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ISCOVER
Staff Reporter
RE/MAX Western Australia managing director Geoff Baldwin has welcomed ASIC’s NCCP clarification.
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Last month, Mr Baldwin slammed ASIC for imposing legislation that discriminated against older borrowers.
"In its original form the Act implied that older borrows would be restricted in the borrowing capacity according to the time between their current age and likely retirement age whereby a person aged say 55 would be restricted to a 10 year term unless they could prove their ability to pay an owner occupier property off through other means", Mr Baldwin said.
"The implied ‘responsible lending’ terms of the Act had the affect of discriminating against older borrowers and did not take into account the capital growth and equity gain which would improve the financial standing of those home buyers rather than putting them into a negative situation.”
Mr Baldwin applauded the corporate regulator for responding to industry concerns and said the clarification now empowered lenders to make informed decisions and judgments as to the borrowers capacity to either pay the loan out at retirement age, to sell and downsize or to pursue any other financially viable plan that is not likely to cause hardship when that time comes.
"My original concerns were echoed by hundreds of finance brokers, real estate agents and other parties and had also become a significant barrier in the decisions of lenders when considering loan applications from older borrowers,” Mr Baldwin said.
“It would be generally considered that older borrowers would gained more knowledge, experience and common sense to decide whether they are capable of planning their finances for retirement rather than being inflicted with discriminatory Government barriers so these clarifications are very much welcomed.”
