Home Ownership
Sydney Morning Herald
Wednesday April 1, 1992
SIR: Without necessarily inferring a deliberate intention to mislead I must say the item "Many quit Government-backed home mortgage scheme" by Alicia Larriera (Herald, March 18) lacks balanced reporting.
The way the article is written would give your readers the impression that HomeFund or its finance provider and fund manager, FANMAC, has somehow failed
Nothing could be further from the truth.
To use the Premier's unreported words in replying to the Opposition's question (referring to the creation of FANMAC): "It was a thoroughly good idea which has been responsible for New South Wales maintaining a level of home ownership throughout the recession which it would otherwise have not been able to maintain."
Then: "All of the inquiries that the Treasury and I have made - and it is quite proper for us to be concerned about the matter - confirm what the Minister for Housing has said in this place which is that the performance of FANMAC with non-performing loans, or whatever the appropriate technical jargon is, has been absolutely first class."
Again quoting the Premier's reply: "All of the inquiries that have quite properly been pursued by the Treasury, the Department of Housing and the board have indicated that given the strength and depth of the recession, and given the proper role of HomeFund and FANMAC during that recession, the performance of the organisation has been perfectly acceptable."
Indeed, the Secretary of the Treasury is a director of FANMAC.
In regard to the fixed interest rate question which is the focus of your report, fixed interest is a feature of HomeFund as is the percentage of income-based repayments which are not directly affected by the nominated interest rate, although it is conceded that in the medium and longer term equity and total repayments are influenced.
For the above reasons the ability of borrowers to refinance without penalty is also an important feature of HomeFund.
Refinancing of loans is not peculiar to HomeFund as this happens on a daily basis among private sector borrowers who seek to get the best deal available for themselves. This is sensible financial prudence.
Such refinancing is not a vote against HomeFund nor FANMAC as your article presumes as regularly borrowers who decide to refinance their loans express appreciation that HomeFund gave them the start they would not otherwise have had.
Joe Schipp,
Minister for Housing,
Sydney.
March 25
© 1992 Sydney Morning Herald