Australia’s biggest bank will implement a freeze on forced home sales for customers who have defaulted on their loans due to the pandemic.
The country’s biggest retail bank has initiated a moratorium on forced sales until September 2021, for customers which have accessed COVID-19 loan deferral schemes and are still unable to resume normal payments.
In an email between CBA and Financial Counselling Australia obtained by News Corp, the bank confirmed customers still impacted by the health crisis would have certainty of remaining in their house for the upcoming holiday season.
CBA head of retail banking Angus Sullivan said the bank was aware a number of customers remain worried about the ongoing uncertainty plaguing the economy from the pandemic, with the eviction freeze designed to give borrowers ample time to assess their financial situation.
“This means any customer making full mortgage repayments in the 12 months prior to entering a home loan deferral will be able to remain in their home until September 2021, even if they are now struggling to get back to making repayments, where they agree to work with us,” Mr Sullivan said in his email to the FCA chief executive Fiona Guthrie.
“This will give these customers the opportunity to get back on their feet, confident they can remain in their home this Christmas and well into next year.”
Ms Guthrie has been advocating for an industry-wide moratorium on forced sales during the pandemic, noting more needs to be done by the sector to ensure Australians can remain in their homes.
“Extraordinary circumstances require extraordinary measures,” Ms Guthrie said.
“This last thing we want to see is people out of their homes.”
Ms Guthrie also said the banking industry would need to implement a broader range of solutions to assist the varying needs of customers still impacted by the virus.
At the beginning of the pandemic, Australia’s banking industry implemented blanketing support measures that allowed customers experiencing financial hardship to place their loan repayments on hold for up to six months.
The deferral period, which ended in October, will allow loan customers to freeze repayments up until March 2021.
Ms Guthrie said Australians who are financially impacted can access support from the National Debt Helpline on 1800 007 007.