Brokers have been urged to dispel their fears over non-conforming loans and use them as an opportunity to diversify and lock clients in for life.
Resimac’s chief operating officer Allan Savins said following the introduction of NCCP, there were ongoing ‘misconceptions’ over specialist borrowers and responsible lending.
“There is a perception that if the product has a higher rate, that it is not suitable, but that is not true as long as the situation is of financial benefit to the borrower,” he said.
Savins said any legal risks could be mitigated by ensuring that reasonable enquiries were made by the broker, to ensure the loan is of financial benefit to the customer.
At present, Savins said the market was an example of the 80/20 rule, with 20% of brokers understanding the NCCP implications, and 80% ‘staying away’ because of the uncertainty.
However, he said specialist lending provided the opportunity for brokers to grow their businesses via ‘solution- based’ products, helping them achieve loyal clients for life.
“Brokers can provide clients with a specialist lending solution, and there is no reason why in one or two years’ time they can’t refinance them into a prime loan,” Savins said.
He said the deferred establishment fee ban helped, as brokers can more easily offer to refinance within two years. He said Resimac’s clawbacks only extend to one year.
Resimac has also made moves to simplify its credit impairment table from five categories of borrower to three, and has published this to improve transparency, especially for those brokers who need to refresh on credit policy if they are irregular writers of the loans.
Savins added that the specialist market was ‘anti-cyclical’ in many ways, due to increased opportunity to write these type of loans when mainstream lender appetite contracts.
Resimac commits to specialist lending