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Industry slams consumer groups' risky lending accusations

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Australian Broker | 15 Jan 2014, 07:59 AM Agree 0
Lenders, aggregators and brokers have hit back at accusations by consumer spokesgroup CHOICE that "lax" lending standards and high LVR loans are putting consumers at risk.
  • Stewart | 15 Jan 2014, 09:18 AM Agree 0
    Godfrey - stick to comparing vacuum cleaners!!
  • Keith of the West | 15 Jan 2014, 09:24 AM Agree 0
    Tom Godfrey is making a statement which lacks evidence or credibility. Brokers' & Bank's are governed under "Responsible Lending" guidelines, and failure to comply has very serious implications. In event one borrows 120% under a gurantee arrangment, one thing is for sure, the applicant has the clear capacity to repay this loan without suffering financial hardship!
  • Ray C | 15 Jan 2014, 09:26 AM Agree 0
    I cannot understand why "Australian Broker" gives any credence to comments made by Choice. They dabble in home loans without a licence yet criticise licence Credit providers both brokers and lenders.
  • Larz | 15 Jan 2014, 09:26 AM Agree 0
    To compare the current lending guidelines in Aust to the pre GFC lending in the US simply confirms the total lack of understanding that Choice has about the Australian mortgage market and lending in general. The only reason they are making these statements is to promote themselves rather than give an honest informed opinion of what is actually happening. Typical of Choice Magazine.
  • Positive Broker | 15 Jan 2014, 09:27 AM Agree 0
    One day Choice will come out with a positive viewpoint instead of being the perpetual doomsayer protecting us from ourselves but I doubt it. Do they really think borrowers are that stupid?
  • David | 15 Jan 2014, 09:29 AM Agree 0
    Of course, every home loan carries a risk of default. This is a typical Choice move to score a bit of cheap publicity at a time when the media are scrambling for news stories. Unfortunately Choice is a major story provider to A Current Affair and has the ear of ASIC, more so that MFAA which is very concerning when uninformed comment gathers momentum. Still, we shouldn't be too worried about Choice's comments - their credibility is fast being eroded and given time it is becoming increasingly irrelevant. Why not ask Tom Godfrey how much commission Choice has earned through it's Big Switch campaign, and how many of their borrowers are in financial difficulties - I'll bet he can't answer that! It's time to put these turkeys on the back foot rather than accepting their half-baked comments with denials.
  • Dacian Moses | 15 Jan 2014, 09:32 AM Agree 0
    Putting a home loan through as an investment loan enables loan officers to hit monthly KPI's. It avoids the need for deeper scrutiny (processed locally in branch) and means the borrower qualifies for a larger loan as rent is factored into the capacity to pay. The loan officer fails to mention that an investment loan is a separate contract to a home loan The bank is able to foreclose much faster on an investment loan. If the design of the system is to sell and distribute more loans then that is what will happen - right up until there is a catastrophic failure. Then nobody gets any credit for a while and the game begins again.
  • GC | 15 Jan 2014, 09:38 AM Agree 0
    I dare say it wont be long before these idiots at Choice start blaming banks and brokers for clients losing their jobs causing hardship and the inability to repay their debts.
    Godfrey should stick his head back up where the sun doesnt shine. He is a big mouth with nothing really important to say.
  • Old joe | 15 Jan 2014, 09:53 AM Agree 0
    I wonder what happened with the Choice Refinance offer that they were spruiking?
    Again its a quiet news day and the media outlets will pick it up. In regards to lenders being lax , I found that lenders now are being more stringent on borrowers in their 50's and asking questions in regards to how borrowers will be able to keep up payments on a 30 year mortgage once they retire.
  • Broker | 15 Jan 2014, 09:55 AM Agree 0
    Choice should stick to what it does best, compare washing detergents and irons etc and other dribble on A Current Affair!
  • Tony | 15 Jan 2014, 10:03 AM Agree 0
    How about Choice helping potential borrowers with advice, practices or guidelines to follow when taking out a loan. Like declare ALL your liabilities, have I told the lender everything and if I cant afford my loan, that is my responsibility not everyone else's.
  • Gary | 15 Jan 2014, 04:07 PM Agree 0
    Must be quiet at Choice, time to do a bit of bank bashing. I wonder do they hold a Australian Credit Licence. It sounds like financial advice....
  • Neil C | 16 Jan 2014, 08:16 AM Agree 0
    I agree with Gary. Does Choice hold a Credit Licence?
    Maybe someone should ask ASIC to investigate!
    My late Dad always used to say: If you not sure it's better to keep your mouth closed and be thought a fool then to open it and remove all doubt.
    Mr Godfrey would be well placed to heed that advice in future.
  • don owers | 26 Jan 2014, 09:22 PM Agree 0
    well to the positive broker yes borrowers if not stupid are easily misled, check out the GFC in 08.
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