Secret RBA docs predict NCCP broker fallout
By
Adam Smith
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25/10/2011 6:00:00 AM
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3
comments
Reserve Bank communications released under the Freedom of Information Act show the central bank expects a further squeeze on brokers due to the more rigorous requirements of the NCCP.
An internal communication from Cameron Deans of the RBA's Institutional Markets Section in March 2011 advises that some broker market share fallout from the introduction of NCCP is likely.
"Looking ahead, while brokers' loan volumes may pick up, several factors are likely to weigh on brokers' market share, including: Some banks have recently tightened requirements of brokers in terms of assessing borrower suitability," he wrote.
Deans indicated tighter lending standards since the GFC have seen broker market share eroded.
"Tighter lending standards are likely to have contributed to the fall in brokers' market share over the past couple of years. This is most apparent in the low-doc mortgage segment, where it appears that the general tightening in bank lending standards was particularly pronounced for applications coming via brokers," Deans wrote.
Earlier RBA communications suggested that banks believe broker market share will remain steady in spite of industry consolidation.
Related stories:
Broker profits take hit as market share rises
Latest Comments
Total:
3
comment(s)
broker on
25 Oct 2011 10:33 AM
Yep they decline broker loans and then call the clients direct and offer them a loan! Good work MFAA looking into this.
Perth Broker on
25 Oct 2011 11:53 AM
Regarding the comment above. Absolutely. Have a dealheer where one of the big 4 said now and then we find out lately somehow there had been contact and the bank aproved clients loan.
When questionned on it all we get is them going to ground and fluffy non commital replies.
Ozboy on
25 Oct 2011 01:28 PM
Hey Perth Broker what did your aggregator say? Did they follow up the lender?