The NCCP has not killed off the non-conforming low-doc industry, or demand from applicants wanting non-conforming low doc loans, according to low-doc lender MKM Capital.
Speaking with Australian BrokerNews, MKM Capital operations and marketing manager Michael Watson said the next 12 months represents a "huge opportunity" for brokers who are writing non-conforming loans.
“While a lot of brokers have stopped writing non-conforming loans, this has not necessarily coincided with a commensurate decrease in volumes," Watson said. "Rather, we are seeing fewer brokers write more loans as some pick up the slack," he said.
Watson said while in the past consumers may have shopped around and been directed to MKM via potentially four different brokers, the current market meant consumers still found their way to MKM, though it may only be the fourth broker who would actually help with the loan.
"There are less brokers there and less re-entering the space. Subsequently, brokers who jump in now are getting a type of 'first-mover' advantage, notwithstanding the market has been around for a long while," he said.
Watson said that MKM Capital has found that many brokers have been intimidated by the new NCCP requirements.
"We stress that if the applicant’s requirement is not unsuitable and can be verified by an appropriate level of due diligence, there is still a deal there for them," Watson said. "Naturally, we have made some changes to accommodate the legislation; however these are minimal and designed to protect both broker and lender," he said.
Ezy Capital managing director Matthew Watts said there remains opportunity for brokers in the low-doc market. “Taking the time to learn the updated policies of non-conforming lenders gives Ezy Capital an advantage over those who view the whole process as 'too hard'. Non-conforming loans represent a large part of my business, and a lucrative one at that," he said.
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