Emma Heard

December 06, 2008

AS her Sunshine Coast hinterland property goes under the hammer today, 81-year-old Joan George finds little comfort in new Queensland laws cracking down on mortgage fire sales.

In light of the global financial crisis, the groundbreaking legislation was rushed through Queensland parliament this week to protect vulnerable land owners, such as Ms George and her son Matthew, from losing equity when their properties are repossessed. The Georges’ 24ha block will be auctioned today.

Mr George said the property had received limited and unflattering advertising designed to attract only bargain-hunters, potentially leaving him with little to no equity.

The property was valued in May at $760,000 but Mr George believes the auction will not yield an appropriate sale price as the property has not been adequately advertised.

“The property was only advertised locally for six weeks, I understand that (the mortgage company) have valued our property at around $600,000,” he said. “I believe they are conducting a fire sale and are only looking out for their own interests.”

Under the new laws, fines for mortgagees who unfairly sell repossessed properties for below market value will be increased from $150 to $20,000.

Queensland is the first state to introduce such laws despite a wave of repossessions across Australia as home owners struggle in the face of the financial crisis.

But it is too little too late for the Georges, from Eudlo on the Sunshine Coast north of Brisbane.

Mr George took out a loan on the property to build a house on another piece of land and support himself and his mother while he acted as her carer. They live next door in a caravan on a 2ha block.

Mr George was working as an IT professional in the UK when his mother suffered a brain aneurism. Despite Mr George’s efforts to work part-time and refinance the debt, the property, which the pair co-own, is now in the hands of the mortgage company after Mr George failed to make repayments since July.

Mr George and his mother are two of the many Australians who are at risk of such treatment from their mortgagees.

Fitch Ratings data released last week showed a doubling in mortgage defaults in Queensland in the past four months.

Before introducing the legislation to parliament, Premier Anna Bligh said she was aware of the financial challenges many Queenslanders were experiencing. “I know that for some the very real prospect of losing their homes is keeping (many people) awake at night as they struggle tomake their repayment,” Ms Bligh said.

“The only thing worse than the prospect of losing your home is the concern that your financial institution could sell your property quickly and at below market value just to cover outstanding debts, leaving you with nothing.”

Caxton Legal Centre lawyer Scott McDougall, who is representing Mr George, said the new legislation was a step in the right direction but more needed to be done to protect home owners across Australia.

“We hope that these strong new penalties for breaches, from what is currently a $150 fine to up to $20,000 for offences occurring after January 1, 2009, is especially welcomed,” Mr McDougall said.

“There needs to be further regulations and further pressure to develop the regulations.”
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