02 Jul 2020

Firstmac reveals fewer borrowers needing loan hardship

Non-bank lender Firstmac has released a new analysis of its $12.8 billion loan book which shows that the number of home owners on COVID-19 hardship arrangements has fallen as the economy reopens.

Managing Director Kim Cannon said the percentage of mortgage holders on fully or partially-suspended repayments due to COVID-19 hardship had dropped to 5.37% at June 30 from 5.65% on May 31.

“Over the past two weeks our hardship team has been contacting affected customers to check on their circumstances and we have been pleasantly surprised to find that a lot are choosing to resume normal repayments because their situation has improved,” Mr Cannon said.

“Many people are still doing it tough, but new hardship applications from our customers have fallen to about one per day, down from more than a hundred and fifty per day at its peak three months ago.”

Over the past quarter, the monthly loan book updates from Firstmac have become a market bellweather for investors in bank stocks and Residential Mortgage-backed Securities (RMBS).

During the month of June, there were $9.5 million of new COVID-19 hardship assistance requests from Firstmac borrowers, compared to a much larger $91 million in loans that moved out of COVID-19 hardship status.

Firstmac Portfolio Summary

 

30/05/2020

30/06/2020

Total Balance

$12.806 bln

$12.737 bln

Gross Arrears ((incl'd COVID) 30+

2.36%

2.86%

less COVID Arrears 30+

1.88%

2.45%

Net Reported Arrears 30+

0.47%

0.40%

COVID Arrangement (partial suspension)

2.51%

2.56%

COVID Hardship (full suspension)

3.14%

2.81%

Total COVID impacted borrowers

5.65%

5.37%

 

Mr Cannon said the main reasons that borrowers were giving for returning to normal repayments were that they had started recieving the Government’s Jobkeeper payment or that they had started getting more hours at work.

“As the economy is progressively reopened, we are optimistic that more of our customers in the worst affected industries like hospitality and retail will be able to pick up work and see their financial position strengthen,” Mr Cannon said.

“It is still possible that a second COVID-19 wave could set us back again, but so far, the signs of recovery are promising.”

The number of COVID-19-affected loans that were 30+ days in arrears increased from 1.88% last month to 2.45% now, reflecting existing cases moving into the 30+ days category, rather than new hardship.

Media contact: Duncan Macfarlane on 0434 184 264

Firstmac Limited is an independently-owned, Australian financial services provider with more than four decades of experience in home and investment loans. Firstmac has written in excess of 130,000 home loans and manages approximately $12.8 billion in mortgages and $300 million in cash investments. Firstmac is a premier sponsor of the Brisbane Broncos.

Victoria bucks national trend of falling COVID-19 hardship

Non-bank lender Firstmac has released a new analysis of its $12 billion loan book which shows that the number of homeowners on COVID-19 hardship arrangements is rising in Victoria, against a backdrop of falling hardship in other states.   

Managing Director Kim Cannon said that the Victorian lockdown was predictably causing increased financial hardship among Victorians, and especially business owners and the self-employed

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