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Citizens Electoral Council of Australia

Media Release  20th of May 2011

Craig Isherwood‚ National Secretary
PO Box 376‚ COBURG‚ VIC 3058
Phone: 03 9354 0544 Fax: 03 9354 0166
Email: cec@cecaust.com.au
Website: http://cec.cecaust.com.au
 

Mortgage delinquencies, bank crisis signals GFC Mark II—enact HBPB now!

The spike in the rate of mortgage delinquencies in Australia, coinciding with debt rumblings all over the world, signals a second wave of financial crisis, which has the banks staring down the barrel of collapse.

When Westpac announced its record half-year profit, it also revealed that mortgage delinquencies—households fallen 90 days or more in arrears—are running at a higher rate than at the height of the GFC in 2008; ANZ also admitted a spike a delinquencies.

According to the Reserve Bank of Australia, the highest rate of delinquencies is in NSW, while the fastest rate of growth in delinquencies is in southwest WA in the area around Mandurah, which not that long ago was being hailed as containing the most valuable property in the nation.

The terrifying reality for debt-laden homeowners, and their banks, is that it is the cost of living crisis driving the delinquencies, and not so much interest rate rises—yet.

Rates are expected to rise soon, and when they do, the extra cost will crush countless mortgage-stressed homeowners, who on average, according to figures from the Real Estate Institute of Australia, are already devoting more than 35 per cent of their income to servicing their mortgage.

That spells doom for the banks: Australia has the last remaining property bubble in the world, and Australia’s banks are completely exposed to it; a default-driven housing market collapse will cause a bloodbath in the banks’ balance sheets à la Ireland and Spain.

Citizens Electoral Council leader Craig Isherwood today demanded that the Commonwealth Parliament finally enact the CEC’s Homeowners and Bank Protection Bill 2008 (HBPB), which would instantly freeze mortgage foreclosures so people don’t lose their homes, and place the banks into receivership to clean up their finances so they don’t collapse and vaporise their customers’ deposits.

“The government must pass the HBPB,” he said. “It must not repeat what it did in 2007/8, when it let thousands of homeowners lose their homes, but jumped to bail out the banks—which they had lied to assure the public they were ‘sound’,” he said.

“To prop up the banks, they put up hundreds of billions of dollars in guarantees, loans and direct cash injections, and tripled the First Home Owner Grant to deliberately make housing more expensive.

“Ultimately, all they achieved was a mountain of government debt and a temporary reinflation of the property bubble which has kept housing permanently unaffordable for new homeowners; now, less than three years later, it is all coming apart.”

Mr Isherwood continued, “Now is the time to fix the system properly, by enacting such measures as the HBPB, and Lyndon LaRouche’s prescription of a global Glass-Steagall reorganisation of the world monetary system to protect the real economy from the toxic debt-riddled financial predators in the City of London and Wall Street.

“The HBPB will: freeze foreclosures on homes and family farms; revalue housing debt to make it affordable, i.e. down to where mortgage repayments are not more than 25 per cent of household income (which will automatically revalue properties); and put the banks under government protection so they keep operating and providing a financial service whilst the government audits and cleans up their balance sheets.

“This is the only solution—it puts the welfare of the people first, it puts the government in charge of the process, where it should be, and it is the only approach that will save Australia and the world from collapsing into a new dark age.”

He concluded, “Every Australian is affected by this crisis, but it is imperative that they understand that despite their personal hardships, the situation is not hopeless, if they stand up and demand a real solution, by joining the CEC.”

Join the fight for the HBPB. Order a free copy of the HBPB—The Only Solution DVD here; sign the online petition here.

To buy a copy of What Australia Must Do to Survive the Depression, click here.

Click here to join the CEC as a member.

Click here to refer others to receive regular email updates from the Citizens Electoral Council of Australia.



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