A squeeze on interest margins and higher costs hit credit unions’ profits in 2009 as they felt the brunt of the big banks’ pricing power.

Despite putting up a fight for retail deposits and growing their home loan books, the profit margins of Australia’s 100-plus credit unions fell 2.2 per cent to 13.2 per cent during calendar 2009.

Figures from a report by the Australian Prudential Regulation Authority released on Tuesday showed credit unions’ net interest margins (NIM) shrank by 0.5 per cent to 2.5 per cent over the 12 months to December 31, 2009.

Building societies’ NIM remained flat at 2.3 per cent.

Credit unions’ cost to income ratio climbed 3.6 per cent to 80 per cent, while their aggregate return on equity fell 1.9 per cent.
Full Story

Australasia’s largest real estate and property group, Ray White, has reported a 20 per cent improvement in its residential and commercial sales results in Australia and New Zealand for February, 2010.

Ray White Chairman Brian White said preliminary figures showed the group in February achieved total sales of $2.310 billion, compared to $1.934 billion in the corresponding month in 2009.

“After a slow start to the year we have had a very strong month in February,” Mr White said.

“The market appears to be absorbing the interest rate rises we have had although we are not quite experiencing the sort of gains that we were achieving towards the end of 2009.”
Full Story

Three more banks could face investor concern over flawed mortgage outsourcing deals with Perpetual Ltd that give rise to confusion over who has the legal authority to complete the transactions.

An analyst says that Perpetual could lose as much as 10 per cent of its revenue if all three banks, National Australia Bank, AMP Bank Ltd and Bendigo and Adelaide Bank - in addition to ANZ Banking Group Ltd - drop their business with the fund manager over the flawed contracts.

Perpetual on Monday confirmed that National Australia Bank’s (NAB) HomeSide mortgage lending unit, AMP Bank and Bendigo and Adelaide Bank Bank outsourced the processing of mortgage applications to its mortgage services business.

Credit Suisse analyst Arjan Van Veen said in the unlikely event the banks broke their outsourcing contracts with Perpetual over the issue, Perpetual’s total revenue would drop by 10 per cent.
Full Story

New data showing weak lending finance is evidence of an economy slowing after the government stimulus has worn off and could spare borrowers an April interest rate rise, economist says.

Total personal finance commitments fell 1.5 per cent in January, seasonally adjusted, to $6.921 billion, from $7.028 billion in December, the Australian Bureau of Statistics (ABS) said on Monday.

The fixed loan component of the data fell 2.1 per cent, its fifth straight monthly fall since August 2009.

Fixed loans - or loans of a fixed amount - make up 46 per cent of total personal finance commitments.

CommSec economist Savanth Sebastian said the data pointed to a slowing economy and could be enough to stay the Reserve Bank of Australia (RBA) from raising the cash rate from four to 4.25 per cent.
Full Story

Mortgage provider RAMS Home Loans has joined with real estate data provider Residex to give property investors access to residential sales information.

Westpac-owned RAMS said the partnership would allow prospective investors to access Residex reports once they identify what suburb or suburbs they are interested in.

The reports include information such as median sale price, median rent, historical and predicted growth as well as a list of current properties for sale.
Full Story

Top industry performers were congratulated at the Mortgage and Finance Association of Australia’s (MFAA) annual Excellence Awards held at the Westin Hotel, Sydney, on Friday night.

“This special occasion gives our members, their colleagues and peers the opportunity to celebrate those this year’s industry high achievers,” said Phil Naylor, CEO of the MFAA.

There were 16 award winners on the night, four which were awarded to outstanding individuals and 11 awarded to top performing companies. The most prestigious award, Operator of the Year, was awarded jointly for the first time ever to Horizon Financial and Mildura Finance Limited who were judged as the best from 13 of the categories.

The MFAA congratulates all finalists and winners of the Excellence Awards.
Full Story

Market leading non-bank financial services group, Aussie, has launched an exciting promise to customers that if they are not impressed by an Aussie broker’s service they will be paid $100.

The “Aussie Promise to Impress” builds on Aussie’s reputation for offering customers highly personalised mortgage broking service which translates into a better deal by meeting their needs.

Aussie’s founder and executive chairman Mr John Symond said the Aussie Promise was targeted at customers who are interested in using a broker or bank customers looking for a reason to switch in order to get a more personalised service for their home loan needs.
Full Story

LJ Hooker’s financial division supports industry organization, MFAA’s move toward encouraging its members to become fully qualified professional credit advisers.

MFAA’s proposed framework of tiered professional qualifications will see brokers qualify for a Certificate IV in Financial Services.

LJ Hooker Financial Services General Manager Peter Bromley says this level of qualification is already built into the division’s performance standards for its brokers.

“All our current brokers meet Certificate IV standards, which means they complete 30 hours of CPD a year, have a conversion ratio of 65 per cent, accreditation with a panel of at least 10 lenders and settle at least six loans per quarter.
Full Story

Many would-be home buyers have given up the dream of home ownership, hit by a triple whammy of rising interest rates, tougher lending conditions and an end to the federal government’s more generous grant.

A survey by mortgage broker Loan Market found 28 per cent of respondents said they had put off their home buying plans indefinitely, while 32 per cent said they were trying to save for a larger deposit.

The online survey of 260 potential first time home buyers found 33 per cent of respondents were still looking to buy a property this year.
Full Story

Investors have returned from summer holidays to grab their largest share of housing loans since at least 2004, according to a survey by a mortgage broker.

Australian Finance Group (AFG), which claims over 10 per cent of the mortgage market, said on Tuesday that 34.1 per cent of all mortgages it arranged nationally in February were for property investors.

That was the highest proportion for investors recorded in the six-year history of AFG’s survey of its brokers’ activity.
Full Story

Potential first homebuyers are giving up their search each time lenders hike interest rates on home loans.

Within three days of the Reserve Bank of Australia lifting the official cash rate by 25 basis points to 4.0 per cent last week, 26 lenders had passed on interest rate rises on 175 home loan products, according to financial comparison website RateCity.

That prompted two per cent of potential first home buyers to halt their search, according to Australia’s biggest mortgage broker, Mortgage Choice.

Another three per cent would withdraw from the market if interest rates climbed another 75 basis points, Mortgage Choice said.
Full Story

By Jill Fraser for Lending Central

As of last week National Mortgage Broker (nMB) brokers have an exclusive nMB-branded loan to offer borrowers.

The suite of ‘‘nMB Direct” loans - variable, fixed and packaged - is the result of a marriage between the aggregator and The Rock Building Society.

The irony of nMB establishing a partnership with The Rock just weeks after Heritage Building Society withdrew from its lending panel, has not escaped nMB managing director Gerald Foley.

He chuckles wryly and refers to The Rock’s “progressive” approach versus Heritage’s defeatist approach (my expression not Foley’s!) as exemplified by its decision to retreat from the broker space and give a number of brokers the flick.
Full Story

The last two of the big four banks have stepped into line with their peers and matched the interest rate rise by the Reserve Bank of Australia (RBA).

Both National Australia Bank Ltd (NAB) and Westpac Banking Corp announced on Wednesday they would lift their standard variable rate on home loans by the same extent as the RBA’s quarter of a percentage point increase on the cash rate.

NAB also said its strategy of matching the RBA previously has led its mortgage volumes to soar.

Group executive personal banking Lisa Gray defended the bank’s retail strategy of maintaining low interest rates and cutting fees, saying NAB had experienced a surge in mortgage applications in February.
Full Story

Housing commentators have warned that more rate rises are to come after the central bank increased the cash rate on Tuesday .

And if banks pass on the full rise, homeowners can expect to pay an extra $47 each month on an average $300,000 mortgage, they say.

The Reserve Bank of Australia (RBA) raised the cash rate by an expected quarter of a percentage point to 4.00 per cent, the highest since February 2009.

Mortgage Choice senior corporate affairs manager Kristy Sheppard said more rate rises were likely this year.

“Look at this increase as a taste of things to come for 2010,” Ms Sheppard said in a statement.
Full Story