Didn't see the 60 minutes stuff - never do it's utter crap. The comparison with the US is absurd. Two key factors in the Australian banking and loan regs are thus: 1. The mortgages on houses are "full recourse" that is the bank can pursue mortgagee assets outside of the house that is mortgaged - therefore people are less likely to want to walk away and will find ways to fund the loan payments. As Warnie stated the problem comes when the debt mix is weighted in favour of the "store cards" and "don't pay anything for 10 years super sized TV" and inevitable CC debt that throws people out of their houses. 2. If it can be proven that the bank should have known or ought to have known that the mortgagee couldn't afford the loan when they were signed up then the banks cannot go asset chasing - incentive to make prudent loans to those who can afford them (housing at least) is thus mostly ensured.
In the US it's easy to just throw the keys at the bank and walk away - not so here. Therefore the sub prime / low doc issue is not the debacle here as it is in the US
Never watch 60 mins or that breakfast show drivel or any commercial telly to get an accurate perspective on important matters such as this.
