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APRA cautions lenders to be prudent when dealing with brokers

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Julia Corderoy | 06 Nov 2014, 08:44 AM Agree 0
APRA has released its final prudential practice guide and it doesn’t take too kindly to brokers
  • Home based broker | 06 Nov 2014, 10:11 AM Agree 0
    Wow. Another swipe at brokers. Surprise. When will APRA look at lender branch staff who write loans without full disclosure. I lose business in plenty of cases due to this practice. And I have 1 in 200 loans in arrears. Nasty.
  • Regional Broker | 06 Nov 2014, 10:25 AM Agree 0
    It is obvious that APRA still do not understand that the approval process, including valuation, income confirmation, client credit histories, and so on still sits with the banks. Very little fraud in terms of the % of loans written or even the % of brokers involved is very low.

    The lender sets the rules and completes the approval and settlement process.

    Seriously, I really believe APRA are out of touch with the process and how a broker deal actually works.
  • AF | 06 Nov 2014, 10:43 AM Agree 0
    If APRA can't comprehend the process, perhaps someone needs to initiate a total review to rid us of this bunch of incompetent public servants. Maybe they are trying to justify their pathetic existence.
  • Tim H | 06 Nov 2014, 10:43 AM Agree 0
    My take on the APRA report is things are going alright in the residential mortgage lending area but as we have to be seen to make a comment we'll say steady as she goes, don't rock the boat.
    There are bad eggs in any profession and APRA recognise this and again have made a comment in regard to brokers for comments sake.
    If you are doing the right thing by your clients keep it up and we'll let the lenders and ASIC weed out the bad guys as and when they stick their heads up.....
  • Perth Broker | 06 Nov 2014, 10:49 AM Agree 0
    Maybe APRA need to sit with brokers and lenders and see how much more information we, as brokers, provide and how much you obtain as a bank employee.

    I have worked in the banks and they can tick a box saying income has been verified and don't provide payslips to credit.

    Just like below comments, we lose deals to banks who have not followed correct procedures or who are driven by onerous sales targets the banks have applied.
  • CD | 06 Nov 2014, 11:08 AM Agree 0
    APRA TSK, TSK,TSK. Maybe APR need to spend time with brokers to see how we operate, how we interview clients and how we make assessments and decision's based on the conversation with the client. Under NCCP and ASIC we are well Governed and penalized heavily for any breach every step of the way. I to worked in a bank and as the comment below says income verified with a tick but no pay slips, we have to keep these on file so who write the better loan brokers or branch staff???
  • Tony | 06 Nov 2014, 11:09 AM Agree 0
    To the APRA have they really looked t the lenders practice?
    WE all have some interesting stories on how they (lenders) work and what they do on their in home applications
    Perhaps they need to be looked a bit more closely
    I can really see CBA Financial planners situation happening with the Lenders so called Mortgage specialist very soon!
  • Don Perth | 06 Nov 2014, 11:45 AM Agree 0
    Another bunch of idiots trying to justify their existence. They have no guts to audit any bank to see what was going on in the branch. I tested different banks in Northbridge when I can't do anything for a client, e.g. married couple with 1 child and grossed income of $45k gets his loan approved $500k!!! No problem.
  • Papery | 06 Nov 2014, 12:13 PM Agree 0
    Exactly....hey APRA....go secret shop a few direct to Bank applications, dont forget their Mobile Lenders and online platform process, not to mention testing how the staff get the bonus remuneratin & then come & criticise the broker process in a post NCCP world..... Sheesh!!
  • Coast Broker | 06 Nov 2014, 12:18 PM Agree 0
    Why doesn't APRA first look at the Banks own internal Lending practices for direct retail business. For example one of the Majors that can approve a 90% lend over a 30 year term for a single women with no superannuation or other assets who is 69 and her sole source of income is Carers Income and income for caring for foster kids.
    Also another Major Bank branch who was able to undercut me on interest rate by 30 basis points and their BDM said there is no way it could be done however I said I have seen the Approval Letter and can provide a copy of it. He went silent and I have not heard from him since
  • Papery | 06 Nov 2014, 12:40 PM Agree 0
    Or they major Bank that managed a 95% PPR lend with borrowed equity (via an unsecured LOC from a different Lender) when the policy says no way no how & even the BDM cant see how the branch manipulated the policy
  • QEDRisk | 06 Nov 2014, 02:37 PM Agree 0
    I get the sentiments expressed here and yes it appears like yet another attack on our industry. But APRA's job is not to get its hands dirty at the retail level - that's supposed to be ASIC's job. APRA has merely stated some statistical facts from the data it collects. Assuming it's accurate, all that means is that we still have a bunch of bad apples amongst us. Remember that those of us reading this website are the good guys who actually care about our work. We get held to ransom because of the lowest common denominator factor.
  • Patrick | 07 Nov 2014, 04:43 AM Agree 0
    We have APRA, ASIC and ACCC and yet the banks freely engage in systemic unconscionable conduct in breach of the Trade Practices Act in their dealings with brokers on a very steep playing field.
  • Banker | 14 Nov 2014, 12:21 PM Agree 0
    I work at a Big 4, and I can tell you that we are heavily scrutinised by APRA.
    Remember people, this is a Broker news site....there's just as much reporting of a similar nature of the banks as well.
    Fact is, there are dodgy lenders anywhere you go and there will always be unfortunately.
    The main problem with the dodgy bank lenders, is that the banks don't prosecute when they detect one. It's cheaper to let them go, so that person just moves onto the next bank. This is the real change that's needed to rid the industry of dodgy lenders.
  • Don Perth | 14 Nov 2014, 01:17 PM Agree 0
    I invite Banker to come with me to visit how some branches of the Big 4 operate - anytime.
  • marty | 14 Nov 2014, 02:56 PM Agree 0
    Good on you Banker that it is exactly right in my opinion. Good and bad apples in both camps.
  • Show me the facts | 15 Nov 2014, 08:34 PM Agree 0
    Just sat in a PD day with a major and listened to broker introduced loans having the lowest arrears including all other channels.

    Arrears are at all time lows! Banks are adding back provisions that are boosting profits per financial review.

    Given brokers introduce 50% of home loans, is APRA saying its the branches introducing their 50% (and dwindling) of loans delivering 100% of the Banks writing back provisions?

    Come on!, Bank's making $30b and your segregating the individuals who have no approval authority?

    APRA's challenge will be that Brokers will push north of 50% of originated loans, losses benign and then what? Brokers filling out applications in blue pen are likely to be risker than those in black?

    Spare me!

    The reason we became brokers is actually add value and not shuffle paper and tell me, APRA, are people voting with their feet?

    Roll the sleeves up and look at the financial planning industry. At least brokers have to compete with branches. Planners are commanders and generals with no "branches" to compete with.
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