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ASIC's first verdict: Low doc brokers found wanting

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Australian Broker | 18 Nov 2011, 01:00 AM Agree 0
ASIC's first verdict into brokers' adherence to responsible lending has found some of the industry falling short, particularly in cases of low-doc lending
  • bretto | 17 Nov 2011, 03:06 PM Agree 0
    10 years of brokering, over 50% lo doc - nil defaults. Pathetic to attack lo-doc lending. How about lending by lawyers, that would be a good start.
  • iratebroker | 17 Nov 2011, 03:14 PM Agree 0
    i know several bank branch managers and bank lending managers, these people promote and lend the same products we do yet they have no where near the compliance requirements we do. comments i get is if they were go through the paperwork we have to they would not be able to handle the volume required to keep the branch open. so the way things are, if i were not a broker and say a referrer, i could refer my deals to the banks by passing on a number, they do all the work, i no longer have resposibilites a broker does and i still get paid 0.3 - 0.4% of the upfront. with over 12 years in this industry, i think its time to quit brokering and be just a referrer........
  • Western Sydney Broker | 17 Nov 2011, 03:46 PM Agree 0
    Most of the dodgy loans are written by the bank branches trying to fulfuill their quotas. Write the loans first and ask questions after. As long as it looks ok in paper, they don't give a damn about the customer. Rules like Genuine savings, assessment notices for self-employed and salary credits into bank accounts go out of the window at the branches. They are required from broker applications only.
  • Vickers | 17 Nov 2011, 03:50 PM Agree 0
    How about ASIC looking at some Lo Doc loans done by the majors - they have done loans I have told the client rearlier that I couldn't / wouldn't do. Make it a level playing field!
  • Notthelawdummy | 17 Nov 2011, 04:19 PM Agree 0
    Utter ignorance when saying that "Loans promoted as low doc were a particular focus given the role these products played in the lead up to the US sub-prime crisis." Australian Low Doc loans were nothing like the NINJA loans (No Income, No Job or Assets) that contributed to the US sub-prime crisis. No Doc loans may be a better comparison, though that remains a 60% or less LVR 'asset lend' here. Get your facts right. Low Doc remains the only way many self employed people can get a loan, and the Nanny State NCCP laws and ASICS loan nazi enforcement is a political knee-jerk reaction to a problem that didn't exist in Australia like in the USA. Check the facts on Low Doc defaults before, during and after the GFC and note that the default rate is not that different to Full Doc loans ! "Low Docs Are Bad" is as nonsensical as "Speed Cameras Save Lives" - merely cheap policatically motivated slogans for the 'ordinary' Australians to feel 'safe' - BAH !
  • Jerry Gibb | 17 Nov 2011, 06:02 PM Agree 0
    I would not mind ASIC doing the same compliance check on some of the major banks home loan managers and then give the industry feedback on how compliant they are when it comes to this. I bet you this will never happen as it is easier to pick on individual brokers than it is to have a go at a Bank.
  • bretto | 18 Nov 2011, 11:29 AM Agree 0
    Well said "Notthelawdummy" It just goes to show ASIC are a joke and always go for the little guys and easy targets. I guess it was way too much to ask the MFAA to inform ASIC. It is also pathetic that the MFAA don't realize that no frills loans and lo-docs were how the broker market kicked of as a point of difference to the banks. And yes at the moment it is much easier to refer the deal straight to a branch manager who manages to settle loans within 7 days and we keep a happy customer.
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