Major mortgage and wealth franchise Yellow Brick Road (YBR) has dismissed another condemning report about mortgage brokers in the mainstream media.
A column in the Herald Sun
over the weekend again linked mortgage brokers to financial planners – and the financial planning crisis which has rocked that industry – and claimed brokers are “up to their eyeballs” in “murky backhand commissions and sweetheart deals” from the major banks.
“Mortgage broker, financial planner, financial planner, mortgage broker, hmmm, same same,” the column read.
However, the CEO of lending at YBR, Tim Brown has said it is an ignorant comparison.
“Comparing mortgage brokers to financial planners is like comparing apples to oranges. The system is transparent with all commissions declared in the credit proposal given to the clients,” he told Australian Broker
“The Yellow Brick Road Group currently has over 35 lenders on the panel and all are used at different times depending on rate or product feature, commission does not even come into play when making sure the client gets the right product.”
Brown also responded to claims in the Herald Sun
that there’s “little chance” of a broker recommending a loan from an independent lender outside of the big four.
“The big four have a pricing advantage over the smaller lenders because of scale. As an industry we have raised this with the Government and they have advised us they are happy with the competitive landscape of home loans.
“The Yellow Brick Road Group generally averages 25-30% of our loans written outside the big 4 banks providing increased competition to a variety of choice for consumers.”
According to data from YBR, home loans directed to the major banks and their subsidiaries by YBR mortgage brokers decreased in March, comprising 69% of all loans settled. Loans directed to independent lenders outside of the big four and their subsidiaries increased to 31%.
Finally, Brown refuted claims by the Herald Sun
columnist that loans organised through mortgage brokers have a higher default rate than other types of loans.
“We have yet to see any proof that substantiates the claim of higher arrears through mortgage brokers. The data we receive from lenders consistently shows us otherwise. Regardless, the banks make the credit decisions, not mortgage brokers,” Brown told Australian Broker
This comes after the Australian Financial Review
published a report claiming the standards in the mortgage broking industry continue to lag those in other sectors. This prompted both the MFAA
to correct these claims and defend brokers.