Login
ISCOVER
ASIC has been urged to lead a regulation and information campaign to make equity release products safer and more popular.
Homesafe Solutions, which is partly owned by Bendigo & Adelaide Bank, told the Financial System Inquiry that “asset-rich but cash-poor” retirees do not have enough options to help them unlock the equity in their home.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
The submission said one of the problems is the NCCP, because its “very narrow regulatory structure” deals only with reverse mortgages and not other equity release products.
Homesafe said a new legislative framework is needed to send a market signal to homeowners and advisers that these are legitimate products with protections and benefits.
New legislation is also needed to prevent the emergence of rogue equity release products, which would erode confidence in high-quality products, it added.
“At least on the basis of protecting consumers, Homesafe Solutions would strongly encourage commencing steps towards a legislative framework, such as the development of an ASIC advice and information campaign, a reference to an appropriate parliamentary committee and an exposure draft amendment of the National Credit Code.”
Homesafe said the main aim of equity release regulation should be to ensure the homeowner has the legal right to remain in their home for the remainder of their life.
This would remove the greatest reservation people have about equity release, it said.
[Related: Fund manager plans new mortgage product for brokers]
