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Clawbacks 'sad necessity' under DEF ban

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Australian Broker | 14 Mar 2011, 06:00 AM Agree 0
A leading non-bank lender has admitted clawbacks will increase if the ban on DEFs becomes reality
  • Chris | 14 Mar 2011, 02:40 PM Agree 0
    Unless the same loan is refinanced it is not the Brokers fault if the borrower decides to sell or for any other reason - Brokers who have done the work should be remunerated and Funders also take that commercial decision when approving any loan as they do with their own staff - they don't get clawed back (so Broker loans are in fact more profitable for them). Funders should place the same ethics for Brokers. The borrower is the one who inflicts this cost on the Funder/Broker and normal law of business is we should be entitled to cover our costs. The funders should charge an up front fee like they used to and dispense with clawbacks (other than churning - thats not right) and place the cost back where it should be but they wont because they know it is in their best interests not to.
  • David | 14 Mar 2011, 02:59 PM Agree 0
    Simple solution ... All Clawback Fees can be reimbursed by the borrowers to the Broker if the Clawback Fee is included in the Broker Agreement which is signed by the borrowers prior to proceeding with the lodgement of the loan.
    Every other industry is able to pass increases in costs onto to customers. Why should Finance Broker be any different ???
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