Page 871 - Week 06 - Tuesday, 25 July 1989
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hope that the interest rates will not go beyond their purse, and that is just a simple gamble. Many mortgages these days do not contain a provision relating to the mortgage interest rate. They do not have on their face the mortgage rate.
Mortgages prepared by cooperative societies rarely contain the mortgage rate on their face. You sign a mortgage, and the interest rate is set from time to time under the rules of the society. There are good reasons why this Government in the ACT should be examining all the fine print, all the legalities of those situations, because courts normally construe mortgage documentation strictly, and strictly very often in favour of the borrower where the terms of the mortgage are ambiguous or unclear.
I enjoin the Labor Government - the two remaining members in the chamber at the moment during this important debate - here today to look very carefully at using the legal skills available to it to provide good counselling advice to persons who are receiving notices from banks as to interest rate hikes. In justice and fairness to the banks, there are very few foreclosures in the ACT, because banks have a policy of extending terms and working out other measures to ensure that that catastrophe does not visit both the homeowners and, of course, the banks.
I remember once in Paris having a long talk with a great Australian, Wilfred Burchett, about the experiences he had as a young person in Victoria when the State Bank of Victoria set about its foreclosures. They were awful days in Australia, with the bank foreclosures. I recall Mr Burchett telling me of the arrival of persons, in the form of the State Bank of Victoria, in that regard, and of course those persons who conducted those mortgage foreclosures bear that from the 1930s on their conscience.
There is at least one leading Australian in this city who had a prime role in the mortgage foreclosure movement of the State Bank of Victoria. That person went on to become a very great Australian and a great public servant, but I well recall that name being mentioned to me as one of the clerks involved during the mortgage foreclosure campaign in the 1930s in Victoria.
The fact is the banks are there to make a profit. They are doing their best at the moment to bring money on market and add a minimal margin, consistent with their own operations, and that is another factor that we need to look at. We need to ask the banks whether they need the splendiferous premises that they are building around this country and whether the administrative overheads that add the extra points in their loans over and above that at which they bring the money on the market really achieve the best deal for the mortgage borrowers.
We know that the home mortgage market is now a relatively small component of overall banking. In the overall banking
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