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Broker licences at risk as dubious practices targeted

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Australian Broker | 09 Mar 2012, 07:00 AM Agree 0
Commercial brokers have been put on notice their credit licence will be at risk if they are complicit in continuing to direct clients to business lenders with suspect practices
  • SteveOz | 09 Mar 2012, 12:17 PM Agree 0
    Nice one ASIC.....This is one HUGE problem that causes a lot of heartache for SME.....Legit brokers as well. Good work
  • Peter Maver | 09 Mar 2012, 12:44 PM Agree 0
    Finally, I used to work in the Brisbane Gold Coast corridor and both these practises were rampant. I ended up doing my own due diligence on the funders sometimes doing more work on this than the clients application.
  • Positive Broker | 09 Mar 2012, 02:02 PM Agree 0
    I have had some experience with funders who are "fee fishing". No doubt some loans due to their complexity may justify a fee in the tens of thousands but the practice of charging these fees before the loan is anywhere near approved is disgraceful. The sooner these funders change their ways or are forced out of the industry the better.
  • Steve reid | 10 Mar 2012, 09:05 AM Agree 0
    Peter white should look at his own Fishing business
    this should have been fixed whne the NCCP came out private lenders are sharks
  • Wayne Armstrong | 10 Mar 2012, 09:08 AM Agree 0
    This is long over due
    Charging thousands for loans that dont even get approved or say the Valuation was $4000.00
    Go get them ASIC
  • VBLendahand | 10 Mar 2012, 12:45 PM Agree 0
    Fee Fishing is a scourge in the industry & I now avoid this commercial space as I cannot lie straight in bed & serve this crap up to a client. I welcome ASIC's review as long as they don't add to the problem!
  • 1martym1 | 12 Mar 2012, 10:26 AM Agree 0
    VBLendahand...agree I stopped doing development lending as the name of the game for the funders was to fee fish the client not actually provide funding.
  • Andrew Way | 12 Mar 2012, 01:01 PM Agree 0
    If anyone is aware of a victim of Fee Fishing or Equity Theft, please call me on 1 800 SEMPER (1 800 736737) and I will make sure it is added to the list of perpetrators.
  • Bob Anderson | 14 Mar 2012, 12:25 PM Agree 0
    Last time I checked charging up front fees on commercial deals was completely legal?.... Where is this mystery legislation, also get a loan from Semper Capital, no conflict of interest guarantee!
  • Peter Stuyvesant | 14 Mar 2012, 12:45 PM Agree 0
    @bob anderson, the issue is not the collection of fees, it is the failure to follow through on the service the fees relate to. I mean if i a girl asks me for a drink at a pub and then the transaction does not follow its natural cost i am hurt too. is there a regulatory body for this?
  • Bob Anderson | 14 Mar 2012, 12:53 PM Agree 0
    Also, private/commercial lenders could never be subject to an EDR scheme, they would simply leave the market sending many Australian businesses broke. Bransgroves, Australia's leading Mortgage Law practice is currently circulating a white paper on how the EDR scheme in Resi lending is slowing credit and affecting the market, so far lenders with agg book value of 5.5bn have signed on in support. So would ASIC propose this for commercial? I dont think so....
  • Paul Pajamas | 14 Mar 2012, 12:55 PM Agree 0
    @PeterStuyvesant I agree. Its comparable to voting for a labour government and getting belted with a Green / Independent hybrid version of a government that keeps taking out loans from the IMF and recklessly plunging you further into public debt without even having to complete a preliminary assessment. What government body takes action against false electoral promises ?
  • Bob Anderson | 14 Mar 2012, 12:57 PM Agree 0
    @Peter Stuyvesant, you have raised a great point, lets get onto asic about an EDR for the pub situation you have raised. My aggregate spending at pubs with no "settlement" would top 50k over the years, so definitely an issue and this is consumer!
  • Paul Pajamas | 14 Mar 2012, 01:05 PM Agree 0
    @BobAnderson.... I think you will find the better looking blokes have a beter strike rate... maybe you need to work on your up front ?
  • Ben Dover | 14 Mar 2012, 01:09 PM Agree 0
    If Wayne thinks that $4k is too much for a valuation...maybe he should stick to selling home loans
  • Peter Stuyvesant | 14 Mar 2012, 01:09 PM Agree 0
    @Bob Anderson, i think @Paul Pajamas may have a point. If a good looking bloke pays his "upfronts" at the pub there is generally a better chance of settlement. In a fee fishing example it is fairly irrelevant how good looking you are. Unless you know a lender that includes looks into there matrix?
  • Peter Stuyvesant | 14 Mar 2012, 01:14 PM Agree 0
    @Paul Pajamas, The Liberal Party?
  • Commercial Broker | 14 Mar 2012, 01:22 PM Agree 0
    I have settled Commercial loans for years and charged a fee for my service and that includes the client paying for the deal to be put together. I love hearing you Home Loan Brokers are staying out of my pond. As your Aggrevator Software doesnt tell you what to do you are out of your depth anyway. $4,000 for a Valuation was obviously a very small deal.
  • Bob Anderson | 14 Mar 2012, 02:26 PM Agree 0
    why dont we have ASIC approve all loans, then we would have none of these issues.
  • Buisness Lender | 14 Mar 2012, 02:38 PM Agree 0
    This has all been very funny. Thank you bob, peter, paul, ben and comm broker.

    How does Mr. Way qualify lenders before putting them on his "list of perpetrators" and what precautions does he take before making the market aware of who is on his "list"? It all looks like a good way to drum up his own business

  • Andrew Way | 14 Mar 2012, 07:16 PM Agree 0
    Pursuing fees under a charging clause in an letter of offer, far in excess of the cost of work performed, especially when a loan does not proceed, is a blight on the future landscape of commercial finance. Let the regulations be put in place and the courts decide if they are being abused. There's no sense having a crack at a long-standing advocate of reform for responsible lending practices. If you're for this practice, it's time you were gone. Other lenders with access to serious capital can do the job cheaper, and better.
  • Buisness Lender | 15 Mar 2012, 11:20 AM Agree 0
    If you see a lawyer about a case, he will charge upfront just to quote estimates on how much it will cost to win the case, additionally, they will charge the fee to run the case win or lose. Comparing this to commercial finance, in both cases, if the advisor explains the chances of success honestly, then there should be no problem. Only an imbecile would introduce an EDR as they circumvent the court's power to "Decide".
  • Ex Business banker | 16 Apr 2012, 06:23 PM Agree 0
    Now in my 13th year as a Broker (after 26 years in Banking), I have noticed an increase in the number of "Fee Sharks" out there ... especially in "Syd & Bris Vegas" ....
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