Edition 52, November/December 2007

MFAA moves to deter predatory mortgage lending

The Mortgage and Finance Association of Australia (MFAA), the mortgage industry's peak professional body, has changed its code of practice to deal with predatory lending practices that target people having little or no capacity to meet repayments.

This comes at a time of rising mortgage stress, and as the mortgage industry itself is calling for national regulation.

As part of an ethical revamp, the Association now requires its 13,000 members to only deal with credit providers that are members of a scheme approved by the corporate regulator, the Australian Securities and Investments Commission (ASIC).

A common practice of predatory lending is for the borrower to be induced into signing a declaration that the loan is for business purposes, taking away the protection to the borrower under the Uniform Consumer Credit Code provisions of ASIC regulation.

MFAA chief executive Phil Naylor says any MFAA member breaching the code would face serious disciplinary action by the MFAA Tribunal. He believes the current mortgage stress facing consumers strengthens the case for national regulation of the mortgage industry.

For more information, visit the Mortgage and Finance Association of Australia at www.mfaa.com.au

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