This report examines home loan lending practices and the processes used to deal with people in financial difficulty. The committee’s key recommendation is that the federal government takes over the regulation of credit from the states and territories. This includes the regulation of mortgage brokers and non-bank lenders.

The committee also examined the evolution of the Australian lending market, including the change to lending standards and the proliferation of non-bank lenders. Generally speaking, credit has become more readily available, reflecting the ongoing strength of the domestic and international economies. Mortgage arrears rates have increased in recent times, but remain very low by historical and international standards, suggesting that the majority of housing credit is being provided responsibly.

The committee also recommends that the Australian Bureau of Statistics begin collecting data on housing repossessions; and that the Banking and Financial Services Ombudsman increase its scheme limit to $500,000.

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