FAMNZ blasts banks for mortgage delays
The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has once again voiced significant concerns over the slow processing times for mortgage applications by banks, stating that these delays are now adversely affecting the mental health of mortgage advisers.
Leigh Hodgetts (pictured), FAMNZ’s country manager, emphasised the severity of these delays, which often exceed 10 working days, noting that real estate agents are increasingly recommending that buyers bypass advisers and deal directly with banks.
In November, FAMNZ called on mortgage advisers to unite against “anti-competitive bank practices” that harm both advisers and consumers, criticising the longer wait times for adviser-submitted home loan applications compared to direct applications, branding the situation “unacceptable.”
FAMNZ’s advocacy efforts and industry challenges
Hodgetts reported that FAMNZ is actively advocating for mortgage advisers, challenging unfair recommendations by the Commerce Commission and engaging with Scott Simpson, the new minister of commerce and consumer affairs. Despite these efforts, inefficient banking practices continue to undermine their work.
“Our members, and I’m sure other mortgage advisers, are spending 70% of their time on work that should be taking 20% of their time, chasing banks, getting errors fixed, and following up loan applications that have been in a queue for way too long,” Hodgetts said.
Advisers’ struggles and calls for action
The prolonged delays are reportedly affecting the income and emotional well-being of advisers, many of whom operate independently.
“Some are struggling emotionally as they see their income drop through no fault of their own,” Hodgetts said.
She stressed that the workload and delays have reached unprecedented levels, even worse than those experienced before the holiday season.
Regulatory response needed
Hodgetts criticised the current focus of the Commerce Commission and urged it to address the inefficiencies within the banking sector that she believes are being exploited to increase profits.
“This is unacceptable and anti-competitive, and if the Commerce Commission is serious about competition they need to divert their focus away from advisers, who are doing all they can to ensure consumers are looked after, to the banks who clearly see delays as a way to increase their profits,” she said.
Technological and systemic inefficiencies
Highlighting the outdated systems used by banks, Hodgetts called for immediate action, pointing out that the delays encountered in New Zealand are not as common in other countries.
“Our banks are using manual and antiquated systems that should have been updated years ago,” she remarked, adding that the expected market increase due to lower interest rates could exacerbate the situation if not addressed.
Hodgetts concluded by demanding that the Commerce Commission increase pressure on banks to improve support for mortgage advisers and their clients.
“Just fix the problem,” she said.
