Senator Sherry: The Minister for Financial Services and Superannuation has provided the following answer to the honourable senator's question: Generally, payments made to a loan are applied in accordance with the credit contract. For credit contracts regulated by the National Credit Code (the Code) (which is Schedule 1 of the National Consumer Credit Protection Act 2009), Division 4 of the Code regulates funds recovered from the sale of mortgaged goods. Specifically, after a sale of goods under a mortgage, the credit provider must credit the mortgagor with a payment equivalent to the proceeds of the sale less any amounts they are entitled to deduct. (subsection 104(2) of the Code) A credit provider that sells mortgaged goods is entitled to deduct: the amount secured by the mortgage in relation to the credit contract; the amount payable to discharge any prior mortgages to which the goods were subject; and the credit provider's reasonable enforcement expenses. (section 105 of the Code) A court, on application by a mortgagor, may compensate a mortgagor if the credit provider did not exercise its power of sale in accordance with the Code. (section 106 of the Code).