Evelyn Crawford February 18, 2009

I could not agree more with Gary Smiths comments. Well written Gary. Clawbacks are also a thorn in my side. Weve done the work… no question and “some” lenders claw back a LOC for un used Limit. The client can use it the month after but do we get paid then…… NO !

Consumers want our services and the long standing brokers like Gary and myself get nothing from the banks at all. The aggregators need to stand up for us more and the lenders need to acknowledge we play a very important role in the amount of business they get. We are only asking for fair pay for fair work done, any more cuts and this will not be the case. Weare running a small business and have expenses like all do, Im sure the banks have no concept of our running costs and think the commission we get are net income… not the case guys, we have staff, overheads a mortgage or rent and other running costs, petrol for example in the many ks we do each week, driving to see clients. Do banks understand this.. No

oldBroker February 18, 2009

Absolute sour grapes…
The lenders are changing their commission structures based on the current market and have an obligation to shareholders to maximise earnings, which in some areas means to reduce costs. They are operating as any corporation would…
You want to get more commission, Paul? Then increase the current one-third of total loans submitted by brokers to (say) two-thirds, or start the rush to the non-banks.
Otherwise, accept the fact that the market system is efficient and will create/destroy jobs based on supply/demand (like the buggy-whip manufacturers).

Brad Oliver February 18, 2009

Clawbacks are grossly unfair, particularly as the Banks claw back the borrower with deferred establishment fees, then claw our commission as well.

Ted February 18, 2009

Before I joined an aggregator I wrote as much business, as an agent for one bank as I have done over the last year broking to many (I am a very small Broker). By the way that bank have maintained their commission levels to this day and I have gone back to whence I came.
In the past six months I have laid off, dismissed, sacked and fired two thirds of the lenders from my personal lender panel, mainly for lack of morals, poor service, arrogance, extortion and greed.
You see… I am in control of my business and my destiny, not this bank, that bank or which bank. As a broker I act for my clients not for the lenders and if I can’t do the deal effectively and to the clients best interest, I say so and offer to refer it on.

Richard Hicks February 18, 2009

I like many brokers truly sympathise with Gary’s situation. I mean, I’m a broker as well & of course, any loss of income is not appreciated

However, we are in business. As are lenders.

The big four are listed companies with three key stakeholders interests to consider;

Shareholders
Staff
Customers

Do you notice that brokers do not fit within these three key stakeholders at all.

Sure, brokers provide significant business to the big four, but in the current business environment, brokers do not have the ‘discretionary’ product choices we once enjoyed, hence no muscle. The big four can really ‘have their way with us’ because of that lack of muscle, so their current ’squeeze’ strategy can be done with almost impunity.

But have patience.

Brokers have long memories. So plan for the product market to swell in years to come with gennuine competitive pressures from alternative product providers and the broker market will again, have industry muscle.

What can you do now.

1. Look to charge for your service (it does have value)Show me one ‘white collar’ profession that doesn’t?
2. Mortgage business is for medium to long term finance needs. Clients who discharge <18 months are essentially seeking short term finance (without your knowledge) and should ‘wear’ these origination costs (contractually) in any event.
3. Banks will do what they can to increase profits, sell more products and WILL compete with you. You are just another distribution strategy so if there is a way to cut ‘originator’ costs, they will. Accept that as a fact.
4. Change you business model otherwise you will lose revenue. Fact.

In my opinion, if your business model lacks ‘control’ then you & your business can only ‘hope’ to hang in there. Take control of what you can and change your thinking as to how to secure diversified revenues.

I mean, the big four aren’t going to help us are they?

David February 18, 2009

Hi Garry

With respect mate, I feel that you have a bit of a “victim” attitude. Everyone is in the same boat and when the going gets tough the tough should get going. Cost of funds is a real issue for all funders and a direct result is margin squeeze. Like it or not mate we are in a tough time. Can I suggest you get positive, increase your volume to compensate for the decrease in comms, consider a non bank lender of which there are many who are still paying full comms and trails, look at other banks who have similar or better products than wpac (of which there are many)and who are paying higher comm, diversify your business to include insurance, car loans or what ever you can increase revenue, cut your own company and personal expenses, etc etc etc.
There is a way out of the gloom and doom and it wont last forever.
In relation to claw back, mate, if they pay you 5k upfront and the client walks after 12 months, theyve lost money and you have failed as a broker to keep them where they are. (unless its a sale) Thats what you get paid your trail for -Remember?
I am a non bank lender and have absolutely no love for the banks either but lets get real and look at the economics invloved in funding.
Also, at the risk of harping on, even if comms go down further, dont panic, when the planets re-align in a few years, competition and greed will no doubt kick in and slowly but surely comms will increase again to their previous levels.

Keep positive mate

Bobby Veljanovski February 18, 2009

Clawbacks are unfair, we do all the work to give these banks the business they otherwise would not have, they charge the client interest and they make more money in the first 12 months of that loan then our clawback amount is. to top it all off some lenders don’t even pay you trail in the first 12 months of the loan if its a discounted rate. Its just greed.

Paul February 18, 2009

There is only one way forward, fee for service and to pass any commission earnt back to the customer. Agree however with Gary’s comments

oldBroker February 18, 2009

Bobby… its not ‘greed’. I’m amazed how people put a personality on to something that a public corporation must do. It’s like calling a lion a ’savage’ when it kills/eats an animal.
The lender has done the calculations and determined that the current commission structure and clawback policies maximise earnings. Obviously, their commission savings will be somewhat offset by the reduced business, but their calculations will show an increased earnings, so they do it.
Doesn’t every broker do exactly the same thing in their own businesses… that if something isn’t providing value then you cancel the service, or stop buying it, or scale-back, or whatever… why are the lenders ‘greedy’ for doing exactly what you do?

Derek Miles February 18, 2009

Couldn’t agree more with Gary. The lenders particularly, the major 4, profited nicely from the broker network in the good times, but when the hard times come there is no hesitation to discard loyalty. It seems that banks will do anything to preserve profitability at all costs. I don’t buy the shareholder/investor argument. There is such a thing as corporate responsibility and community responsibility and lenders should build on loyalty in tough times, not destroy it.

The mortgage brokering industry is the only industry that I know where you do a lot of work to bring in a customer, and then you can lose that that entire income through no fault of your own. Often customers leave a lender on account of the poor service provided by the lender post settlement or indeed, the lender churns the business. No income stays with the broker for the considerable amount of work that goes into settling a loan with the lender.

I have diversified my business to offer other services to avoid dependence on mortgage brokering such as tax and accounting. Whilst many brokers may not so easily be able to do this, nevertheless, there are other opportunities to diversify.

And brokers should support the lenders who have maintained their commission structures and avoid the ones who have shown disloyalty to their largest source of business. It amazes me how the lenders who have been most aggressive with commission cuts are still getting a good share of the broker market.

Kym February 18, 2009

I absolutely agree with Richard Hicks and also sympathise with other brokers out there feeling the pinch.

As we head towards regulation and greater recognition of our profession we need to take control of our how we get paid for our professional services.

Our business charges all of our clients a small brokerage fee of $400 (for any completed loans only) which has filled the gap caused by the latest round of commission cuts, it also lets us maintain an independant approach in recommending the best options for our clients. I have not lost a client yet as a result of charging this fee.

Like any business, we need to be mindfull of maintaing and increasing our revenues from one reporting period to another. We cannot rely on the banks to determine what return we receive for our service provided.

I also strongly agree with Richards comments about changing your business model. Add further income streams to your business and at the same time provide a more complete service to your clients by offering products such as insurance, leasing and rental finance. If you don’t offer your cleints these services, rest assured the banks will and this will allow them to get their claws even further into your client.

As for clawbacks, yep they suck. I haveno problem with clawbacks for refinances, as one other broker mentioned, we should be looking afterour clients to avoid this anyway. As far as clawbacks for property sales go, I’m not entirely convinced that we can hit our clients for this cost…YET. The answer may be to include this cost in the amount we charge all our clients, i.e. we may look to increase our brokerage to $450 to cover an estmate of clawbacks we expect to be hit with for the following year. Again , though, we need to take control of this cost to our business and adjust our revenue streams to maintain our bottom line.

The key though to all of this is service, service & service to our cleints. Trust me the banks are not providing it and clients want it and are prepared to pay for it.

Greg February 18, 2009

To a certain extent I agree with Gary however we have to work together to not see further commission cuts. All Mortgage Brokers need to lift their conversion rate and do as much as we can to get the loan application approved so lenders are prepared to pay us for doing a lot of their work.
However here is a different slant on Broker Commissions. Lenders are asking us to meet certain requirements in regards to our lodgements which are fine but how about the the lenders and their staff who have certain KPIs to meet which we all know are not being met at the moment pay us a higher upfront commission if they do not turn applications around within normal KPI’s if the Broker has done everything correctly. You would see the lenders move very quickly to solve the problems of turn around times and as a good lender/broker relationship part or all of the additional commission could be given back to our clients as an act of good faith to say sorry to our clients for the lender taking longer to approve a loan

Mac February 18, 2009

The Penny must drop sooner or later for brokers.
The banks don’t want brokers any more.
Commissions have been slashed, and their service has gone from poor to disgusting. (I know, I’m a broker)

First and foremost we are here to be, and stay, in business.
You can’t service your client if you can’t stay in business.
Nobody said being in business was easy.

Here is a solution for your consideration.

Use only banks or institutions that pay best commissions
OR
Charge the client a fee, and then rebate the commission.
Clients choose the bank that will give them the most money back via the rebate. (This is my experience)

With that method, You Win, Big four Banks Lose
And
You’re ethical position is unimpeachable because your recommendation is NOT based on amount of commission you’re paid.

PS. Clawback Solution:
Make it the client obligation to repay any clawbacks via your “appointment letter/contract”.

The solutions are simple.
The difficult part is changeing your mind set.

OzBoy February 18, 2009

I love it when brokers talk about lenders, morals, honesty, loyalty all in the same sentence. Look we all know what banks are like so when they actually provide proof of how they are everyone wants to have a little whine. Get over it! You all knew about clawback (yes it sucks and we are the only “commission only” sales people in the world who suffer this) when you got into the industry so don’t complain about it now. As for the comment about charging the client try and get a lender to disburse your fee at settlement…hahahaha, they will for solicitors, accountants etc but our industry is not seen in the same regard as them so therefore they won’t disburse the funds. Times have changed adapt or do something else but these constant posts on forums with tear marks running down the screen are getting tiresome.

George Peat February 18, 2009

I have been a broker for 11 years. Just like everythign else in this life, things come in seasons. Right now we are in a storm, but the storm will pass. Since I start Brokering I have always charged a fee for service and suggest that everybody should start placing value on themsleves and their company and do the same. You can’t get a plumber out to check your pipes without paying a fee, why is that this industry group feels that its improper to charge a service fee, lets get over it and start putting a value to what you do for a living. In regards to commission cuts, it amazes me that people are complaining about commission cuts with certain banks, but still keep the volume nice and high with these banks, what do expect if you don’t change you expect them to, get over it and start lending with a more diverse panel of lenders, otherwise why don’t you just get a paid job with the bank you write all your business with. Pleanty of good non-bank lenders and other smaller banks with great products to choose from, stop taking the easy path of only doing what you have always done and then you might have a good arguement for complaining. Anyway Best of luck 2009.

keepitreal February 18, 2009

oldBroker- get it together you really have no idea !!!

Money Speaks February 18, 2009

The big banks pump so much money and kickbacks through conference support etc into the aggregators that the pressure to write loans to them is insurmountable for many brokers.
Is it any wonder brokers are writing for the big 5.
What about an aggregator that will only take a flat level of equal incentive/support from all of it’s panel of lenders, no matter how big or small.

Paul February 18, 2009

As a senior executive of a major bank I can only laugh at the stupidity of the major players in the broking industry.

Firstly, the larger aggregators did not have the foresight to lock in term commission contracts with the majors when they had the bargaining power to do so. They swallowed the “bank is your business partner” story “hook line and sinker” and many aggregators still believe this myth and peddle it to their brokers. Still generates a load of laughs at our Friday night drinks I can tell you!!

The broking industry could not even get its own representative body to fly - sure there was the MFAA but we hijacked that from day one - what were those other rep bodies called again?? Grab me another beer!!!

The biggest joke is that many brokers hold themselves out be qualified in giving credit advice and yet have ignored a fundamental rule of credit and that is “secure and spread your source of revenue”.

At the end of the day there are very few people within the broking industry that really understand credit risk and business cycles - and for that reason most brokers will simply go back to their old jobs of flogging insurance, photo copiers or even worse (and less lucrative)peddling home loans.

Of course the best of the brokers will develop and build the next big consumer scam (life insurance, financial planning and broking have run their race)and we at the major bank will wait patiently to “partner” with these reborn entrepreneurs.

Bottomline is that it is time for you guys to wake up - stop believing your own hype - brokers were never really needed - and only existed at the mercy of the major banks anyway. Good money has been made by all - and unlike the participants in the big financial planning scam - you can walk away with some shreds of personal integrity still intact.

Good luck to you all

Sincerely
Your Major Bank Business Partner

David February 18, 2009

LOL - I love it.

If anyone is sitting at their desk with blood boiling and nerves twitching then you are one of the brokers the above guy is referring to.

He is quite right guys, create your own destiny and stop whining.

Kym February 18, 2009

Paul,

My impression of you is that you must love the smell of your own @#$%

Seriuosly, there was mention of the main driving force in this market at all, that being the consumer. Its economics 101 mate, the old supply and demand. It’s obvious from your retoric that your qualifications are lacking. Having spent over 15 years in a mjor bank myself, I’m not surprised that you are or have been a major executive. Its that type of attitude that ignores what the consumer wants that gave birth to the broking industry to start with, I mean I’m sure banks did not want brokers 15 years ago, however the consumers wanted service and here we are.

Competetive forces in the market will dictate what the banks do going forward, not what some burn out senior exec thinks should happen.

Good luck with your future too mate

Rob February 18, 2009

Mac……what happens if you rebate the Bank’s commission back to the client and then the clients sells or refi’s and you cop a clawback?

I.E.

$1,500 Service Fee + $1,500 Bank Comm - $1,500 Rebate - $1,500 Clawback = Broker Loses Either Way

There is some risk in this strategy

Kym February 18, 2009

REPOSTED WITH SPELLING ERROS CORRECTED…SORRY

Paul,

My impression of you is that you must love the smell of your own @#$%

Seriously, there was NO mention of the main driving force in this market at all, that being the consumer. Its economics 101 mate, the old supply and demand. It’s obvious from your retoric that your qualifications are lacking. Having spent over 15 years in a major bank myself, I’m not surprised that you are or have been a major executive. Its that type of attitude that ignores what the consumer wants that gave birth to the broking industry to start with, I mean I’m sure banks did not want brokers 15 years ago, however the consumers wanted service and here we are.

Competetive forces in the market will dictate what the banks do going forward, not what some burn out senior exec thinks should happen.

Good luck with your future too mate

Money Speaks February 18, 2009

Why my Aggregator/Broker and the others never sacked the big banks last year escapes me. They were the last ones to come on board and then railroaded the industry to the point we are now at, check but not checkmate.
Hey maybe its time I looked for a new aggregator that doesn’t cowtow to the big boys aye?

leon February 18, 2009

Paul the banker or is it wanker. Hey champ, people in broking, planning etcetc keep your job alive. You have about as much respect as a pimp.
i agree with most, the banks have hoodwinked all in what they have done but one thing is for certain, the cycle will come back.
When it does i guarantee you the guys/girls still in it, will not forget or they shouldn’t anyway.
They will earn more money because they will work smarter, diversifying is one thing but the key is i think, don’t diversify in other banking products, because in 5 years the same will happen.
Spread your risk and next time when the banks pull a stunt like this, we will all be ready.
As for Paul, can’t wait till the next round of retrenchments,banking execs are dispensable aren’t they.

Greg February 18, 2009

As stated previously by me lenders need to be held accountable for not keeping up their end of the bargain as far as turn around times etc. They need to pay for their lack of service as we as brokers are asked to do more and sell other bank products to try an receive a commission that is less than before the commission cuts.
Paul I am an ex banker myself and there are alot of ex bankers that make very good mortgage brokers. I got out of working for one of the majors when branch staff could no longer look after and approve their customers requirements. Most Brokers who are ex bankers got out of working for a Bank because of that. This make us very good at providing service to our clients unlike you. Branch staff cannot even approve a refund of a Bank Fee without the staff member and the customer going through the third degree. Your attitude is typical of a new breed of Bankers who live in an Ivory Tower syndrome and could not live and work outside a Bank environment of having the comfort of a regular income. Paul why dont you come clean with who you are and which Bank you work for. You want to hide behide the Ivory Tower. iwould like to see you try and run your own business in the big bad world. It would be fun to see you flop.It was not that long ago when times where good that Banks loved Brokers because they use to say it was cheaper to pay us a commission instead of having to pay staff and the associated costs. Paul you are not a Banker but a Wanker

Rob February 18, 2009

Paul (if that’s your real name…..we should be able to trace your IP address to see if you really are a bank exec as you say)…….I spent 25 years with 2 majors and left partly because of the de-personalisation of the industry and the ignorance of Senior Management that kept re-inventing the wheel between August and October every year when the restructures and redundancies took place like clockwork …..with experienced retrenched staff happily walking out the door with a wheelbarrow of money, only to walk into the same or other banks door the next week. The amount of times clients would say “who is my Bank Manager this week” still rings in my ears. As a broker I am here to stay, I diversify, I care for and look after my clients interests, and I teach them about wealth creation along the way. My clients invite me into their homes, to their parties, christenings, etc because they see me not only as their trusted adviser and their unbiased outsourced Bank Manager, but as their friend and who WON’T get transferred next year. As a Bank Manager that NEVER happened. People don’t buy from companies…..people buy from people (i.e. Brokers) and the sooner bank exec’s understand that, the more successful they will be. People “ain’t” numbers and don’t wish to be treated as such. Your thought process is exactly why no lender has any more than a 15% share of my clients. I agree there are bigger picture economic factors involved, but a true professional will always prevail.

Take Control Mate February 18, 2009

Garry, I have actually sat in on one of those gatherings at the Lone Star Moshpit, I mean Steakhouse.
It is really quite close to the truth. Brokers are a considered a temporary but necessary evil that will stumble and fall when they become drunk on the godliness of the all powerful, all wise….. blank, blank, blank.
Come on you brokers, get a life and take back control of your business and your life, go to the Temple (Aggregators)turn the table of the greedy merchants and demand they leave his house.
Hey haven’t I read that somewhere…..

Richard Hicks February 18, 2009

Paul,

I just love broker sarcasm……works a treat for me.

Good work.

oldBroker February 18, 2009

Rob… Mac is saying that there would have to be a contract between the broker and the client that, if there is a clawback, then the client must pay it.
Seems Ok… although actually getting the money from the client (since they have probably refinanced with another bank) would be difficult and potentially litigious.

Rob February 18, 2009

Greg…..I applaud you……very superbly put

Rob February 18, 2009

oldBroker……sorry…..that’s what I meant to say…..getting the money out of your client would be difficult

Broker February 18, 2009

What can brokers do now?

1: Stop giving the bulk of your business to the 5 majors. Only use them when necessary due to credit issues. Their service is hideous anyway.

2: Demand that your aggregator remove any lender that further cuts commission and conditions to brokers. No negotiation. Just cut them off the panel. Go and write or call your aggregator now. Do nothing and you’re dead.

3: Do not charge brokerage fees. The banks want you to do this so they can further cut commissions. Ultimately they want you to charge your customers a fee for service and they will effectively offer no commission at all. Calling for brokerage fees (disguised under such terms as ‘fee for service’) is playing into the hands of the money hungry banks.

4: Don’t use Westpac all all. They were the lender that started last years cuts. I cannot believe any broker is giving Westpac the best of their business. I cannot believe the reports that Westpac has record volumes from brokers.

Richard Hicks February 18, 2009

oldBroker

It doesn’t pose a problem at all. The use of a written agreement to disclose all rem matters that includes commission, brokerage & clawback, ensures that clients know from day one that your service is

1. worth something and
2. that they are liable for clawbacks for terminating a mortgage early.

If they want short term finance (<18 months), fine they can have it, but at rates and on terms consistant with the commercial reality of shorter term finance.

If they don’t agree, then I don’t want them as a client as they are in all liklihood, looking to terminate early, thus making them a revenue negative client, which is a client I don’t want.

Sure, it’s a paradigm shift in thinking, but taking control of your revenues is paramount.

Cheers.

Paul February 18, 2009

Glad to see that most picked up the sarcasm and irony in my earlier post.

I am actually a broker but was a senior bank exec in my prior working life.

The attitudes in my post above are a pretty accurate reflection of what my former (major bank) employer thought of brokers and the broker market.

The major bank attitude in this regard can be understood - but it has always been the aggregator thinking that has me mystified - this theory that the Bank’s are our business partners has always been a joke - the Bank’s are suppliers (of money), nothing more - nothing less, and although suppliers should be treated with respect - if they fail to deliver, they should be replaced with another supplier who can deliver (as is the case in any other business).

Aggregators let us down - but in particular I let myself down by not trying harder to seek out an aggregator that had broker interests at the forefront of their business model. It is possible that no such aggregator existed??

Apologies to those who missed the irony in my first post and had to reach for the heart pressure tablets

Cheers
Paul

Ken February 18, 2009

Paul, I used to think that I was good at irony but you have me beat. I was as sucked in as I was when I first saw Les Patterson on TV and thought he must have been a member of Joh’s Cabinet Ministers. Sadly one of the reasons you had me is that as an ex Banky myself it was exactly those attitudes I remember from others at the bank who were not brave enough to leap into self employment themselves but were vocal enough to display thier envy of those who did.
There are some great points made on this page but I think many of you have forgotten that this industry started with only one major bank and we managed. CBA was the last to come in and we managed before they did, and we would manage again if they left.
I for one think that the repuation of banks if anything is even lower now than it was years ago when we all started, don’t forget it is down to the bankers for the current world economic mess, and no broker ever got any bad publicity for taking a bonus that was funded by a tax payer.
What we as a group should do now though is agree to “quietly” boycott one of the majors. As a profession we could group together to say that there is absolutely no reason whatsoever to send any loans ever to ..Westpac.
Not just because they ARE in fact the worst bank in Australia for all the reasons we well know, but because they don’t do one damn thing that can’t be done better and cheaper somewhere else, so they are completely dispensable and have NO niche at all. We need never make a public statement just point out their many many faults privately to our clients and then just avoid them. Lets see what happens then! Join up fellas and lets fight back! Get the aggregaters involved let’s expel them!!

Greg February 18, 2009

Paul you had megoing and you sounded just like a senior exec at the CBA which is the Bank I worked for for over 16 years. All I can say is the years I had in the Bank pre 1194 gave me the grounding that I am using now. Sorry for calling you a wanker. You are like a lot of ex bankers and know that there is a better life outside working for a Bank.

Take Control Mate February 18, 2009

You nailed it Paul… well done.
We were all genuinly brokering deals for our clients before the big banks quietly moved in and snake oiled the bigger aggregators, brokers and some smaller ones. Now they claim victory…. well sorry boys, some of us were’nt duped.
I suspect most of the comments on this page may be very common across our industry and indicative of the dis-content. It will only take one aggregator to stand up and they will gain massive support and growth.

Rob February 18, 2009

KEN….I AGREE WITH YOU….WESTPAC

- GOODBYE TO SHOCKING SERVICE (8 WEEKS TO APPROVE A $20k INCREASE FOR AN EXISTING CLIENT)
- GOODBYE TO MONOPOLISING VIA ACQUISITION OF RAMS AND ST GEORGE
- GOODBYE TO BUYING SIMPLE MARKET SHARE WITH SEXY 3 YR FIXED RATES
- GOODBYE TO CRAP COMMISSION SCALES

WE MUST ALL UNDERSTAND THAT THE MAJORS NOW HAVE OVER 92% MARKETSHARE OF WHICH SOME DERIVE 70% TO 80% OF THEIR MORTGAGES PURELY FROM BROKERS …..BUT…..ONCE THEY HAVE OUR CLIENTS, THEY HAVE THEM……BE CLEVER PEOPLE…..SPREAD YOUR RISK AROUND

Lorenzo February 19, 2009

Wouldn’t NAB/Homeside be the best Bank to boycott? Their latest stunt of higher rates for the broker channel should be the straw that broke the camel’s back.

Grant February 19, 2009

I can understand the aggregators not dropping lenders from the panel. I know it was discussed when Westpac first came out with their reduced commissions, but I have it from a fairly good source that Westpac advised that if they were removed then all trail payments would cease immediately. This would have cause more grief than just keeping them on the panel.

I’m disappointed that, when the Bank’s told us to bend over, the MFAA didn’t even try to intervene. And the aggregators provided the lube, and continue to do so.

Andrew February 19, 2009

Isn’t it amazing how banks will not clawback their own staff if a loan is discharged in the first 12 to 18 months or reduce their salary?
I would say in a lot of cases, the staff would know for sure that the loan will be discharged but of course it does not impact on them so they will write it anyway!

These lowlifes (that unfortunatley have us by the short and curleys at the moment) really have not wanted us from day one. They were forced into it. They still however have not worked out that it costs them much more to put a loan on the books through their own staff than it does through us, yet they still whack us because we are soft taregets. Let the customer pay if they sell their property too soon not us!!

Maria Rigoni February 19, 2009

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Come on board like many others are - share the momentum - application forms are available at http://www.aipb.com.au.

BBB February 19, 2009

Paul , you are nasty piece are you not .
BUT you have one thing right , the aggregators are at best poor performers, who still take Brib*& (opps sponsorships)from the big 5 and at best totally incompetant in the way they swallowed the “we are businesspartners” line from the banks when their contracts could have been so much more to the advantage of their members.

Ther are still lenders who are attractive to deal with and competative with rate , fello brokers - deal with them , and when the BDM for the big guys come in the door , show them which way is OUT.

Lender4Life February 19, 2009

Once again I read the old ” part time broker” excuse used in what is really a rationalisation of our market. Let me make this clear from where I am thinking.
Mortgage Brokers will always be around. Banks can and never will be able to have a “be everything to all” approach to customers, and if you dispute this I know from the first hand of coming out of a bank and non bank enviroment. Banks can create the perceptions but look at ANZ at the moment they have now got out of 95% lending. In fact one of the reasons I believe the real estate market has grown is because in most cases brokers have been able to find loans otherwise wouldnt have been able to be found because of our make-up.
Secondly if you have infrastructure you are in trouble at the moment because cost will break your profitability of your business. Yes I operate from a Bedroom or my Car, but I tell you I bank more than some others with this personal approach through a office. I could not stand anything more than to wait for a client to walk through the door. Talk to any bank manager at the moment , the phone isnt ringing.
I believe that in good time and all markets correct and continue , the trails will increase and the upfronts will come back because if you want market share and you have ” good rates” and “service” brokers will give you business and NO commentator could ever argue that your greasing your wheels. One last thing , the Wallis inquiry that came out in the late 90’s said in one of their reports that our banking system was exposed like any other system in the world and is not “GOVT guarranted” as some might think. Once again great perception , but not entirely truthfull. Lets hope our 3 year govt guarrantee is enough for us.

Broker February 19, 2009

“Grant February 19, 2009

I can understand the aggregators not dropping lenders from the panel. I know it was discussed when Westpac first came out with their reduced commissions, but I have it from a fairly good source that Westpac advised that if they were removed then all trail payments would cease immediately. This would have cause more grief than just keeping them on the panel.”

Grant, this type of thinking is wrong. Westpac should have been cut off immediately by all aggregators. If Westpac replied by cutting trail. So be it. Aggregators then simply file a class action against Westpac and Aggregators continue trading with other lenders at normal commission levels.

Very few other lenders would have the guts to follow Westpac into a class action. They would likely sit back and watch what happened to Westpac. In the mean time Westpac loan applications fall through the floor as 30-40% of their business is gone. Westpac share prices plunge as the market discovers that Westpac is in a legal battle with brokers who represent 40% plus of all new home loans in the market place. Lets use our muscle. Stand & Fight or bend over and you know what.

Even if one or two other lenders were stupid enough to follow Westpacs lead. Our industry would continue strongly. Sure most brokers would take a short term hit to their trail. But as it stands we have all taken a 30% cut in our commission (without so much as a whimper) with rumours of more to follow because our industry is represented by aggregators run by spineless ’sellout’ weeds.

You must be willing to fight for you business or you’ll lose it. Aggregators take a stand. Fight. If any bank threatens to remove our trail we are happy to fight for our business. Let’s take them on.

Don’t allow your spineless aggregator to take another commission cut from any lender. Write to them and demand action.

Louis February 19, 2009

GE Money has just made this announcement

GE Money Business Update - DAF waiver and interest rates

GE Money Home Lending Australia today announced that from 1 March 2009 it will temporarily waive the Deferred Administration Fee (DAF) for its home loan customers to assist them in moving to another lender. This is in response to its inability to pass on any of the recent cash rate cut due to the high cost of funds on the wholesale money markets.

As you are aware, the DAF is a charge payable when a customer discharges a home loan before a predetermined period has elapsed. The maximum period is five years from settlement of the initial loan. This covers some of the costs borne by the lender when establishing the loan.

Borrowers with a GE Money home loan originated through third parties such as mortgage originators, brokers and aggregators will have a three-month DAF waiver period from 1 March 2009 to 31 May 2009 .

If you have any questions in relation to the information in this update, please email service@ge.com

Regards

Lisa Davis

Managing Director

Dan Isaak - www.redilend.com.au February 19, 2009

We’ll this is all too familiar, for years i told various lenders that in order to force brokers to commit to a per month volume there would need to be equivalent treatment. Loyalty is a problem and has been from the beginning of time, in-fact since the biblical best seller, the times when Jesus was betrayed, what do we expect different morals from the banks, as i said they still tie their pens down on their counters still in recession posting billion dollar profits and we cant get a bit of ink. We have known this for years, so why are we shocked, i told a few friends of mine that work for the bank to set themselves up before the banks piss them off because it was coming, they always would say to me,” owe, I’m safe they need me, i pull in x amount per month for them”. We’ll sorry to say but they all have been laid off, even the most loyal employees. And brokers think their going to be looked after. It’s identical to the AFL and NRL sports, and loyal player for many years wants a 1 or 2 yr option to see his career out and gets punted for the new young gun that faces the same demise in years to come. Guys guys guys, we can’t sit here and pretend we never saw this coming and or had trust in the banks. We must always allow contingencies when affiliating with such lenders and have your own back up policy in place should this happen, no point sulking about it as much as you guys are hurting so am i and every other bastard out there, we all are having less sleep and stressing out more how we are going to keep the doors open. and relying on a new industry body to get us out of the crap wont be an option either as they will have enough problems signing up new members to try and pay their own wages for the first 2 yrs. yes its important that we all voice our opinions alike what we are doing now, but more importantly we must come up with a counter offensive, its weird, we are all competition for one another but yet we must remain close, they say you keep your friends close and your enemy’s closer. I think that we need to create a one for all brokers aggregations type of system where instead of joining standard aggregators a new brokers only network is formed that can unite and demand more generosity or we just ALL walk, and I’m serious, if they say no we can go to ho will say yes. And believe you me, when we are approaching a bank in a pack with guaranteed volumes they have never seen since the 90’s they will give their undivided attention. No point paying our aggregators fees to just collect our comms, they are the ones meant to be keeping them honest and they cannot even do that. I mean an offensive consortium that is willing to merge with one another under one agre intro code but we all have our own identities, so we hunt like packs of wolfs, i know it sounds far fetched but unless someone can provide an alternate solution this is all we’ve got. We here at Redilend Australia have offices around the whole of Australia and we hold allot of direct accreditations also, but for how long. We are not fools to think we are immune on this topic and i feel that if we dont speak now we will go down like the better of them and end up working for them on a PAYG basis. So instead, alike the VIC Bushfire appeal, lets get together and do the equivalent for us, A national Brokers appeal for all that cares to stand as one and someone alike starworks or a player geared up to process this transaction take this challenge on. I’m in for one and if anyone else is i would like to see your support and if the numbers come in this will be clear indication that it can be done. So anyone that wishes to join such a regime please send me an email to info@redilend.com.au with your header stating opt in. I will leave this email open for the next 4 weeks starting from today to see if we can get the numbers, if we do, not a problem, i have the people that can make this happen but i need your support. We are going to need at least 100 active brokers the reply, i dont think that is much based on a national level and anything more than that will be a bonus. If this can be achieved we will eliminate any such action from the banks and continue on our ways. So let the vote begin
Regards
Dan Isaak
General Manager
Redilend Australia
info@redilend.com.au
http://www.redilend.com.au
Ph: 1300 85 45 75

Brian Taylor February 23, 2009

When I started in the finance broking business some years ago I had a happy feeling of belonging and this was confirmed by the pleasantries expressed by the BDM’s who, one felt, were always there to help you when you needed it.

Haven’t things changed!

I now feel isolated and alone and cannot get the information I require when I require it. I am buffetted from pillar to post by people who don’t really seem interested in my predicament (now we know how the banks customers feel and why they came to us in the first place).

I am also genuinly concerned at the way that government bodies like DOCEP seem to be targeting brokers and demanding explanations as to why we chose a certain bank for a clients situation - “we helped the client to choose a particular bank because it was the best for them in their circumstances”.

I don’t want to see yet another body set up representing brokers. We have two already and that’s one too many.

I never thought I’d say this but what we all need to belong to is a Union of Finance Brokers. A body that represents us and helps us fight our battles which are becoming far too frequent. A union that resolves issues on our behalf with the lending institutions and does not have representatives of the banks on the committee.

Banks have their physical size, borrowers have DOCEP, we have nothing and are open to abuse.

The union should be in a position to “negotiate” a commission structure that is the same for ALL lenders and therefor eliminates the possibility of brokers being accused of giving business to lenders who offer the highest commissions.

There are many improvements required in this industry - WHEN IS IT GOING TO GET BETTER?

Leigh February 23, 2009

No sympathy here - as a property valuer I am on the recieving end of many a verbal tirade from brokers, generally for no other reason than “I can’t get my deal done” if a valuation does not meet with what the broker wants. I ask for market evidence to suggest otherwise and the verbal bashing continues. In addition I meet countless people who have been ‘pushed’ into certain loans by their broker with no information on the conditions attached.
While I find some brokers quite reasonable and rational to deal with, many think that abuse and sometimes blackmail are suitable tools of the trade. So I will be crying crocodile tears for brokers over this…

Louis February 23, 2009

This is for Leigh

Leigh. It would be useful if we knew your firm so that we could all go easy on you. Obviously you’d rather keep this confidential to protect your job.

Derek Miles February 23, 2009

Leigh, there are bad apples in every box. You can’t tell me that there aren’t some bad Valuers, Solicitors, Accountants, Financial Planners and heaven forbid, Mortgage Brokers. But you are judging all brokers by your exposure to a few bad apples. Only the bad ones are going to act in an unprofessional manner, but what about all the valuations that you do and brokers don’t call you and accept your verdict? I am a professional accountant as well and I know that most brokers are very professional. I also know that there are a few who aren’t. But I don’t call all valuers unprofessional just because I have come across the odd one who isn’t and I can tell you of a few cases where valuers have been very unprofessional with our customers. So maybe I should shed a few crocodile tears when I hear that banks are screwing valuation fees to support their bottom line profit - should I? And as a valuer, what qualification do you hold that allows you to judge whether our customer has been given the right advice or indeed, why have you asked our customers for details of our advice when you should be doing your job and doing the valuation?

Louis February 23, 2009

Well put Derek. I receive many calls from clients saying that valuers were rude and were only in the property for 3 minutes. I had a valuation done on my property where the valuer stated the floor was concrete when in fact was timber. 3 bedrooms when it was 4.Give me a break Leigh.

Broker February 23, 2009

Hey Leigh,

I’ve come across some Chinese people that were rude to me and treated me badly. I was once even short changed when I bought some Chinese food. Therefore I have no sympathy for any Chinese person & would be quite happy if they all lost their jobs or went bankrupt.

No wait, that would be bigoted.

You are geeing us up aren’t you Leigh?

And that verbal abuse you are constantly exposed to. Some advise, I’d suggest some self examination might be useful given the attitude expressed in your comments above. Certain personality types attract abuse & conflict.

As for these “countless people who have been ‘pushed’ into certain loans by their broker” you appear to be running into day after day. No hint of overstatement here????

In reality have you met one or maybe two such people making this claim?

And no doubt you heard these pushy brokers defence against this claim?

A kind and professional manner can usually avoid abuse in life. Good luck with this. Also there is a significant difference between exaggeration and hyperbole.

Harry Buskens February 23, 2009

I suspect that the current controversy about lenders cutting broker commissions is merely the first round in an ongoing exercise by banks and lenders to cut overheads. Banks in particular, have always sought ways and means to increase profitability without having any regard to loyalty or ethical principles. To them, The Dollar is sacrosanct and anything else is irrelevant.

The fact is there wouldn’t even be any debate at all about broker commissions if brokers were to write around 75 - 80% of all home loans.

For a consumer it is an absolute no-brainer to utilise the services of a broker - multiple lenders to select from, literally thousands of products to choose from, easy to understand comparisons between various lenders and products, lending criteria for multiple number of lenders provided at the stroke of a key, professional people to deal with, all the work being done for them, I could go on and on. And I won’t even mention unbiased advice. All that for (in most cases) no charge.

I bet there’s not another service provider that can advertise as many features and benefits for their clients as a Mortgage Broker.

Yet, the sad fact is that approximately 60% of all home loans are still being written by lending institutions directly. I suspect that the reason for this is that the majority of prospective borrowers do not yet understand or appreciate the incredible benefit and value of utilising the services of a broker.

So what are brokers, or those organizations who purport to support brokers, (read MFAA, FBA, aggregators, etc.,) doing collectively to promote mortgager brokers? Regretfully very little. Individually, one broker on his own can do very little.

The future of the mortgage broking industry lies fairly and squarely with those who currently derive their livelihood from it.

No amount of whining, winging, carping or complaining by brokers is going to change lenders’ attitudes towards brokers unless lenders see that they derive substantial and valuable business from brokers. Do you think Westpac would have risked losing huge volumes of business by cutting commissions? Of course not. And they would have lost huge volumes if brokers had been writing huge volumes of home loans.

Brokers are their own worst enemies. Many support and continue to support banks (particularly the poorer paying ones) who have repeatedly shown their utter disdain for us. Brokers’ lack of foresight, not to mention lack of unity, is aiding the decline of the broking industry. Whilst Brokers keep doing what they’ve been doing, (mainly supporting the big 4) they’ll continue to derive the contempt of those who are gleefully working towards making brokers an irrelevant entity. The worst thing we as brokers can do is to stand-by and let it happen.

So, brokers, it is over to you collectively to rally support. Bring pressure to bear on the MFAA, FBA and even your aggregator, to put some money into a campaign that is going to promote Brokers and thereby build your business for a profitable longterm future. Continue to do nothing and and you’ll fade away into nothing - as has happened elsewhere.

I for one would be more than happy to contribute a considerable sum to start such a campaign.

Which brings me to another question, do you feel you are getting value for your membership of your professional organization?

I’ll say it again: The answers to our problems rests in OUR hands.

Bradford February 23, 2009

All the Banks are doing is returning to old habits. Old habbits died hard
In my life experience, the Banks always managed to stuff things up for the customers. Remember 70’s when the then safe Bank got into trouble through bad management. Many of those poor customers lost everything. You have seen many of these stories in the media. This is just been repeated.
You will see great staff in your local branch, suddnely they are gone The word is retrenched. Why, they have learnt to much, and may be able to help the poor old customer.
Banks only see the customers and staff as someone who is to be Bleed.
Paul would be one of those, one day he will realise he was a fool
If a customer can be taught to use the Banks, rather then the Bank using the customer, the difference for the customer is astounding.
It can amount to millions over a life time.
Once brokers have been illiminated, banks will be able to add all those little extra charges like they use to. My 70’s experience applied and got a large loan arrived at the Bank to sign the Docs, and was hit for a very large fee, even by todays standards. I complained, the answer
” do you want the bloody loan or don’t you”.
Do you want to work in this industry or don’t you, the Banks can’t change they have no ethics. Just ask those many thousands who they have dismissed, when they know to much.
In the end it is the Bankers and Financers who have caused this mess.

Brian Taylor February 23, 2009

We all seem to have an opinion but none of us seem to be doing anything!

I agree with Harry Buskens, we need a united front.

When are MFAA and FBA going to stand upto the banks and support their members?

Marcus February 24, 2009

Here here!

Steve H February 24, 2009

Dear Mr. Paul
Senior Executive of a major bank.
You are my (our) HERO. You’re a Senior Executive of a major bank.
Tell all the brokers that are unfit and unworthy of your standards which bank you are with?
I can only dream of being a top notch man like you.
Paul you are a True Blue Australian supporting other Australians in their quest to strive.

Mr. Paul wrote;

Paul February 18, 2009

As a senior executive of a major bank I can only laugh at the stupidity of the major players in the broking industry.

Firstly, the larger aggregators did not have the foresight to lock in term commission contracts with the majors when they had the bargaining power to do so. They swallowed the “bank is your business partner” story “hook line and sinker” and many aggregators still believe this myth and peddle it to their brokers. Still generates a load of laughs at our Friday night drinks I can tell you!!

The broking industry could not even get its own representative body to fly - sure there was the MFAA but we hijacked that from day one - what were those other rep bodies called again?? Grab me another beer!!!

The biggest joke is that many brokers hold themselves out be qualified in giving credit advice and yet have ignored a fundamental rule of credit and that is “secure and spread your source of revenue”.

At the end of the day there are very few people within the broking industry that really understand credit risk and business cycles - and for that reason most brokers will simply go back to their old jobs of flogging insurance, photo copiers or even worse (and less lucrative)peddling home loans.

Of course the best of the brokers will develop and build the next big consumer scam (life insurance, financial planning and broking have run their race)and we at the major bank will wait patiently to “partner” with these reborn entrepreneurs.

Bottomline is that it is time for you guys to wake up - stop believing your own hype - brokers were never really needed - and only existed at the mercy of the major banks anyway. Good money has been made by all - and unlike the participants in the big financial planning scam - you can walk away with some shreds of personal integrity still intact.

Good luck to you all

Sincerely
Your Major Bank Business Partner

Ken February 24, 2009

Paul

If you were a senior executive for a major bank you wouldn’t write such rubbish.

In case you are, your turn will come when the DCM will land on your desk and perhaps you’ll join the broking fraternity.Hope not!

Gehan Gunasekera February 24, 2009

The response reflects the concers we all have, as we watch the wholesale destruction of third party sector. The Banks have relied on the broker network, and have actually reduced their staff numbers, as they expect the brokers to provide the services that they once did. The new strike rate and conversion monitoring is no different to what Banks were doing to their own staff, who they got rid of, and are now turning their attention to the brokers who feed them the business. I understand and so others that Banks need to write profitable business, but part of their costs of doing business is paying for the services of third party service providers. The increase in Bank’s own under paid mobile managers is a reflection of where the market is heading.
Perhaps it’s time that we all educated our clients of the “fair weather friends” policies of the banks that not only apply yo brokers but clients alike.
Aggregators need to be far more proactive in presrving benefits.

jase February 24, 2009

To lenders,banks,brokers,clients and the communtity as a whole,

Being in the finance industry myself, I’m sure we all have seen this coming a long way off and I am facinated with what I have been hearing,reading and seeing. The constant negative commentary and the “poor me syndrome”. I understand that many,of us ,including myself, are experiencing harder times due to the recent uphevals in our industry. I have watched my specialist area be demolished overnight and have been affected greatly by what is going on.We are a community within a broader system.Unless we change our views,opinions and the way we feel towards what is actually happening out there ,IE start being pro-active in bringing about change, we could all be destined for the history books. In my opinion, we appear to be heading down the same path as the american system. Look what mess the’re in

I asked myself what are the positives that can be brought about from our current situation? Take a step back and look at what we do from a different perspective? How can we bring about change? We have allowed ourselves to be confined to a set of rules and boundaries that lets others dictate our own outcomes.Quite often we don’t often know these rules especially when our own system is controlled by outside interests eg LMI.Sure we can set up industry bodies to “represent us” and negotiate, but what is require is a big shift in how things are done. So what is the positive?

The positive is

Design a better system! Now is the time to leapfrog the current situation.

I with others has been developing a totally unique system that is in it’s final testing phase and will be set for open release soon. We will be making it available for all to use and expect it to broaden the “playing field”. A system we believe that will benefit lenders, brokers,customers and the community as a whole.How we do things now could be a thing of the past.

We will have a website uploaded in the coming weeks inviting brokers ,lenders and the community at large to register.Stay tuned

Pad February 24, 2009

I have been a broker for 5 years. i was in the banks and saw how banking restrictions actually hurt people applying for loans due to restrictions placed on loans officers, who are now forced to sell insurance credit cards financial planning . and bye bye to Westpac, Enough is enough loosing docs, 5 weeks for any answers. poor service, I am moving my clients to BMM to get a decent rate and descent commission and no clawback. . (no more banks stealing clients). See you on the other side.

Grant February 24, 2009

Pad, unless BMM are doing differently in your state, I think you’ll find you will have clawback with them. I tend to agree with your other comments though.

What most of us seem to want is decent products and services to sell, which shouldn’t be too much to ask for. Most of us have come to realise, however, is that we have been too trusting of the Banks in the past. We’ve been used as a gravy train, building businesses other than our own.

Well, I’m not bending over any longer. I’ll be directing a much higher percentage of my business to lenders outside the Big 4. Their cartel is no longer an attractive proposition to me.

Ken February 24, 2009

Who is BMM?

Brian Taylor February 24, 2009

SO WHAT ARE WE COLLECTIVELY DOING ABOUT IT???

WE ARE ALL DOING OUR OWN THING YET AGAIN INSTEAD OF WORKING TOGETHER. INDIVIDUALLY WE WILL GET NOWHERE.

WE NEED TO ALL SEND AN EMAIL TO MFAA AND FBA INSISTING THAT THEY ASK MEMBERS TO AIR THEIR PROBLEMS AND GET SOME ANSWERS. ISN’T THAT WHY WE ARE MEMBERS BECAUSE WE EXPECT THEM TO WORK ON OUR BEHALF??

jase February 24, 2009

Brian,

We are finalising a new system that will leapfrog what we have to deal with now.It’s cheap, easy to use and will make life alot easier.

Stay tuned

Peter Bellingham February 24, 2009

The big 4 have taken all they can from brokers and now say bend over its enima time. First lets cut your upfront by 29% and your trail by 40%. what other industry could do this. we provide a service to the banks and they say thanks for that, first we cut your pay and now we steal your client and completely cut your trail.

I saw this in the insurance profession where specialists had their fees cut and cut to a point that they quit. then the workers comp court closed. thats an easy way to save money. I agree with Grant and Pad enough is enough. i now mandate my clients and advise them that if they refinance i will seek compensation for all the work i do. I am not a frigen charity. this is not the Home Loan Information service. and as for Brians statement I couldn’t agree more but what does the MFAA or FBAA do apart from collecting fees and and providing sponsor driven functions and then charging. Jase as some may be thinking it i will ask it “WHAT is this great programme you are talking about” can we purchase it? when can we see it? do you work for a bank. PLEASE EXPLAIN! if i can get funding anywhere except the big 4 i will use it. why give the banks a stick to hit you with.

Peter Bellingham February 24, 2009

BMM is Better Mortgage Management http://www.bettermm.com.au

jase February 24, 2009

Peter.

I don’t want to give too much away as we are at the critical point of testing the system, but I can say it will make life much easier. We have been testing the system within our own business with great success.

Peter Bellingham February 24, 2009

Hi Jase are you and brian taylor together on this as i note his commentsSO WHAT ARE WE COLLECTIVELY DOING ABOUT IT??? WE ARE ALL DOING OUR OWN THING YET AGAIN INSTEAD OF WORKING TOGETHER. INDIVIDUALLY WE WILL GET NOWHERE.

Is this a group action? you mentioned system and your own business so i am assuming you are a broker as well. is there a web site i can go to? are you a new aggregation company?

i’m sorry but your statement reveals nothing. I and many others are looking for alternatives to get our business back into the black. I am open for any suggestions that can improve my business.

Robyn February 24, 2009

I back Peter on this, why so secretive. At lease give us a clue, we are all sick of being treated like mushrooms.

jase February 24, 2009

Peter,

This is not an action group, its a new way in how people get their finance

Peter Buskin February 25, 2009

9 years as a Mortgage Broker. I do mainly home & investment loans & am with one of the larger Aggregator Groups.
Before the commission changes, my upfront payments covered all my outgoings. Trail payments were preserved - it was in effect my “super” & also covered cashflow hiccups (like the occassional, very rare, holiday).
Now I’m regularly dipping into my trail & I don’t like doing this…. Especially when it’s to pay my annual renewals for MIAA or COSL for the simple reason that if I don’t, my accreditations with various lenders will cease. Some of you older brokers might remember “third line forcing” & thats exactly what the MIAA & COSL are doing . From my perspective, they bring nothing to the table & I would happily cancel my Membership if it was possible. Both Groups seem to be a retirement home for old lenders - who couldn’t cut it in the real world.

Peter Bellingham February 25, 2009

I don’t attend MFAA functions. I hear the banks BDMS tell me how wonderful they are without me having to pay for the privilege. PS where do all the fees go? what do we get.

MortgageBroker.com.au February 25, 2009

The mighty MFAA and FBAA. Why do we put All our trust in these organisations (i know thats all we have). Might be a good idea for AIPB to come out fighting as they say, right now and make a stand for the industry.

Most if not all small broking business owners are going to struggle in the coming months and that will be a real shame, however aggregators really do need to support their brokers and not bandy together and compare their balance sheets.

Mortgage Brokers are professional people, they try their guts out for their clients and they have lifted the Finance Industry out of the mire to the satifaction and benefit of the Australian consumer.

Hang in everyone as long as you can, yes it will be a bumpy road ahead but remember all industries are affected. Let’s roll with the punches.

All the best okay!

http://www.mortgagebroker.com.au

Loz February 25, 2009

Is it called MyBank?

Ray February 25, 2009

I would say OLDBROKER of Feb 18 is in fact a NEW BANKER.. too obvious in the reply.

Bankers may have us now, but times will change and revenge will be sweet

Brian Taylor February 25, 2009

This is going to go on and on but are we going to make any progress??
Iam not involved with anybody and think my own thoughts and speak my own mind. For a long time now I have been asking myself, and others, what do we get from MFAA and FBA and no one seems to be able to tell me.
This industry is having major problems at present and we have no one airing our views or supporting us. We should demand new elections to MFAA and appoint people to the board that work for the members - NOW!

Peter Bellingham February 25, 2009

Hi Brian. I would be happy to see that. Imagine an industry body that we compulsory join actually working for the members interests. I had ST george tell me today that the reason they never sent out my client the LODS for 5 weeks is that they forgot. thats it just forgot. her response was oh well you win some you loose some. why is there no service level agreements for the banks to provide the service to the brokers that feed them. If there is a better system out there please let me and other brokers know. As a broker i am graded on my performance with the bank but they F*** up any deal and its a whimsical ” oh well” you can see why i am directing my loans to BMM from now on. lodged monday, confirmation tuesday Valuation tomorrow.

I can tell you what you get from MFAA and FBAA Answer. a tax invoice to pay your compulsory membership or is that membershit. complain complain complain. they have to take your money,bank it, pay their office expenses, wages, organise functions and then charge way above cost so they can make more profit. buy lots of tissues to wipe the brown from their noses as they suck up to the banks. They do a lot for themselves and they need your fees to pay for it. they dont produce anything except new mandatory courses and collect fees and all that kissing of the banks. it probably tires them out.

Question; Does the first Letter in MFAA stand for Mother

Ex Broker February 25, 2009

Perhaps many of you should make the decision I made and get out of broking.

I admire all of the honest brokers who work just about 24/7 days a week for their clients, don’t charge fees (because they can’t really be justified- and you deserve the customer going elsewhere if you do), who don’t abuse valuers, bdm’s and the other associated professionals involved in the transaction.

Who are also let down time and again by the banks in reference to service and now income.

Broking is an industry based upon many people making money out of brokers and in turn many brokers not making a whole lot in many instances.

The main difficulty is that you are selling a product owned by someone else and you don’t really “own” the customer or the referrer for that matter.

You are bringing nothing to the table really other than personality/sales skills, knowledge and availability. The banks don’t care about you or your struggles any more than they care about their own staff (I gone back to a bank and do I feel valued, not at all).

This current situation (WWFC) is changing the face of Australian Finance. When balance is restored to the force, it will be interesting to see what is left of the broking market and how the banks will prostitute themselves the regain broker trust, or if they will care at all.

Or will it all just gone on like it did before?

jase February 26, 2009

Enough with the negative comments guys! Why don’t you look outside the square. Did you know that there are over 200 lenders in Australia and close to 4000 loan products. The major players as we know them only make up approximatley 18% of loans available. Some of the best deals are NOT found within the major players!

If you all want change then answer these questions

Would you support a new system that gave access to all these guys plus the majors.
Actually gives you a more acurate assessment of each client based on a pointscore and banks servicing
Will allow the brokers to deal direct with these lenders and maintain decent commissions(the majority of these guys actually pay commission)
A system that produces a better quality of application for submission
A new independant australian backed owned and operated LMI
Can cut paperwork by up to 70%
And much much more……

PC February 26, 2009

Jase, if you have such a system which you claim you do and are testing it within your own business can you tell us when it will be released etc. I think most brokers would love a system such as this, however will you or the system be able to handle the volume of business you may get or will this system go the same way as the banks when they introduce some new product then fails in it’s back room support.

jase February 26, 2009

PC

All I can say at the moment is that we will be announcing a release date once we have completed our verification process. We have designed our system to handle extremly large volumes in anticpation of the support we believe we will get.

We will be uploading a website shortly inviting brokers and lenders to register.

LCRaider February 26, 2009

Jase, Sounds like you have nothing to sell at this point in time. Why would we brokers listen to someone who says he has a system, yet cannot reveal what it does, when its released, what it costs etc etc. Sounds like you are selling HOT AIR…..Well BLOW IT ELSEWHERE….

There are great systems on the market already that aggregators and brokers use and as someone who currently uses Symmetry,(ive also used Ilend and PLAN at previous aggregators), I can’t see how your NEW TOP SECRET SYSTEM (that you cant tell anyone anything about)is going to compete with any of these well established players.

PC February 26, 2009

LCRaider,I don’t think at this stage you need to be so aggresive towards Jase, he has his reasons no doubt for not releasing info at this stage. I have no idea who he is, what this system is or the background of the company etc, I guess we will have to wait and see.

Question for Jase is, when will it be ready and how do you propose to market it, will you advertise via magazines or what? I am in WA and I find that alot of things from the East are hard to get here as they are not promoted enough, it’s almost as though the East is the only place that matters!!!!!

jase February 26, 2009

LCRaider,

judging by the frustration in your post citing the various sytems you have used, I would believe that you would be a small fish in a big pond. Why all the changes? Are YOU seeing your commissions cut.What is your conversion rate? Are you a player or a stayer? In the current enviroment either we as a whole effect change as a whole or as I stated in a previous post destine ourselves to the history books. But then again some people cannot handle change……Such a shame as the lenders who I have spoken to are excited about the system…..

jase February 26, 2009

PC,

We will start having discussions with Marketing companies shortly to discuss the best way to reach our target markets. We are investigating TV and print media options nationwide.Our system is national based so we intend to market that way. I am playing my cards close to my chest at the moment and will reveal more once the trademarking is completed and intellectual property is protected.

PC February 26, 2009

Thanks Jase, look forward to learning more.

Brian Taylor February 26, 2009

I have been waiting “patiently” for a reaction from MFAA and FBA both of whom need to regain the confidence of the broking community.

Or do they, like the banks, not even care?

They should be reminded that as brokers become more dissalusioned with what is happening and leave the market, their income will diminish!

Probably sooner rather than later they will cease to exist, having no members.

WILL THE LAST PERSON TO LEAVE PLEASE TURN OFF THE LIGHTS!

Brian Taylor February 26, 2009

JASE - CAN YOU EMAIL ME DIRECTLY PLEASE.

PC February 26, 2009

New Name for them, wonder why they did not choose it………!
Mortgage And Finance Industry Association

LCRaider February 26, 2009

Jase, Im actually a growing broker with a very good business model and I have changed aggregators over the last 10 years because I outgrew my previous aggreators. Whats your busines background like in this industry? or are you an outsider trying to cash in on our disdain for the banks?

Take Control Mate February 26, 2009

Just received a conditional approval from one of my non-bank lenders in three days after my faxing (Not Electronic)the application off to them. The rate is in the best four from my analysis, the val is being done this afternoon, the client is blown away and …… I still get the full commission 0.65% and 0.25% trail I am not blackmailed by conversion rates, quality, electronic application and threats of withdrawal of accreditation, plus the BDM from this non-bank lender makes a point of conatcting me and/or visiting me every time he is in my area, I should have given them more support much earlier.

The best thing I did was to clean out the rubbish from my lender panel and get rid of the 5 Amigos. As I said the other day, I now only have 5 lenders on my panel.

I’m in Heaven…….

Stuart February 26, 2009

To Paul, the arrogant senior executive of a bank.

You sound as though you have always secretly wanted to be self-employed but have not had the skill or the guts to pull yourself away from the fat cat salaries of an instituation that is widely despised by the general public.
I personally am too busy writing loans, unlike your branches, to be out drinking and smooching with staff in working hours.

Good luck to you to when you get the tap on the shoulder.

Peter Bellingham February 26, 2009

another day another stuff up by a funder. explanation this time ” sorry we gave to a bum steer and now your client wont get the property as time has run out” Just another nail in the coffin for the big 4.

Jase it seems you have created interest here and i am certainly interested in any new idea that can assist brokers (mainly me). I live in sydney south and would be happy to meet up at a central location to discuss your new system if you are so inclined. mine email is peter.bellingham@gmail.com if you can send me an email I would love to hear more about your system.

if you cant reply now then keep my email until you are ready to release and send me an email then. Thanks

Broker February 26, 2009

LC please shut this blog down. Its turned into a free advertisement for this ‘Jase’ plonker.

For all you desperate brokers, Jase has nothing new. He’s just peddling another software system (more of the same).

Brokers, the best thing you can do is stop putting the majority of your business to the 5 major banks. Their service is crap & they treat you like crap.

And write to your aggregator to demand that they remove any lender who dares to cut commissions & conditions further.

LC, Shut this blog down! Or at least stop sending me the latest entry via email.

Peter Bellingham February 26, 2009

LC please respect his wishes. stop sending them to broker.. Hey broker hit the delete button. That usually works for me …………. ps Whats a Plonker? free advertisement!!!! how many people do you think read this?

jase February 26, 2009

Alas, I have been exposed. Kudos to Mr LCRaider. To be using the symmetry platform means that you are indeed a major player and I respect that. It has been fun seeing the responses and opinions from the various posts.
In regards to the original topic
The only majors my company has ever delt with were the NAB and citibank.I moved away from the NAB after they restructured in 2005 and took business to Citibank. I mainly specialise in the non conforming sector and I have never taken a customer to the other bigger players or their subsiduaries. Where ever possible I try and use lenders outside the larger guys because I found it had to swallow their bullshit and their abborent lack of respect for the client. Maybe I’m just jaded. There are better and more creative ways to make good business (without the need to cross sell) in these times for those of you who are willing to look outside the square. Those who don’t, do so at their own peril and will get aborbed by someone bigger or leave the industry altogether. Ask yourself this question.

What can I do to make this situation better for me and my clients and by this I refer to every person in Australia who has a mortgage.

Hint:there are 197 lenders out there plus god knows how many mortgage managers. All with their own little niche products, some with LMI some not. For those of you who feel concerned about where things are headed,stop reading all the negative crap thats going on and see what really out there.

What I am saying is my business has survived with out the need for our so called “banking partners” for over nine years and I must say more profitable for both me and my clients.

If you really want to make the big guys sit up and take notice, instead of complaining, do something constructive and maybe start a blog for the brokers so we can post advice on who is suppling the best deals service and products.We already know who’s not.
Promote the lenders who are supporting us. Share the knowledge for all to use!

FYI, what we have developed is not another inadequate “CRM” program.
It’s much more innovative than that.We expect to launch in about 14 weeks and no, we are not “selling” you anything. It’s a pay per use system and you keep all of your commission. If you like it you use it, if you don’t, well that’s ok too.You decide.

Cheers

Good luck & Good business

Adios` for now

David February 27, 2009

Well thankyou for not posting our comment.

Why choose which responses you would like to see on the screen. All we do is try and encourage brokers to hang in there and ride out the storm.

I suppose having the MFAA as a regular contributor has its perks.

MortgageBroker.com.au

Mark February 27, 2009

Jase

What i think you’re suggesting has been tried, they were called Majestic Mortgages, and failed. They offerred only non bank products and i’m sure it included quite a few of the 197 lenders you talk about.

And if it’s not the same model, it better be good because you are really talking it up….whatever you are going to do needs to be pretty powerful to pull 50% of loans away from about 3 lenders.

jase February 27, 2009

Mark

thanks for the advice. We have looked at previous models and studied what would work, what might work and what won’t work.We have looked at the current system and looked at how it can be improved to save on time from our side.We have a no exclusion policy when it comes to lenders.Something that’s never been tried before, so we are aiming high on this one.

Robyn February 27, 2009

Today I have had to send off the an application for a client to a 3rd lender. Lender 1 - BDM said they could do the deal. Credit said “sorry outside mortgage insurers guidelines” Lender 2 - BDM said: “We can sign off ourselves, doesnt have to go to mortgage insurer. Then after its submitted - sorry there has been a change in policy (read this to mean SHE STUFFED UP). Lender 3 - Although their Broker Support Team keep assuring me that this product is available for an investor, the electronic lodgement application says otherwise (BIG RED X). Also as he is in the armed services, he doesnt have a normal street address, and this lender will not accept it unless it is a street address. As all his ID and all documents are in the base address I cannot lodge this electronically. So must do manually. Guess what? This lender cuts my commission if I dont lodge electronically. F*****D again by the banks.

Peter Bellingham February 27, 2009

I know how you feel. I have seen AFG and Plan platforms. BDMS that don’t care. we all know banks don’t care. If you find a new one let me know. I haven’t tried fast as yet but i assume if will be the same thing different package. Why doesn’t our industry representative body MFAA get a SLA agreement for the banks. so that when they F*** up they get charged for time wasting. Time is Money. waste a solicitors time you get the bill same with any profession but our time is deemed as less valuable and therefore we can be discarded. Vote with your feet people. WALK ……..the banks don’t care now, but when the world turns, and it will, don’t say Kiss kiss all forgiven. you know you will only get it in the end,,,,, again

Battler February 27, 2009

Winge Winge Winge!

It’s business guys. You are in business to make a profit. Nobody owes you a living!

All lenders are our suppliers. As brokers we sell money. They supply the money. You do have options: work with it, get out or diversify (actually, most likely for a lot you the last option is not an option).

C’est la vie!

jOHN cIMMINO March 1, 2009

Calling Everyone! YOU WILL MAKE $100,000.00

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MESELX:IT&item=260362946780

Brand New Custom Estate Best View In Deluz Temecula, Ca.
Cross Creek Golf Course view in back, city lights from front.
Over 7,000sq.ft. home, 6 1/2 baths 2 separate toilets in master bath,
6 bedrooms All suites, Theater room, Loft or workout room, Game room with wet bar up,
also a wet bar down. Two laundry rooms one upstairs one down, Very custom cabinets
looks like furniture. Entry has duel spiral staircase’s, marble, distressed walnut and travertine floors. Slab granite tops throughout the home. Two– 2 drawer dishwashers, 72″ Sub-Zero refrigerator/Freezer, 60″ double oven Viking range also a separate Micro and Oven total three ovens, four fire place’s one in backyard.Four car Garage. It is set up for Cameras at driveway & front door, cameras on the interior, home automation, lighting control, remote light control via cell phone, remote heat & air via cell phone, remote security via cell phone,
home audio in each room,All network compatible.
Five minutes to the 15 freeway, all this on five acres behind gate.
Also a playground down on lower level of property.
Expected price range $2.2M–$3.2M

Anyone that gives me a lead that sells this house for what I’m asking, I will give them $100,000.00.
Thank you,
John Cimmino

sabina January 8, 2010

While I understand that you have to look after your business, I would never employ a broker that would cut lenders because they don’t pay enough in commission. After all, as your client, I want what’s best for me.

Not saying that Westpac has best mortgage deals but if they do, maybe they don’t need brokers. And if they don’t - keep them on your list of lenders and recommend clients some other lenders, that have better plans.

As a personal note - I am in the process of starting the mortgage chase, but I would expect from any broker that I’d employ, to present me with his commission (and soft dollar) details accompanying any of the recommendations.

Working in similar kind of brokerage industry where we live off commission only (not mortgage, service utilities), I can quite simply say what we tell our clients - we offer a range of service providers, but they are limited. If the customer wants a service provider we do not support, we give them the phone number and even transfer a call. Clients appreciate the honesty and come back next time. Woth mortgage it might be different, don’t know.