A CHARLESTOWN woman says the “huge response” to her call for a royal commission on mortgage fraud and sub-prime loans shows the problem is far greater than authorities will acknowledge.
Michelle Matheson, a single mother of three, has been fighting for seven years to keep the home she bought with a “low-doc” loan through a mortgage broker.
In her struggle, she has found many other “ordinary Australians” in similar situations and is working closely with Western Australian activist Denise Brailey, founder of the Banking and Finance Consumers Support Association.
Ms Brailey was among those who gave evidence in Sydney last month to a Senate Economics References Committee inquiry into the performance of the Australian Securities and Investments Commission (ASIC).
Ms Matheson said she lodged her dispute in mid-2012 and heard nothing until December last year, shortly before a letter arrived telling her the bank would give her $50,000 if she walked away from the house within four weeks.
“I’m claiming fraud on behalf of the lender, which is what FOS [Financial Ombudsman Service] calls maladministration,’’ Ms Matheson said.
“These cases should be settled in a way that people can keep their homes. Extending the terms of the loan, to make them a just and prudent contract, is the obvious start.’’
Ms Matheson said she took out her loan after someone she had hired to help get her finances in order told her that if she could pay rent, she could afford a home loan.
“I know it seems incredible now, but he said we could unlock the equity in my mother’s home at Cardiff to help me get into mine and I trusted him, we both did,’’ Ms Matheson said. ‘‘My mother ended up with a second mortgage and had to sell her house to stop the bank foreclosing on mine, and now she lives in a mobile home village.’’
Ms Matheson applied for her original loan form and was shocked to be sent 11 pages, rather than the three she says she saw in 2007.
She said the form was riddled with mistakes, her personal financial details were inflated and the address of the house was completely wrong.
Philip Field, of the FOS, said the service dealt with 4193mortgage finance complaints in 2012-13.
He said there had been a “significant increase” in “disputes about maladministration”, going from 209 cases in 2010-11 to 706 in 2012-13.
Ms Matheson said many people detailed harrowing problems at www.change.org calling for a royal commission on the banking and finance sector.