Lenders speak up on broker's cancelled accreditation

by Calida Smylie02 May 2014
Lenders have had their say on the issue of a broker who had his accreditation cancelled without being provided a reason.

A Melbourne broker – who did not want to be named for fear of reprisals from his aggregator and future lenders – received a letter from NAB last week saying his accreditation had been cancelled. The bank indicated it would speak with Australian Broker on the issue, but could not do so by time of press.

But other lenders say they do not have a clause in their heads of agreement with aggregators which gives them the right to refuse giving reason for cancellation, as NAB does, and say they would talk through issues with the broker.

Damien Percy, general manager of third party lending at Adelaide Bank, said the bank would meet with a broker should accreditation cancellation be on the cards, in case the decision could be amended. “Absolutely. That’s what grown-ups do,” he said.

But he noted that in the past when Adelaide has chosen not to deal with a party, the broker would know why.

“By the time one party decides to sever ties with another, it is rarely a bolt from the blue.  In fact, in my experience lenders will have given the aggregator or individual loan writer a fair indication of the reasons for declining to accept any further deals.

“It might not be a reason that the aggregator or loan writer agree with or consider material, and the lender may not wish to put it in writing, but usually everyone knows the underlying issues driving the decision from the lender’s perspective.

“That said, it’s worth emphasising that it is wrong to assume that any time a lender removes a broker from their panel that it is due to malfeasance. A lender might choose not to deal with a broker because of the poor quality paperwork, unacceptable application to settlement ratios, rude or aggressive interactions with support staff or simply having a poor quality client base.

“It follows that if one lender stops dealing with a broker, other parties should form their own, independent view as to whether or not it matters to them,” Percy said.

Mortgage House CEO Ken Sayer said they do not have a clause which lets them remain silent on reason for cancellation.

“Termination is based on fraud and misrepresentation only,” he said.

Sayer said other lenders go “hot and cold” on brokers depending on volume versus their peers and percentage of market share.  “They only use broker business to mitigate away loss of market share.”

He would “absolutely” sit down with a broker to talk about an issue with cancellation, he said.
ANZ will also always meet with a broker should issues of concern around accreditation come up, a spokesperson said.

ANZ's contractual relationships are with the aggregator groups under originator agreements and not with the individual brokers.

“In maintaining strong relationships with aggregators, we regularly provide feedback about broker accreditation and performance, and we are always happy to meet [with broker and aggregator] and discuss issues of concern.”

Some lenders were reticent on whether their contracts contain a right of cancellation clause, but said they would talk through any issue with the broker.

An AMP Bank spokesperson said: “Our relationships with intermediaries are important to us and something we take very seriously.  Quality controls are important, and in rare instances where we think some form of misconduct has occurred, we would ensure a thorough review.”

A CBA spokesperson said the bank would provide a reason wherever possible; however, legal ramifications may prevent them from doing so in some cases. The spokesperson would not elaborate on what these legal ramifications were, but said:

“The Commonwealth Bank’s broker accreditation framework is designed to support quality brokers. We have invested in appropriate risk control systems to proactively manage any areas of concern.

“If the matter is serious, the bank may decide to cease dealing with that particular individual and will notify all relevant parties should this be the case.”

Other lenders refused to comment on the issue.

Meanwhile, the broker whose accreditation has been cancelled feels as if he is in limbo, and worries he might have to leave the mortgage industry if his name cannot be cleared – as he is adamant there was no wrongdoing on his behalf.

He was interested to read comments on this news site from other brokers who had been affected by the same issue, but is worried no-one is prepared to fix the problem. He suggested to Australian Broker that a broker union with legal representation is set up to deal with issues such as these.

MORE:

Lenders 'acting as God' but nothing can be done, broker warns

'Dangerous situation' for broker who lost accreditation, says aggregator

'Aggregation lost its way', says association head

COMMENTS

  • by Dave Robinson 2/05/2014 9:22:55 AM

    So it's Westpac!

  • by Concerned Broker 2/05/2014 10:07:13 AM

    Christopher...its NAB!!!

    It is quite clear from reading above tbat MFAA and FBAA and the Agregators if they are serious in protecting the interests of their members to ensure standardised agreements are put in place and that agreements between brokers and Agregators must fully disclose the relationship agreements with Llenders. It is quite clear that NAB has something to hide and their contract clause is Draconian. Brokers take this seriously...it may happen to ypu...I am aware in one case that a Broker just was not personally liked and he had his accrediation removed. If you are serious aboit your business, you must ensure you have your contracts legally checked before you sign withyour agreegator.

  • by Steve McClure 2/05/2014 11:00:48 AM

    Maybe its better left un-said. I don't know the case, but wouldn't it be worse if lender recorded "submitting fraudulent information" due to the broker missing the fact that a pay slip he received had been altered by the client? But agree, conversation at least.