Brokers have labeled bank reticence to write low-docs as an example of a knee-jerk reaction in an exclusive Australian Broker TV report.
Speaking with Australian Broker TV, Mortgage House CEO Ken Sayer slammed the post-GFC bank withdrawal from the low-doc market.
"I think it's overkill to be fair. I think it was too easy in the 2003 to 2006 period, and now it has swung to another extreme."
Niche Lending's Moshe Moses agreed the banks may have swung back the other way too far.
"I guess overall [low-doc lending] is required, but again as any knee-jerk reaction they [the banks] can go overboard and probably have gone overboard," he said.
Sayer said the appropriate position should be somewhere in the middle.
"It is really a case of meeting the customer and understanding where their cash flow stems from," he said.
Click here to watch the full Australian Broker TV report online