Prime full doc loans make up the majority of these arrears.

Please click on the attachment below for the full media release