The recap of this weeks mortgage, home loan and housing news in Australia.

The top stories for the week ending 09/03/08:

This week it’s all about the effects of the credit crisis and diminishing trust within financial markets. As banks face criticism for raising rates beyond that of the Reserve Bank we also need to ask questions as to why, we might just get a clearer picture of the real issues - here’s this week’s picks:

Banks lay down the ‘double whammy’ rate rise
The Age
Westpac lifts it’s home loan rates to 9.27% and joins National Australia Bank in passing on to home buyers the extra costs that the banks are having to pay to borrow from international markets, with other majors likely to follow. View Story »

Homegrown sub-prime threat
News.com.au
Adele Ferguson writes that Australia could have a sub-prime crises of it’s own with reports of ‘Australia’s lending institutions extend almost $1billion in so-called sub-prime loans to customers with poor credit history and whose previous defaults were not picked up in the credit-checking process.’ View Story »

ANZ boss flags credit rationing
BusinessSpectator
In an interview with BusinessSpectator Mike Smith, chief executive of ANZ, said “We’re definitely moving to a squeeze and as I say, if we can’t pass on the increased cost of the funds then we have to constrain our lending,”. Smith also goes on to tackle the political environment surrounding interest rates.View Story »

Crisis looms as capital rules limit bank lending
The Age
Banks are running out of money writes Marc Moncrief as they struggle to source funds for potential borrowers. In the article Macquarie Bank economist Rory Robertson calls it “the biggest economic issue in the world right now”, that banks’ capital is running tight as more companies are coming to the banks to borrow. View Story »

In the grip of the Big Squeeze
Sydney Morning Herald
Danny John and Jacob Saulwick provide a detailed article on the liquidity crisis, stepping through it’s emergence, how it’s playing out in the financial markets and the uncertainty that remains in the financial sector. View Story »

The Evolving Economic Outlook
RBA
Malcolm Edey, Assistant Reserve Bank Governor, ended his presentation to the Australian Industry Group with “The global economic situation is one important source of uncertainty, as is the situation in world and domestic financial markets. Another is the risk that the recent rise in inflation feeds back into wage and price expectations. All of these will be important areas to watch in the period ahead.” View the Transcript »

Credit crisis turning the screws on bank lending
ABC
Associate professor Steve Keen, the author of the Oz Debtwatch blog, says the current crisis will force Australia’s banks to ‘ration’ lend writes Michael Janda with Prof Keen giving a gloomy prediction or perhaps warning “The best guide as to what we could experience comes from Japan, where the housing market has fallen on average 70 per cent since its peak in about 2002.”….