Page 2908 - Week 08 - Wednesday, 24 June 2009
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I think it is a ripper. To describe a 20 per cent requirement for a deposit as onerous is simply fabrication of the worst kind. Are we then to assume that Mr Seselja is urging upon this city’s low and moderate income earners a low-doc, no-doc loan? Does he want them to mortgage themselves to the gills when they need not? In fact, we all know what Mr Seselja thinks, and that is that the sorts of Canberrans targeted by land rent do not deserve to dream of homeownership. They do not get to enjoy the opportunities he enjoys and his colleagues enjoy. They do not qualify for dreams. That is what Mr Seselja thinks. If Mr Seselja has concerns about Community CPS Australia’s lending practices, it is open to him to approach the credit union and discuss those concerns—perhaps in the same letter that he is slapping them on the wrist for not taking out mortgage insurance.
In an information session held at the end of February this year the government advised all those people with land rent blocks on hold of the lender’s likely requirement for a 20 per cent deposit. That is no secret, and any subsequent queries from the public about loan requirements have also included advice about the likely requirement for a 20 per cent deposit. Wouldn’t you know that at no time has any member of the public raised this as being a deal breaking issue for them.
Does Mr Seselja consider it unreasonable that a lender would require evidence of savings history from an applicant for a home loan? Given what we have seen in international markets over the past six months, surely the opposition is not suggesting that 100 per cent finance is preferable to prudent and responsible lending practices.
The land rent scheme is just one of more than 60 initiatives that are part of the ACT affordable housing action plan. Following the announcement of the plan, work commenced to begin implementation of all the initiatives, including land rent. As you could imagine, developing an innovative scheme such as this required considerable work within the departments to ensure that the scheme would achieve its objectives while remaining easy to access for the public.
Prior to the commencement of the scheme, the government consulted with a number of professional and industry groups, including the ACT Law Society, the Australian Property Institute and, of course, with lenders, which included the major banks. As is usually the case with a new initiative, there was some discussion about possible ways that the scheme could be improved. These suggestions were incorporated as much as possible so that at the time of final implementation of the legislation the government was confident that the scheme would be successful.
In particular, the financial institutions that were approached while the scheme was being developed were supportive of it. In fact, the government was approached by one of the major institutions who wanted to be the exclusive lender to offer land rent. Of course, the government could not agree to such an arrangement, but was encouraged by that lender’s enthusiasm for the scheme.
Once the legislation was announced discussions with the lenders continued. Lenders indicated that once the legislation was in place—and I stress that: lenders indicated once the legislation was in place—they could commence their internal due diligence
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