As interest rates rise, almost 300,000 people who took large and risky home loans during the pandemic could fall into severe financial hardship or even default.
"I think there probably needs to be a bit of thinking through [by regulators] in terms of what this was going to mean. And perhaps that thinking was a bit slow.
Dr Wilson Sy says the regulator is there to protect the banks, not consumers, which leaves borrowers at risk. Wages have not kept up with rising property prices, which has forced some people to borrow more than six times their income and take out risky loans. . APRA declined to comment for this story, but its chairman Wayne Byres has previously used this term, "caveat emptor", when addressing questions about whether the regulator does enough to protect borrowers.
Gerard Brody says the regulator does not have a remit to protect consumers, but borrowers still have legal rights against irresponsible lending.
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