The timely collision of low interest rates, government incentives, shrinking non-bank lender market share and a first homebuyer surge is pushing mortgage applications and lender processing times to higher levels. Potential borrowers should be aware of this and understand there is a wide array of lenders and loans in the market. Full Story

Australians say they will have far greater confidence investing in property than in the share market during the coming year, a national survey has found.

An online poll conducted by Australia’s leading independent mortgage broker Loan Market Group found 40 per cent of respondents said buying a property was their financial priority for 2009.

In contrast, just six per cent of those surveyed said they planned to invest in the share market this year. Full Story

The latest Mortgage and Finance Association of Australia (MFAA)/ Bankwest Home Finance Index promises a
brighter year for brokers, with indications that more first time buyers will enter the market and younger people will prefer to use brokers as the source of their loan.

“Over half of all first time buyers believe that now is a good time to buy a home. The encouraging thing for brokers is that this group are also more likely to visit a broker for information and to source their loan,” said Phil Naylor, CEO of the MFAA. Full Story

Aussie Home Loans has reached agreement with GE Money to acquire Wizard Home Loans for an undisclosed sum.

The business to be acquired includes the Wizard brand, its franchise distribution network covering over 160 outlets in city and regional areas around Australia and over 300 mortgage advisers.

The acquisition will mean Aussie will have a broader spread of franchised and corporate outlets and more than 800 mortgage advisers nationally.

As part of the acquisition Aussie’s 33 per cent shareholder, The Commonwealth Bank, will re-finance up to $4 billion worth of Wizard-originated home loans.

Executive Chairman of Aussie, Mr John Symond, said “The acquisition of Wizard accelerates Aussie’s growth initiatives, adding a significant retail channel and distribution capability to our existing operations.

“This acquisition will provide customers with greater product choices, heightened service levels and the benefits of having a major non-bank player in the mortgage, credit card, insurance, car and personal loans market competing against the major banks”, he added.

Aussie will be providing Wizard franchisees with a greater product range, more security and support. Aussie will also supply its marketing, training and technology systems to help them grow their businesses. Wizard chairman, Mr Mark Bouris, will be retained as a key adviser in the combined business.

Mr Symond said, “Wizard has been a leading non-bank player for more than a decade and Mark Bouris has been a very strong consumer advocate. We share great brands and will assess their continued use as we go forward as a stronger group with a powerful, combined sales and marketing force and product offering”.

Mr Bouris said, “This is great news for the consumer, particularly given the shrinkage of the non-bank sector. The combination of these two powerful brands will enhance market competition and choice”.

CNBC grills Jay Dhru, head of financial institutions ratings at Standard & Poor’s over their role in the recent collapse of AAA rated debt instruments and the worldwide credit crisis.

More importantly they ask the question “If you were so off on the initial rating how can you be certain of the new ratings that you’re handing out?”

Click here to watch the video

UK bank Lloyds TSB will compete aggressively in Australia after taking over the British parent of HBOS Australia and its wholly owned retail bank subsidiary BankWest.

Our company will now be part of one of the strongest banks in the world,” HBOS Australia chief executive David Willis said in a statement today.

“We will continue to provide strong competition in the Australian banking market and providing real choice for Australian businesses and consumers.” Full Story

The US financial sector crisis makes further official interest rate cuts more likely, but not because the Reserve Bank of Australia (RBA) is fretting about the stability of local financial institutions.

The accounts of Australian banks are in good shape, with exposures to the sub-prime loans fiasco in the US very low and no significant equivalent problems in the local economy.

Figures hot off the presses from the RBA show impaired assets - basically loans gone bad - stood at one third of one per cent of total assets, slightly below the long-term average. Full Story

Australian banks have kept their exposure to bad loans to low levels, unlike their US counterparts, new figures show.

The latest Reserve Bank of Australia (RBA) data today revealed that the The ratio of bad loans to total assets rose marginally from 0.31 per cent to 0.36 per cent in the June quarter.

An impaired asset is a loan with principal and interest unpaid for at least 90 days, unless the lender has adequate collateral. Full Story

St George Bank says it will cut its one-year introductory fixed rate and one to five-year fixed interest rates by as much as a quarter of a percentage point.

St George customers from Monday September 22 will save 0.15 percentage points from the bank’s one-year introductory fixed rate, which has been cut to 8.54 per cent, while the non-introductory rate for the same term has been lowered by a quarter of a percentage points - also to 8.54 per cent. Full Story

Prime Minister Kevin Rudd says Australia’s financial institutions are still in a better position than overseas counterparts to weather the global credit crisis.

Bank stocks dragged the Australian share market down at noon as the bailout of insurance giant American International Group (AIG) failed to calm global markets.

“The advice of the regulators is still that Australia’s financial institutions are in sound shape, that the order of their balance sheets is strong,” Mr Rudd told reporters in Canberra. Full Story

Speculation that the Reserve Bank will cut official interest rates in September is growing. If, as many economists anticipate, this happens, it will be the first cut in nearly seven years, which is a clear indication that the economy is slowing.

The million dollar question is whether commercial banks will promptly pass the cuts onto consumers in the form of lower lending rates.

The jury is still out on the matter as Lending Central learned when we spoke to three prominent economists, Michael Pascoe, Professor Fariborz Moshirian, University of NSW and Professor Joshua Gans, University of Melbourne Business School. Full Story

Leading Australian mortgage broker Mortgage Choice Limited (ASX code: MOC) today announced a net profit after tax for the year to 30 June 2008 of $19.3 million AIFRS, representing a marginal decrease on the FY2007 result of $19.6 million.

Highlights (Unless otherwise stated, all figures quoted are based on AIFRS*)

• Net profit after tax of $19.3 million, representing a marginal decrease on the FY2007 result of $19.6 million.
• Loan book stood at $33.27 billion at 30 June 2008, up 12.2% on the $29.64 billion balance in FY2007 and ahead of system growth of 10.1%.
• Total revenue of $161.4 million, up 2.7% on prior corresponding period ($157.1 million).
• Earnings per share stood at 16.4 cents per share compared to 16.6 cents per share in FY2007. Full Story

An early interest rate cut might be needed to ward off a deeper economic slowdown, with scope for a less restrictive monetary policy increasing, the minutes of the Reserve Bank of Australia’s (RBA) August board meeting say.

The RBA left official interest rates on hold at 7.25 per cent on August 5 for the fifth month in a row.

But the minutes of that board meeting, released today, indicate the central bank saw the case for a near-term rate cut.

“Indeed, less restrictive conditions could soon be called for, otherwise the risk of a deeper and more persistent slowing in the economy would increase,” the minutes said. Full Story

HSBC Bank Australia has cut its fixed home loan mortgage rates, citing a recent fall in borrowing costs.

The biggest reduction was to the bank’s three-year fixed rate for new customers, which has fallen to 7.99 per cent, from 9.29 per cent previously.

HSBC Australia head of home loans John Lane said the reductions would provide welcome relief from recent increases in variable interest rates. Full Story

The retail banks must pass on “every single cent” to their customers if the Reserve Bank of Australia (RBA) cuts the official cash rate, federal Opposition Leader Brendan Nelson says.

Economists are widely tipping a move by the central bank as early as next month, but the retail banks are not guaranteeing they will be able to pass on the benefit of lower rates to their customers.

Dr Nelson said all the indicators suggest the economy has slowed “quite significantly”, a trend the RBA has noted.

The central bank has signalled it is in a position to lower rates. Full Story