HomeFund was a NSW Government
sponsored scheme that made home loans to 57,000 low-income borrowers between
1986 and 1993. When the economy slowed and interest rates fell, HomeFund
borrowers were left with high fixed-interest loans and ballooning debt.
PIAC worked with financial
counsellors, other community legal centres and borrowers to bring the borrowers’
plight to public attention. The Government pushed through legislation on Christmas
Eve 1993 restructuring HomeFund. This fell short of meeting borrowers’ needs
and took away borrowers’ rights to sue for breaches of consumer protection.
After legal action in the Federal
Court and the High Court, a settlement proposal was developed and approved in
March 2001. Under the settlement, borrowers who still had loans achieved a
reduced interest rate and borrowers who still owed money after the sale of
their home had the debt waived.
Image: Daily Telegraph, 8 November 2000.