Mortgage broker Loan Market Group has welcomed the central bank’s decision to leave the official interest rate unchanged but says mortgage holders can still expect rises in the months ahead.

The Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.75 per cent after its first board meeting of the year on Tuesday.

Most financial market economists had expected a rise of 25 basis points to four per cent.

Loan Market Group executive chairman Sam White said the decision would allow the RBA to examine the impact of the three rate rises made late last year.

“What they’re trying to do is assess the impact of the previous rises,” he said.

“Australians are also coming back from holidays.
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By Jill Fraser for Lending Central

The MFAA National Broker Committee is backing the push to do away with ‘quantity’ or ‘volume’ based accreditation.

The proposed new accreditation system being touted by the MFAA’s NBC and linked to the establishment of ‘professional credit advisers’, the prospective new name for MFAA broker members, is minus any volume clause.

The NBC hopes it can successfully “persuade” lenders to abort volume based accreditation criteria and utilise the criteria in its proposed ‘professional broker characteristics’ as the basis of accreditation programs.

While some lenders support this attempt to focus on quality and professionalism in the industry, it remains a contentious issue and at the moment overall lender support has yet to be mustered for the adoption of the proposal.
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Consumers show little loyalty to lenders when they consider a new home loan or attempt to refinance, according to leading mortgage broker Loan Market Group.

Loan Market Group Chief Operating Officer Dean Rushton said the global financial crisis had changed the lending landscape, particularly for people looking to enter the property market.

Mr Rushton said independent research conducted on behalf of Loan Market Group found first time buyers had virtually no loyalty towards lenders, particularly the major banks.

“They are looking for the best deal they can get so it doesn’t matter to them whether they have had a long standing relationship with a particular bank or any other lending institution through a savings account or other dealings,” he said.
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By Jill Fraser for Lending Central

MFAA Chief Executive Officer Phil Naylor told Lending Central that he has instigated negotiation with aggregators and lenders regarding the contentious issue of volume-based accreditation.

“We think a far better measure of determining quality is not through volume as a surrogate,” he said.

“We think a better measure is some sort of a definition of professionalism as a criteria, which is what we’re currently working out with lenders.”

Naylor agrees that the accreditation criteria of some lenders, which limits supply, has the potential to “chop a lot of brokers out of the market” because it will impact on their ability to deliver a wide choice of products.
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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.
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