The MFAA has dubbed an APRA report misleading for asserting that broker introduced loans are riskier than other channels.
The association has demanded the banking regulator correct its draft Prudential Guide on Mortgage Lending, saying the report contains misinformation and is misleading. MFAA CEO Phil Naylor rejected APRA’s claim that broker introduced loans carried higher risk.
“There is no evidence to support the assertion that third-party or broker loans are any riskier than loans proprietary channel lending we have strong evidence to back up our case,” he said.
To the contrary, Naylor said broker introduced loans were of higher quality based on arrears, approvals and conversion rates. He pointed to both the NCCP and the MFAA Code of Practice, saying they held brokers to a high standard.
“These are stringent rules that come with heavy penalties if problems occur, providing strong protection to consumers at every step of the process. On this basis it is ludicrous to single out broker loans for special attention in the draft guide,” he said.