Bill October 2, 2009

Government needs to regulate and put some more bite behind their words when you have the Big Four being this BIG! It puts the consumer and smaller lenders at risk of unfair practices.
But we know it won’t happen as the rich hold the power and the government is just a pawn in this Chess game.
Time to brush up on my game to try and keep up…

Keith October 2, 2009

Now that’s what I call the promotion of competition!!!!!!

In another 2 years time the big four banks share of the mortgage market will be even greater. And I would then hazard a guess that the big four banks will be increasing their margins. They will increase their interest rates far in excess of RBA increases until they are back to their heady old days when there was no competition at all.

How does this protect the consumer????

The only way will be for the consumer to start buying the big four bank shares. At least that way they will enjoy the dividends.

Keith

brizbroker October 2, 2009

No Keith, buying shares isnt the only way - a few hundred shares wont compensate clients for 20, 30, 40basis points increases outside RBA when they come along-and they will if this keeps up. And customers buying bank shares certainly wont compensate or protect brokers or aggregators from 10, 20 basic point further cuts to commissions or trails, or both. I remain astounded at all the complaining and criticism of majors when theres a perfectly valid solution smacking us all in the face. The way to go about it is to stop handing them all the business. Its been the way all along. It remains the way. There continues to be people on here who say they dont write major bank loans but yet another month of data suggests they are almost alone, so small is their minority. Yet again, the big 4 controls over 95% of the business written in the last year and a bit. And the big 2 has 85%. CBA and WBC now control over 50% of all mortgages ever written in Australia. In a year that will be significantly more. when oh when will we realise that this lack of support for the alternatives means we’re screwing ourselves and our customers in the long term? Support the tier 2 banks not already owned by the majors, such as ING and Suncorp and the strong non bank lenders, Resimac and Firstmac. Its really quite simple. Ignore that advice and watch what happens. There’ll just just more and more control exerted over us all by the big boys, until all we are are super cheap, highly profitable distributors for them.

Kane October 4, 2009

With Lo Doc all but dead and the new credit laws ,glad I stayed away from becoming a mortgage broker.
Sounds like a no where place to be,all those secret comissions.

BBB October 5, 2009

This is the time to be a broker!!!!! there are still lo doc deals and alterenatives out there, at competative rates, brokers can be a catalyst to see some competition restored, inform your clients of the choices avaliable.

We really do have an enomorous amount of power in the market place , USE IT.

Kevin October 6, 2009

I predict the margins enjoyed by the big 4 will come down over the next 2-3 years. At the moment, there’s little competition as it’s still expensive to tap the RMBS market, particularly if you can’t match the credit rating of the big 4. Once the debt market returns to normal pricing, the second tier and non-bank lenders will then start to make inroads again. Until then, the big 4 will maximise profits and increase market share. This happens every time there is a recession (or almost recession).

At the moment, we write the majority of our new business to the big 4. It’s not just price, but also service and the lender’s willingness to accept security outside capital cities that is an issue. When you’re 1000km from the nearest capital city, there are a lot of lenders that are either just not interested or want larger deposits. In these cases, the big 4 are the best for our clients. There have been times when we have been limited to only one lender due to postcode restrictions.

We will go back to using non-bank and second tier lenders, but they have to come back to being both competitive and available in our market before that starts to occur in greater proportions.

Meanwhile, my bank shares have recovered nicely and the dividends have only had a small reduction after decades of consistent steady growth.