Making broker news
this week, fraud concerns lead to foreign currency crackdown; one expert weighs in on potential market damage following foreign currency blacklist; and one mortgage franchise announces $4.1m acquisition.
Fraud concerns by Australian banks have led to a crackdown on foreign lending and the exclusion of foreign-sourced income for mortgage applications. Westpac and ANZ
kicked it off when they announced this week they will be investigating mortgages that have been backed by questionable foreign-income documentation, which forced them to stop approving such loans last month.
This was followed by Citigroup, who notified mortgage brokers of a foreign currency blacklist; and Bendigo and Adelaide Bank
, who warned brokers to halt lending to foreign borrowers and exclude foreign-sourced income.
was the most recent lender to announce tightened foreign lending conditions this week, announcing it would decrease the LVR for foreign borrowers to 60% and will only recognise just 60% of foreign income sources.
Despite the crackdown by the banks, one broker has predicted that limited foreign lending won’t have a far-reaching effect on the Australian property market. CEO of N1 Loans, Ren Wong, said only a small segment of the property market is likely to be effected.
“As per the banks’ comments, foreign borrowing only made up a minority portion of the loan book,” Wong told Australian Broker
“The restriction to lend to foreign borrowers will definitely impact the real estate market, but will likely be limited only to off the plan properties, which in itself is a minority market of the overall real estate industry.”
Finally, mortgage and wealth franchise Yellow Brick Road has eaten up one of South Australia’s top three non-bank lenders. Executive chairman Mark Bouris
said the $4.1m acquisition will help the franchise to diversify YBR’s mortgage book geographically.
“Loan Avenue is a respected B2B brand and has been in operation for ten years with a significant footprint, made up of more than 100 brokers in South Australia and Victoria,” Bouris said.
“This acquisition allows us to quickly build more scale in South Australia, diversify and deepen our distribution network and funding relationships and increase our management capability.”