The leading industry body for the mortgage and finance industry, the MFAA, today hit back at suggestions that mortgage brokers have played a role in the rise of home loan arrears.

“Mortgage brokers are not responsible for the increase in mortgage arrears, as it is the responsibility of the lender to approve home loans recommended by a broker,” said Phil Naylor, CEO of the MFAA.

“While brokers need to assess an applicant’s ability to service a loan, and recommend a loan that is right for the borrower, ultimately, the lender decides whether or not to lend money.

“Any reports to the contrary surfacing today as a result of the Reserve Bank of Australia’s Financial Stability Report released yesterday are inaccurate and misleading,” said Mr Naylor.

“Unfortunately there are some fringe lenders in our industry and we are determined to rid our industry of these unscrupulous operators. The very small minority of brokers and lenders who recommend loans inappropriate for a borrower’s needs are a blight on our whole industry.

“We have been campaigning since 2002 for national regulation of mortgage and finance brokers, and we eagerly await the introduction of legislation by the Commonwealth,” said Mr Naylor.