Brokers concerned about regulatory meddling

by Adam Smith20 Nov 2014
While brokers are confident in the health of the mortgage market, they fear new regulations could scuttle their businesses, an aggregator head has been claimed.

Genworth's Home Grown report has revealed that the majority of brokers are confident in the health of the mortgage market. Asked whether the current state of the market was "healthy and sustainable", 54% of brokers said they somewhat agreed while 22% said they strongly agreed. Ten per cent were neutral on the question, while 14% strongly disagreed.

While brokers overall were optimistic, they were less positive than their lender counterparts. Only 3% of lenders said they didn't believe the market was healthy and sustainable. Genworth put the discrepancy down to brokers' front-line view of the market.

"Brokers are at the coal face and are therefore more likely to see a few cracks and stresses in their respective markets. As a consequence 14% disagree that the mortgage market is healthy, compared to just 3% of all lenders. However, the vast majority of both brokers and lenders believed that the mortgage market is relatively healthy and sustainable," Genworth said.

Connective principal Mark Haron said brokers were more concerned about the regulatory environment than the strength of the housing market.

"I think brokers would all agree that the market is going very well. The issue brokers are concerned about is the potential interference from regulators such as the RBA and ASIC and APRA. They're small businesses, and minor regulatory changes can have a major impact on their business," Haron said.

Haron also argued that the RBA could play a stronger role in bolstering consumer confidence.

"If Glenn Stevens actually spoke words people could understand, they might actually be more confident and come out of their shells."

 

COMMENTS

  • by observer 20/11/2014 9:11:29 AM

    "If Glenn Stevens actually spoke words people could understand, they might actually be more confident and come out of their shells."

    Classic comment and pure gold, as well as being very accurate.

  • by Russell Murphy 20/11/2014 9:25:54 AM

    I agree with Mark Haron! Read amended RG209 and tell me when mortgage brokers became aligned with payday lenders.

  • by Peter Heinrich 20/11/2014 11:17:35 AM

    The really big worry is APRA who clearly have no idea how Mortgage Brokers operate. They operate from the songbook of urban myth and spin over reality. However, if they persist with their arguments that Broker loans are more risky than propriety loans the regulators start to listen (and act by more regulation). Somebody (anybody) in APRA needs to actually look and see that brokers only refer loans to lenders (not approve them) to modify their stupid and uneducated statements. The regulators have no idea, they just react to the people who should know better. Note the deafening silence of disapproval coming from the Banks. I am not sure any have spoken out to dispel the myths proposed by APRA?