By Jill Fraser for Lending Central

Kathy Cummings, Executive General Manager, Third Party Banking, Commonwealth Bank recently sat down with Lending Central and outlined her views on the relationship between brokers and the CBA.

KC: Brokers in Australia are in a very good position. They have strong businesses and strong business partners.

(In comparison) look at the broker industry in the UK, which is in tatters, the broker market in New Zealand, which is in poor condition and the fact that there are no brokers any more in the US.

LC: How do you explain complaints from brokers about being discriminated against by banks, including the CBA?

KC: Those comments are very immature.

The CBA is the biggest supporter of brokers in this market and brokers should value that.
Full Story

The vast majority of brokers now recognise the importance of offering clients additional value-added products when writing a home loan, a new survey has found.

The findings, revealed in the Choice Aggregation Services (Choice) 2009 member survey, re-affirmed the recent industry shift towards a diversified service offering and brokers’ drive to better client servicing.

On overwhelming 81.5 per cent believed that it was appropriate to offer clients additional products while just 10.8 per cent of members surveyed believed it was not; 7.7 per cent were unsure.

Brendan O’Donnell, CEO of Choice, said that the result aligned with the aggregator’s ongoing focus to empower broker diversification.
Full Story

By Brendan O’Donnell, CEO, Choice Aggregation Services for Lending Central

Brokers wield immense power; we just need to realise it

The past few weeks has been dominated by headlines concerning the decision by certain lenders to introduce a number of new requirements that clearly fly in the face of competitiveness.

The key issue are the penalties imposed by banks in the form of re-accreditation fees for brokers that don’t meet minimum volume requirements.

I feel I don’t stand alone in my belief that the decision to influence brokers’ behaviour through implementing minimum deals criteria and financial penalties runs against the core value proposition of a broker’s unbiased stance and it is a detriment to the broker distribution channel’s overall proposition.
Full Story

By Jill Fraser for Lending Central

In our continuing series on aggregators PLAN Australia CEO Ray Hair told Lending Central that a win/win situation between banks and brokers is possible. But first the conspiracy theory that banks are working against brokers has to be debunked.

“There is clearly a perception within the broker industry that banks are either favouring the branch network and/or the direct channel over indirect,” says Hair.

“This has been born out of history - a lot of brokers are ex-bankers who worked in banks when they were less broker friendly and continue to project this historical perspective - plus the fact that the marketing arms of all banks are trying to drive customers through branches.”

But banks pushing for effective and efficient branches does not automatically mean wanting to eliminate the broker channel, he says.

Hair believes that some brokers have developed a persecution complex.
Full Story

Dodgy lenders and shonky financial advisers have been put on notice by the federal government with new consumer credit protection laws set to come into effect in November.

Superannuation and Corporate Law Minister Nick Sherry says that under the new rules all mortgage brokers and lenders must be licensed and will face criminal and civil penalties for irresponsible lending.

But banks, credit unions and building societies say the new laws are “heavy-handed”, imposing red tape on responsible lenders which could result in higher loan fees and a longer wait for loan approvals.

Unveiling the draft National Consumer Credit Protection Bill on Monday, Senator Sherry told reporters license holders would be responsible for assessing the suitability of a loan and for verifying a borrower’s ability to pay.
Full Story

Life for Gary Smith, director and founder Aussiewide Financial Services, has changed dramatically over the past 12 months.

The Geelong-based broker’s business has undergone a 35 percent cut in income and like so many other brokers who see themselves as victims of lenders’ ruthless commission slashing strategies, he is concerned about rumoured further cuts.

Cuts to brokers’ commissions has always been on the cards but Smith was convinced that if this did occur only part-time brokers would be affected.

“I thought they would have looked after brokers who put in good, solid business but I was wrong in my assumption, he says.
Full Story

“One voice for brokers” is the catch cry of the spokesperson for the new industry body for brokers, Maria Rigoni, finance broker and director at Universal Wealth Management.

There has been an overwhelming response to the announcement that the new organisation, the Australian Institute of Professional Brokers (AIPB), has been registered with the ASIC.

Lending Central spoke to Rigoni about the role and goals of the AIPB.

Full Story

Australia’s largest independent mortgage broker believes 2009 will be one of the best years in history to venture into the property market.

John Kolenda, Executive Director of Loan Market Group, said the combination of low interest rates, softer property prices and government incentives made the housing market particularly appealing, especially for first time buyers.

Loan Market Group, which includes retail mortgage brands Loan Market, X Inc and realestate.com.au Home Loans, is launching a television campaign for the Loan Market Brand to highlight the many opportunities available in the housing sector.
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

The Mortgage and Finance Association of Australia (MFAA) today hit back at claims by consumer group CHOICE that consumers bypassing mortgage brokers can get a better deal.

The Association also challenged CHOICE’s assertion that mortgage brokers are focussed on securing commissions, rather than working in the best interests of consumers.
Full Story

Australia’s peak consumer advocacy group, Choice advises borrowers to bypass mortgage brokers when refinancing their loans if they want to shave thousands of dollars off the total.

A Choice report, which looked into the refinancing of home loans, has found that by avoiding mortgage brokers three typical borrowers could save between $18,000 and $46,000 over the life of their loans.

Choice asked three borrowers to shop around for a better deal on their mortgage. The study revealed that the best savings came by switching to credit unions and the online subsidiary of a major bank. The respective deals were unavailable through brokers.
Full Story

The leading industry body for the mortgage and finance industry, the MFAA, today hit back at suggestions that mortgage brokers have played a role in the rise of home loan arrears.

“Mortgage brokers are not responsible for the increase in mortgage arrears, as it is the responsibility of the lender to approve home loans recommended by a broker,” said Phil Naylor, CEO of the MFAA.

“While brokers need to assess an applicant’s ability to service a loan, and recommend a loan that is right for the borrower, ultimately, the lender decides whether or not to lend money.
Full Story