Structure of clawback is unfair
Serviceability and interest rates will remain ongoing issues for brokers and their clients in 2024, according to Anja Pannek, CEO of the MFAA.
“While there is speculation on when rates might begin to fall, it’s very possible rates will remain elevated for some time,” Pannek said. “We also know hundreds of thousands of home loans are still to come off very low fixed rates next year. “
Pannek (pictured above) said these borrowers will benefit from the help a broker provides as they prepare to deal with a higher rate.
In fact, a member survey by the MFAA earlier this year revealed brokers are seeing a large number of clients using a broker for the first time to understand options around their home loans.
“This coupled with ongoing complexity in lending from consumer and business owner perspectives means there will be continued opportunities for brokers,” Pannek said. “Also, brokers should be aware of indicators that their clients are experiencing hardship and direct them to their lender to ask for help early.”
Clawbacks an ongoing problem for brokers
When it comes to one of the biggest issues brokers identify as an ongoing problem, Pannek said the MFAA had been “clear, consistent and vocal” last year regarding clawbacks and remains committed to working with industry to see that a better approach to clawbacks is put in place.
“I caution against regulatory intervention on clawbacks, this would lead to a revisit of the entire remuneration model for mortgage brokers,” Pannek said.
“While there has been movement by some lenders, overall the structure of clawback is unfair and needs to change.
“I strongly urge all lenders to consider changes to move to a fairer model of clawback and shift away from the harsh cliff nature in practise now.”
MFAA’s plans for 2024
When it comes to plans for 2024, the MFAA has several key issues it will be championing this year, including following the treasurer Jim Charmers’ commitment to reviewing the Home Loan Price Inquiry.
“We were pleased to see the federal government announce that they are going to review the recommendations from the Home Loan Price Inquiry, and improving the home loan discharge process is something we are focusing on into the new year,” Pannek said.
“We stand by the recommendations we made to the Inquiry in 2019 – consistency in the loan discharge form and maximum timeframes for discharges to be processed.”
Pannek said another key focus of the MFAA this year is technology and assisting members to use technology such as AI and CDR to improve efficiencies in their business.
“We’ll be releasing a range of resources to help our members decide which technology is right for their business and implement them into their ways of working,” Pannek said.
Other key areas of focus for the MFAA this year are cybersecurity and cyber resilience resources and insights, with payroll tax in NSW also an unresolved issue where the MFAA will continue its advocacy.
“The payroll tax outcome in NSW will have far-reaching consequences across most jurisdictions in Australia,” Pannek said. “That’s why our conversations with decision-makers have continued right throughout 2023 and will continue in 2024.”
MFAA championing a range of broker issues in 2024
Pannek said there are a lot of other issues her organisation will champion this year.
“We have a lot planned and we’re ready to take on any challenge that comes up as well,” she said.
When it comes to advising brokers on how to face the challenges of 2024, Pannek said it’s vital that they stay connected.
“Our industry is one that genuinely supports each other,” Pannek said. “Reach out to your fellow brokers, your aggregator and the association if you ever need support. We are a very large industry – we are also a very close and caring community, here for each other.”
What are some of the key issues facing brokers this year? Share your thoughts below.
