Westpac’s video which compared its extra interest rate rise to the cost of bananas has been removed from the website.
Originally the video was produced to offer a simple explanation of the global financial crisis to their employees, but the bank then sent it in an email to customers – who labelled patronising and insensitive.
The seven-and-a-half-minute cartoon begins with the words ‘Once Upon A Time.’ and shows a tropical storm decimating a banana plantation. The email was dispatched after the bank increased its variable mortgage rate by nearly twice as much as Australia’s Federal Reserve raised interest rates.
An Alt-A mortgage, short for Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or “prime”, and less risky than “subprime,” the riskiest category.
Alt-A interest rates, which are determined by credit risk, therefore tend to be between those of prime and subprime home loans.
Within the U.S. mortgage industry, different mortgage products are generally defined by how they differ from the types of “conforming” or “agency” mortgages, ones guaranteed by the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. Read the rest »
In January 2009, households in Mortgage stress fell 6% from December with 635,000 households in some degree of pain, compared with a peak of 900,000 in August 2008. Significantly there was a 15% fall in those facing a potential sale or foreclosure, thanks to the significant drop in interest rates, and the government payments in December. Young Families and First Time Buyers experienced significant reductions in stress. 161,000 households still are at risk of having to sell up or loose their homes. Read the rest »
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