No level playing field with lenders
By
BN
|
30/08/2010 5:30:00 AM
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6
comments
Brokers are in the uncertain position of being unable to recommend loans under NCCP legislation that lenders are still permitted to offer, due to a six-month gap between their respective compliance deadlines.
Kon Avramidis, director of operations at National Mortgage Brokers, has said new guidelines under the NCCP have resulted in brokers and lenders effectively operating under a different set of rules, until lenders come into line on 1 January next year with the obligations brokers have faced since 1 July this year.
He said while brokers are now coming to terms with responsible lending obligations, which includes the 'not unsuitable' test, lenders have until the 1 January to implement the required changes.
This has given rise to a disadvantage for third party brokers under the new legislation, with lenders having the ability to “approve loans that, under legislation, brokers are unable to submit.”
Avramidis said this was particularly relevant in the low-doc and no-doc loan product area.
With legislation requiring brokers to make reasonable enquiries about a client’s financial situation and verify their financial circumstances, a “broker’s ability to apply the criteria against today’s low-doc and no-doc loans is not achievable,” according to Avramidis.
He added that the legislation could spell the end of low-doc - and particularly no-doc loans.
Related stories:
Brokers not ready for compliance
Latest Comments
Total:
6
comment(s)
Bewildered on
30 Aug 2010 12:03 PM
This is a clear case of double standards and the Banks having great power, especially in an election year!
Dave on
30 Aug 2010 01:23 PM
I don''t think so this just means the implementation was not thought through, I think that is more feasible than the constant conspiracy theory''s sometimes thrown around this forum.
Country Broker on
30 Aug 2010 01:55 PM
Kon has a good point, but if we fact find carefully and "know our client" lo doc is still possible.
Not withstanding this the banks are at an advantage exceprt ofr ione thing, clients are aware of the service and care we provide and they are coming to brokers for that reason. The banks and their mobile lenders are at a distinct DIS advantage here , because we also know our products.
Troy on
30 Aug 2010 03:00 PM
What this comes down to is the crux of the whole NCCP legislation. All finance consultants whether a broker or bank employee should have been doing a Responsible Lending test in some form or other prior to the legislation. Those that have been will be able to carry on as usual just like Country Broker is stating. Those that haven''t will have to make the changes or risk having ASIC come down on them.
Bewildered to say it is double standards is just as Dave said Conspiracy Theory. I agree that we all should have been treated the same but let''s not make a mountain out of a mole hill. Do the right thing by the client, make sufficient checks and reap the rewards which will include clients coming to you rather than going to the bank staff. Let common sense and good lending practises prevail !!
TW on
31 Aug 2010 10:21 AM
Trpy has said it in one and is abolutely spot on. Lo Doc can be written and will continue to be written. If done carefully and responsibly it will remain a viable product.
Spinner on
31 Aug 2010 08:49 PM
Just do the right thing and sanity will prevail.