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27000 distressed properties looking for a new owner

ASIC, the nations financial sector regulator, warns that missing mortgage repayments can happen to anyone, particularly in sectors facing rising unemployment such as mining and media.

It is stressful and embarrassing to talk with a lender but taking action quickly means you can stop a small problem from becoming a big one, a spokesman says.

Avoid more borrowing

It strongly recommends avoiding borrowing more money or using credit cards, which usually have much higher interest rates, or borrowing from friends and family, which creates social pressures.

Consolidating debt or refinancing can mean additional costs, while switching home loans may take some time to recoup costs.

Accessing super should only be considered as a last resort and only in cases where it means saving your home, the spokesman says.

When you get behind on mortgage repayments, it is time to get serious, he adds.

A lender must take several steps before legal action, including repossession.

These start with a letter alerting the borrower to the missed payment, a default notice giving at least 30 days to catch up, a statement of claim, or summons, a writ action to taking possession of the property, a sheriffs letter stating when locks will be changed and eviction.

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