Following ASIC’s newly revealed plans to undertake a review of mortgage brokers in regards to interest-only lending, many brokers have expressed their dissatisfaction with the corporate regulator.
Commenters on Australian Broker
’s report of the announcement, made at the FBAA conference by an ASIC senior executive, have said that ASIC is completely out of touch with the mortgage industry.
A commenter using the pseudonym “Chappo” said that ASIC needs to understand that it is the banks who ultimately make the rules.
“The lenders are the ultimate approval point and the ones who actually lend the money, in the structure THEY determine. I can put forward a proposal with interest only repayments, as that is what best suits the client, only to have the lender say they will only do it P&I.”
Further, Chappo said ASIC needs to take more of a front foot in investigating and educating consumers.
“ASIC better start investigating borrowers who think interest only is the best loan structure and give them a good talking to!”
Commenter John Sanders said also ASIC needs to turn its main focus from brokers to banks.
“Why don't [ASIC] investigate how clients who have come to me for a home loan and I cannot help because they have no financials have got a loan via major bank branch?
“Do the same rules, requirements not apply? Apparently not, because branch managers have a DUA to push loans through purely based on a client’s bank statements and gross turnover whilst brokers have to rely on net profit.”
Meanwhile, a commenter using the pseudonym “GC” said the scope of ASIC’s regulatory powers are too wide.
“The Government needs to step in and reign in these powers as it will lead to massive reductions in lending and the unintended consequences could be huge. We have already seen the start of this with sizeable reductions and it’s bound to get worse before … ASIC realise the damage that has been done.”
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