Explainer: where banks get their funding
Banks turn to customers, institutions and shareholders to fund loans to customers.
PT1M21S 620 349A couple and their two children were evicted from their home the Tuesday before Easter – their home loan just over $2000 in arrears.
Greg Saunders said he took out a loan for $255,801.05 with RAMS in 2007 to cover the full cost of a house in Branxton, about 60 kilometres north-west of Newcastle.
Having left home and school at 13½, he was working as a plant operator in the coal industry. He said he was injured at work in 2010 and laid off in 2011, forcing him to ask the bank for hardship provisions. Lately, he'd been working casual night shifts.
Greg Saunders and his partner Alison Hale with their children, Tom 10, and Bronte, 15. They are living in a caravan at the home of Alison's son Dylan, left. Photo: Marina Neil
"I had got behind, I am not disputing that, but I had always made the payments up in the past, and clawed my way back square," Mr Saunders said.
"I was even in front for a little while."
Documents show Mr Saunders was $6222.16 in arrears on December 9 last year, with legal and other costs adding $1255.05 for a total of $7477.21.
The family of four is now living in a caravan. Photo: Marina Neil
The bank wanted $1000 a week in repayments, more than twice the normal $397.
Mr Saunders said he missed a deadline earlier this month and the bank moved. Documents show that by that stage, the arrears were down to $2049.20, but costs were up to $1520.25, for a total of $3996.91.
"I offered them the money but they said it was too late," Mr Saunders said. "The Credit Industry Ombudsman said it was too late."
He said a letter arrived on Tuesday saying he had until April 12 to remove their possessions "under supervision".
Mr Saunders, his partner Alison Hale and their children, Tom 10, and Bronte, 15, are now living in a caravan at the home of Alison's son Dylan.
The Newcastle Herald was advised of their plight earlier this week, and has viewed a range of documents pertaining to the loan and the Supreme Court order that RHG Mortgage Corporation (formerly RAMS) obtained to "take possession of the land and premises".
The legal firm acting for RHG said it had no comment to make, while RHG did not respond, despite a promise to do so, on Wednesday.
National Party Senator John Williams, whose political career has included a number of inquiries into banking and finance, said RHG's treatment of the family appeared "pretty heavy-handed, on the face of it".
Senator Williams, who is taking part in a parliamentary inquiry into the way banks deal with loan defaults, said he was troubled by what he had heard.
"Sometimes it's the bank and sometimes it's the borrower but you would reckon for a couple of thousand dollars they should have been able to come to some sort of negotiated alternative," Senator Williams said.
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