Over the last couple of months, daily life as we know it has been turned upside down by the COVID-19 pandemic. Businesses have closed, jobs have been lost and infrastructure has been placed under strain, all over the world. Amid the chaos, Australia has emerged as something of a dire case, too. Given the devastation that bushfires caused just a few months prior to the coronavirus outbreak, many are now feeling the effects of what has effectively been a double hit to their livelihoods.
But when looking at the broader statistics, it’s easy to lose sight of the individual narratives that make up the greater whole. For Aaron Milburn, Pepper Money’s general manager mortgages and commercial lending, it’s crucial to stay focused on the people who have been most heavily affected by the current situation. After all, he says, it’s those individuals who make up the wider collective – and helping them one-on-one is a step in the process of helping everyone.
“We understand that the impacts of COVID-19 have been significant, and it’s an extremely tough time for many people,” says Milburn. “We need to remember that behind every customer is a real family who could be impacted – and we are committed to helping them succeed, even in these difficult circumstances.”
“We need to remember that behind every customer is a real family who could be impacted – and we are committed to helping them succeed” Aaron Milburn, Pepper Money
Brokers, says Milburn, have an obligation to support their customers during this period. Every borrower has unique circumstances, therefore COVID-19 will impact individuals differently.
“Pepper Money has always been passionate about every Australian understanding all their financial options, which is why we have invested heavily over the years to help educate brokers,” says Milburn.
Now, he believes, is a time when brokers can step up and put their education to positive use in service of the wider community.
Milburn points to a number of situations that could arise for borrowers. Unexpected events, like the one we are experiencing right now, may make it difficult for some people to maintain their loan repayments. This may be the result of the reduced income of either the borrower or their partner with whom they may share a joint account. Some borrowers may also have an investment property loan and discover that their tenant is either delayed in paying rent or simply unable to pay it due to their own situation during this public health crisis.
“This is where the support of an empathetic broker during this uncertain period is invaluable,” says Milburn.
“One of the ways they can do this is by proactively reaching out to the borrower to check in to see if they are experiencing issues or hardship – and encouraging them to contact their lender sooner rather than later if they need to seek fi nancial assistance.”
For example, Milburn notes, a borrower’s loan account may have features that could help them manage their repayments or cover other daily essential expenses, like groceries or utility bills. They may also be able to access available funds through a redraw or in their off set sub-account.
“Pepper Money will continue to honour all trail payments on loans with customers whose ability to make repayments is aff ected by COVID-19, until at least 31 December” Aaron Milburn, Pepper Money
“Other options may include potentially accessing equity in their home loan or reducing their loan repayment amount for a set period of time, or implementing a repayment break,” Milburn explains.
Some individuals or business owners who have been impacted by COVID-19 may also have access to government assistance through initiatives such as the ‘Supporting Individuals and Households’ financial assistance plan, or the recent support measures implemented for sole traders.
Despite the media buzz surrounding the COVID-19 situation, not all clients will be aware of their options. Brokers having these conversations with their clients sooner rather than later is critical to achieving the best outcomes, Milburn stresses.
“Whether they are preparing for changes ahead or having difficulty meeting their financial obligations now, we recommend that they let their lender know as soon as possible so that they can discuss their options,” says Milburn.
“If we become aware of a borrower’s change in circumstances, we will aim to work with them to understand their unique situation and find a solution.” Milburn is also keenly aware that brokers themselves will need support during this di cult time. He is quick to point out that uncertainty due to the economic impacts of the COVID-19 pandemic is not merely limited to borrowers.
“Pepper Money will continue to honour all trail payments on loans with customers whose ability to make repayments is affected by COVID-19, until at least 31 December 2020,” says Milburn.
“We understand that while a broker’s priority is fi rst and foremost their customer, they may also feel uncertainty about the future.”