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LMI market lacks competition and burdens consumer: HIA

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Australian Broker | 16 Apr 2014, 08:00 AM Agree 0
The Housing Industry Association has joined the FBAA in criticising the high cost to consumers and lack of competition within the LMI market
  • Fair trade Adelaide | 16 Apr 2014, 10:34 AM Agree 0
    Legislation was put into place within the Banking Industry to get rid of break costs so a consumer could move their mortgage if it was not competitive, But if the loan is still over the 80% LVR the customer again would have to pay LMI again with the new lender, with the LMI not being transferable there is no competitive situation at all and the consumer has to stay with the lender until they reduce the loan under 80% or Capital growth catches up. This really needs to be looked at if the industry is honest.
  • Country Broker | 16 Apr 2014, 11:24 AM Agree 0
    If all the lobby groups get involved and put the pressure on , it may result in the federal government looking at the problem , until they see it is impacting on First Home Buyers being able to build in particular , there will be no action.
  • Denise Brailey BFCSA (Inc) | 16 Apr 2014, 12:15 PM Agree 0
    Loans are being made by Banks to people who did not even have the deposit. Its all arithmetic. Many of these loans were 97% and advertised as such in emails between banks and brokers. These loans bank approved, knew their customers were going to be hit with an LMI figure of say $12k when there was little or no deposit. This occurred with those who also were qualified for FHOG. WE have the documents - banks still approved 000's of these loans. Yes we agree with Housing Industry Assn. Cost of Insurance was a grand rort ripping off the most vulnerable. Yet was compulsory to Banks being "satisfied." And, Loan M Insurers also used same bank serviceability calculator and banks only sent across to LMI 3 pages of the LAF. Wide spread practice and we have the proof. Consumers had no choice. Something has to change.
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