Repossessions-Down 93%
This new data released shows the total value of loans deferred by Australia’s banks is now at least $200 billion.
Whilst I don’t want to be the harbinger of doom by any stretch of the imagination it is clear that there will be a lot of family and businesses that will not survive financially from this crisis. Even before COVID struck we could see an increase in mortgage defaults and asset repossessions
It’s a terrible thing for those families and businesses.
New figures released on the 8th September 2020 shows Australia’s banks have deferred an extra 100,000 loans, including approximately 50,000 home loans, over the last week to help customers through the COVID-19 pandemic.
The total number of loans deferred is now at least 643,000.
This new data released shows the total value of loans deferred by Australia’s banks is now at least $200 billion.
When you’ve got the doom and gloom of COVID, obviously the housing and car markets are going to suffer in the long term— with so many people out of work, it was always going to lower confidence.
When properties & assets are repossessed by lenders, word tends to get out to the market place that the asset is a repossession and it does drop the price. The more repossessions you have the bigger the effect will be.
As we come out of this crisis I do not see financial intuitions making any massive move to repossess assets unless absolutely necessary. Instead, we see it as will be a more methodical & measured approach with field calls to make contact with customers to encourage them to speak with the institution directly to update their situations and attempt to work with customers to get them through their financial hardship.
Repossessions- The toll
Dealing with customers in repossession situations is always going to be difficult. Anyone that worked throughout the late 80s early 90s will remember the emotion and stress was often too much for people, especially in property repossessions. They simply walked away.
In the coming months, we see our field agents having to deal with a large number of emotional and financially shattered people.
Getting through
To help SWA’s team navigate the next 12 months we will be heavily focused on our team’s training on empathy and understanding. This will include watching for underling triggers for hardship, self-harm, and suicide.
Not to mention our own team’s mental health. They will be often the first human face customers will see regarding their loans. They will need to be able to deal with these customs and difficult situations on a daily bases. At SWA we a fortunate enough to have our inhouse psychologist that our team can discuss these issues.
The job
Whilst we will have a job to do there is no reason why repossessions cannot be conducted without compassion and understanding. We feel it will serve clients and customers well, in what will be an often stressful and sad circumstance for a lot of people.
Positives
One of the changes we have noticed is the number of people paying their arrears or making settlement offers on their accounts. The government stimulus and changes to access to super have allowed people to reassess their finances. Top this with people being more likely to either work from home and not take holidays has changed people’s focus on paying down debt with their disposable income.
The future
Whilst there is a lot of talk about the coming repossession tsunami, we trust for everyone’s sake that it doesn’t occur as some have predicted. Instead, a slower calmer approach as it will have important and far-ranging effects across housing, finance, and motor trades.
