Genworth lobbies for mortgage assistance scheme

The mortgage insurer Genworth is leading a push to win government support for a HECs style public loan system for home buyers who lose their jobs.

Genworth chief executive Martin Barter said the company hosted a roundtable in Canberra last month with finance industry representatives and officers from Treasury and Prime Minister and Cabinet, at which it presented an outline for what it calls the National Unemployment Mortgage Assistance Program.

The idea is that the government would offer an income-contingent loan for a fixed period for mortgage borrowers who lose their jobs.

The loan would go towards covering mortgage payments and would be repayable once income was restored.

Genworth has commissioned Access Economics to formulate a more detailed plan for the scheme and will meet with government again in October.

Genworth has also proposed that the government fund the establishment of a mortgage stress help line.

Barter said the group found in its research that people were reluctant to contact their lender when they started experiencing financial hardship.

In its latest Mortgage Trends Report, published yesterday, Genworth reports that 20 per cent of borrowers would contact their lender only as a last resort.

Genworth's view is that there needs to be an independent body staffed by financial counsellors to act as a point of contact for borrowers who are struggling to make payments.