Lenders have made applying for financial assistance so difficult that one-in-three homeowners struggling with mortgage stress give up on the process, the corporate watchdog says. A scathing report from the Australian Securities and Investments Commission says bank and non-bank lenders are failing struggling customers. The number of hardship notices submitted by customers jumped by more than half in the last quarter of 2023, year-on-year.
The leading reasons behind customer hardship notices were over-commitment, followed by reduced income, medical reasons, unemployment and separation. The report also found two-in-five customers who secured support fell into arrears at the end of the assistance period. Vulnerable customers ignored ASIC commissioner Alan Kirkland said lenders’ financial hardship programs were failing to meet borrower needs.