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02:09:46 pm

Australian Home Loans Rise On Record-low Rates

Approvals to buy new homes rose 5.9%, while lending for already built houses rose 2.7% in the month. -Write to James Glynn at (END) Dow Jones Newswires 09-08-132148ET Copyright (c) 2013 united states Dow Jones & Company, Inc. This article appears in: Interactive Charts Default Setting Please note that once you make your selection, it will apply to all future visits to If, at any time, you are interested in reverting to our default settings, please select Default Setting above. If you have any questions or encounter any issues in changing your default settings, please email . Please confirm your selection: You have selected to change your default setting for the Quote Search. This will now be your default target page; unless you change your configuration again, or you delete your cookies.
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The Australian Democrats 'jump the gun' on low doc loans

Australian Democrats housing spokesman David Collyer recently called for a Royal Commission into the Australian mortgage finance industry after evidence was given to the Senate Economics Committee on low doc loans. The committee was told borrower incomes and assets were regularly and systematically inflated to make loans appear appropriate and repayable when they were not. "Apart from confusing 'low doc' with 'sub-prime', the spokesperson has jumped the gun," Naylor said. While he supports the Senate inquiry, he said that a Royal Commission is not necessary because, for one to be called, "there would have to be massive evidence of systematic low doc fraud". "In our view and on the experience of our members who in the main are mortgage brokers (and comprise about 75 per cent of all mortgage brokers) there is no evidence of this," he said. Naylor said he believes the arrears rate for low doc loans has not performed "materially differently to prime loans", albeit at a rate which is slightly higher due to the greater risk associated with the low doc loans. "Had there been massive fraud it would be reasonable to expect the arrears rate to be going through the roof, and it is not," he said. According to Collyer, of the $14 billion worth of residential mortgage backed securities (RMBS) acquired by the Government since the global financial crisis (GFC), 10 per cent of these might be low doc loans.
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