As regulators crack down on investment and interest-only lending, will mortgage brokers face increased scrutiny?
MPA asked a franchise, an aggregator and a lender whether brokers are the next target in the regulator firing line.
John Flavell, CEO, Mortgage Choice
“I don’t believe brokers are the next target in the regulators’ firing line. The broking industry has already gone through signifiant change over the years with the introduction of NCCP.
All brokers have a very clear obligation to ensure customers can service their debt without substantial
hardship.
Moving forward, I think we can expect to see continued growth in broker market share. Recent changes to home loan pricing and policy have made the home loan environment more complex than ever before.
As a result, buyers increasingly need expert advice to help them navigate the home loan maze – which is where mortgage brokers come in. Brokers not only have access to hundreds of home loan products from a variety of lenders, but they have the expertise, knowledge and ability to help buyers find the right loan.”
Tim Brown, CEO, Vow Financial
“The mortgage industry is very diffrent to the financial planning industry. We are giving the consumer money to buy assets, which, in 99% of cases, are selected by the client and not the mortgage broker. This alone generally does not put the broker into a conflct situation.
Most mortgage brokers do not collect a fee, but are paid by the financial institution. Again, more than 90% of all loan transactions are completed with a major bank or one of its subsidiaries. Therefore, commissions are relatively the same and do not inflence the broker’s decision on where the loan is lodged. Add to this that the mortgage broker does not make the credit decision, again removing any conflct in whether the client’s loan is approved or not.
APRA and ASIC shouldn’t have a reason to target mortgage brokers when they aren’t conflcted. All a mortgage broker does is ensure the client gets the best product at the best price.”
Kim Cannon, Managing director, Firstmac
“Brokers are already highly regulated in their compliance with the NCCP Act, licencing and the professional accreditation they are expected to hold.
These days, the educational standards expected of brokers are much higher than in past generations. Diploma qualifiations, mentoring from industry bodies, and other product and policy training requirements of lenders have increased the professionalism of the sector.
It’s an industry that moves fast, and most brokers know they need to keep up if they want to build their business. In all likelihood, ASIC will take a closer look at brokers in the future, particularly niche sectors of the industry, because brokers are such a significant part of the home lending industry in Australia. But most brokers should have no cause for concern if they’ve kept their house in order.
John Flavell, CEO, Mortgage Choice
“I don’t believe brokers are the next target in the regulators’ firing line. The broking industry has already gone through signifiant change over the years with the introduction of NCCP.
All brokers have a very clear obligation to ensure customers can service their debt without substantial
hardship.
Moving forward, I think we can expect to see continued growth in broker market share. Recent changes to home loan pricing and policy have made the home loan environment more complex than ever before.
As a result, buyers increasingly need expert advice to help them navigate the home loan maze – which is where mortgage brokers come in. Brokers not only have access to hundreds of home loan products from a variety of lenders, but they have the expertise, knowledge and ability to help buyers find the right loan.”
Tim Brown, CEO, Vow Financial
“The mortgage industry is very diffrent to the financial planning industry. We are giving the consumer money to buy assets, which, in 99% of cases, are selected by the client and not the mortgage broker. This alone generally does not put the broker into a conflct situation.
Most mortgage brokers do not collect a fee, but are paid by the financial institution. Again, more than 90% of all loan transactions are completed with a major bank or one of its subsidiaries. Therefore, commissions are relatively the same and do not inflence the broker’s decision on where the loan is lodged. Add to this that the mortgage broker does not make the credit decision, again removing any conflct in whether the client’s loan is approved or not.
APRA and ASIC shouldn’t have a reason to target mortgage brokers when they aren’t conflcted. All a mortgage broker does is ensure the client gets the best product at the best price.”
Kim Cannon, Managing director, Firstmac
“Brokers are already highly regulated in their compliance with the NCCP Act, licencing and the professional accreditation they are expected to hold.
These days, the educational standards expected of brokers are much higher than in past generations. Diploma qualifiations, mentoring from industry bodies, and other product and policy training requirements of lenders have increased the professionalism of the sector.
It’s an industry that moves fast, and most brokers know they need to keep up if they want to build their business. In all likelihood, ASIC will take a closer look at brokers in the future, particularly niche sectors of the industry, because brokers are such a significant part of the home lending industry in Australia. But most brokers should have no cause for concern if they’ve kept their house in order.
