By Jill Fraser from Lending Central.

Is FirstMac’s Chief Executive Officer, Kim Cannon emerging as the brokers’ champion?

Not long ago he issued a warning about banks playing with commissions and broker loyalty. Now he’s committing to ease brokers’ suffering brought about by “the credit hold-up handcuffs the banks have the industry in” by guaranteeing a 24-hour turnaround of loan applications.

Is there an agenda? Of course there is. FirstMac along with all other non-bank lenders have been doing it tough and Cannon needs brokers’ business. But that doesn’t dilute the message.

Hearing brokers voice their grievances at the MFAA industry round table and watching the banks “turn around and tell them, you’re the problem” infuriated him.

He admits to Lending Central that it’s a hard battle re-building the non-bank brand from the ground up after so much damage has been done by “thoughtless” companies like GE and that he is trying to rally other non-bank lenders to present a unified front.

FirstMac’ second AOFM-assisted RMBS deal has freed up its warehousing and the second-tier lender is ready to move forward with new loans and backing brokers is an important part of the equation.

“At the industry round table a few weeks ago I listened to brokers complaining about the banks’ service and banks complaining about the quality of applications from brokers,” he says.

“I walked away and thought, service is the banks’ weak point at the moment. So I came up with a campaign called ‘FirstMac Is Open for Service’ and I’ve been trying to push the idea of service as a rallying point for all non-bank lenders and funders.”

Cannon is encouraging non-banks to come together as a unified force around the concept of service.

He says a packed room at the last MFAA Mortgage Manager sub-committee meeting (30 to 40 attendees as opposed to the traditional zero) was a good sign.

“We’re ready, willing and able to process loans and brokers have to start becoming proactive and telling people that non-banks are a viable alternative,” he says.

While he empathises with the frustrations of quality brokers Cannon is annoyed at brokers “who are supposed to be sales people but in fact are just order takers”.

“They go into Mum and Dad’s lounge room and say, who do you bank with? Okay sign here this is the best loan from your bank.

“A lot of brokers have been getting paid appearance money just for turning up. They’re not doing the true job of a broker and recommending the best deal,” he declares.

Asked if he thinks that aggregators are doing their job and standing up to banks on behalf of brokers Cannon says, “over the years aggregators have built a fantastic distribution channel and they have huge buying power; it’s time they started using it”.

He says the problem is that aggregators have boxed themselves into a corner by choosing to downplay the significance of the non-bank sector.

Asked to comment on Vanilla Loan’s fee for service model (FirstMac is one of the funders) Cannon says, “in times of tough markets out comes innovation”.

“We’re at the most creative point in the market at the moment because people are trying to innovate in order to adapt to market conditions and get their heads around what the new world will be.

“Vanilla is doing something different and immediately everyone is up in arms saying it can’t be done and why should it be done? My question is why not?”

Cannon points out that the current home loan market was born out of a troubled market in the late 80s.

“We were doing commercial lending and suddenly it dried up and next minute we had to innovate, which led to the home loan market,” he says.

“So while people are critical of what is going on the world is changing and whether you agree or disagree it’s about innovation and evolution. We’re all learning to adapt and at the end of the day the big winner will be the consumer.”