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Bank lobby group the New Zealand Bankers’ Association has hit back at suggestions from property information provider Terralink that mortgagee sales are rising because of a “marked upturn” in the major banks forcing them, saying the total number of mortgagee sales last year was less than 0.2% of the total number of mortgages and there’s “no wholesale move” to sell people out of their homes.
he New Zealand Bankers’ Association revealed today that the number of mortgagee sales was less than 0.2% of the total number of mortgages held by New Zealanders.
In 2011 there were 2263 mortgagee sales, compared to over 1.2 million mortgages. “This is a tiny fraction of total mortgage numbers,” said New Zealand Bankers’ Association chief executive Kirk Hope.
While there were five more mortgagee sales across the country in the first quarter of 2012 compared to the previous peak first quarter of 2010, mortgagee sales have actually declined year on year from 3024 in 2009 to 2263 in 2011.
“It’s important to allay any concerns with a few facts. There is no wholesale move to sell people out of their homes.
“Banks work very hard with customers who find themselves in financial difficulty. People who are having trouble should speak to their bank as soon as possible.
“Banks are responsible lenders. Affordability is something all banks consider when making credit decisions. They ask relevant questions about your circumstances and the possibility of any change to those circumstances. It’s in your interests to be up front with banks so they can best help you meet your needs,” said Hope.
“The benefits to already responsible participants are not at all evident compared to the costs they are being asked to shoulder,” Hope said. While banks could pose a greater structural risk to the economy, Hope said the prudential risks of the sector were already being managed by the Reserve Bank. “At a structural level we’re talking about well regulated entities paying for the regulation of poorly run, failed finance companies.”
New Zealand Bankers’ Association chief executive Kirk Hope said it had no issue with an industry contribution to FMA costs but the levy was disproportionate to the benefits received.
The New Zealand Bankers’ Association today expressed disappointment at the government’s announcement on the way it intends to levy the financial sector to fund the Financial Markets Authority.
“Banks are well-regulated responsible lenders operating at the top end of the market.
“The levies should better reflect the costs and benefits where they actually fall,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“The FMA has an important job to do to crack down on the irresponsible end of the market. The benefits to already responsible participants are not at all evident compared to the costs they are being asked to shoulder,” added Hope.
While homeowners are jumping up and down with excitement over the low mortgage rates, savers aren’t having so much fun. “Balancing the needs and aspirations of borrowers and depositors, within the context of global uncertainty and a very competitive market, provides plenty of challenges for our banks,” Hope says.
Australian and New Zealand Productivity Commissions
Ministry of Consumer Affairs
Prudent management of the public purse is essential to keeping down the cost of credit said the New Zealand Bankers’ Association today in response to Budget 2012.
The Association supported moves to ensure borrowing costs for the government, householders and business owners do not increase unnecessarily. Initiatives that kept the NZ dollar at a realistic value were also important. A lower dollar made New Zealand more globally competitive and supported exports, including the important agricultural sector.
“Balancing the books and moving back to surplus will help our sovereign credit rating, which in turn will keep interest rates down for New Zealand households,” said New Zealand Bankers’ Association chief executive Kirk Hope.
“The credit rating agencies are paying close attention to us. If our credit rating goes down, our interest rates go up. A credit rating downgrade makes us look like a riskier bet to the funders, so it costs us more to source funds.
“The government is in line with households who are paying down their debt. It’s about living within our means. This responsible approach will keep us in good stead with the credit rating agencies.”
The Association was disappointed the Budget did not include more initiatives to lift New Zealand savings.
“We need some good policy thinking around how to improve our savings levels. This is important as it will reduce our reliance on foreign borrowing and provide us with a wider range of options and opportunities for future economic growth,” said Hope.