Communique from MFAA industry roundtable
22 representatives of broker groups, mortgage managers and lenders (bank and non bank) met on April 28, 2009, under the auspices of the MFAA, to discuss industry issues, including lender service levels, broker submission quality and competition. The robust discussion was professionally moderated by Peter Switzer.
This meeting was the first of its type and the MFAA is proud to use its leadership role to bring the industry together and facilitate this unique event in which all who participated represented the vast majority of MFAA’s 13200 membership.
The meeting acknowledged that many of the current concerns of the mortgage and finance industry had resulted from the unique coincidence of the following circumstances:
- First Home Owners Boost
- Low interest rates
- Material decrease in lenders operating in the market (it was noted that 92% of home loans were currently being transacted by five lenders)
It was acknowledged that while these circumstances are seen as ‘short term issues’ they had significantly impacted on lenders’ ability to maintain service levels, which was exacerbated by an increase in their need to re-work large percentages of loan submissions, especially FHOB loans.
Lenders acknowledged that the above circumstances had put enormous pressure on their service levels but they all had increased their processing resources massively to cope with the extra demand.
The meeting agreed that lenders and brokers, as partners in the loan distribution chain, would take the following steps to improve service to borrowers:
- Lenders will continue to do all possible to ensure demand levels are being met by upgraded resources in loan processing and that there is comparability in service levels between broker and proprietary channels
- Lenders will provide clear communications as to the service levels and provide updates where those levels change
- While it was recognised in the current circumstances there may be the need for lenders to amend credit policies quickly, lenders agreed they would provide as much notice as possible of such changes
- Lenders will provide broker groups with detailed data as to re-work and error rates
- Broker groups will institute training to remedy re-work issues and error rates
- Broker groups will ensure brokers are provided with adequate information (based on data from lenders) to ensure borrowers are not given unrealistic expectations about loan approvals
It was agreed:
- lender and broker representatives have a mutual interest in ensuring high quality service to their customers, and are aware of the need to protect their respective brands;
- lender and broker representatives understand and commit to mutual support of each other to this end;
The meeting considered the initiative by the Federal Government on deposit guarantees for ADIs, and while recognising the importance of such in the current economic circumstances, the meeting emphasised the need for the Federal Government to take all possible steps to continue to encourage and promote greater competition in the mortgage and finance industry in the best interests of Australian consumers.
The meeting resolved that the Roundtable had been extremely useful and that similar Roundtables should be convened utilising MFAA’s unique broker and intermediary representation and access through its membership to all significant bank and non bank lenders.
It was agreed a further meeting would be convened in 3 months to review the impact of the understandings reached today.
PHIL NAYLOR
MFAA
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Ted May 1, 2009
It would have been interesting to find out from the major banks just what percentages of business is being directed via their branches and brokers - particularly after they have all shifted the goal posts.
As another aside, I have not had a visit from a BDM from the major banks in the last 6 months.