What some people fail to realise wrt bank loans for housing is that in places like the USA, all loans are NON-recourse loans. That is, in the USA, the non-recourse loan does not allow the lender to pursue anything other than collateral (ie, the house). In recourse loans, as that which are offered in Australia, the banks are allowed to go after you for amounts that you owe - even after they’ve taken the collateral. If you default on a recourse loan, the lender can bring legal action against you, garnish your wages, levy bank accounts, and use other methods to collect the amount you owe.
For that reason, talk of any housing bubble hurting the banks is totally wrong and uniformed. Sure, those people that go bankrupt will be a drag on the banks, but that's likely such a small proportion of their loan books as to be trivial and in any case are usually covered by insurance.
ANZ Price at posting:
$34.21 Sentiment: Buy Disclosure: Held
NAB Price at posting:
$36.86 Sentiment: Buy Disclosure: Held
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