Under new laws, lenders are reviewing borrowers’ income and expenditure in much greater detail.
New Zealand’s government is reviewing new banking regulations after evidence that lenders are applying the rules so rigorously that many people are being shut out of the housing market.
That follows a report from credit bureau Centrix that just 30 per cent of home loan applications in December resulted in loans, down from 36 per cent before the Credit Contracts and Consumer Finance Act took effect on December 1.“It may be that in the initial weeks of implementing the new CCCFA requirements there has been a decision to unduly err on the side of caution,” Mr Clark said.
Katrina Shanks, chief executive of Financial Advice New Zealand, which represents mortgage brokers and other advisers, said the industry supported the protection measures in the new law, but there were clearly unintended consequences.
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