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Non-banks face annihilation: MFAA

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Australian Broker | 12 Apr 2011, 07:00 AM Agree 0
The non-bank sector will disappear when the exit fee ban becomes law, and are already going backwards, according to the MFAA
  • Allan Faint | 12 Apr 2011, 12:25 PM Agree 0
    I dont know about Aussie but Wizard had no defered establishemnt fee, until GE bought them
  • intouch | 12 Apr 2011, 12:33 PM Agree 0
    Whilst it is a crazy legislation, change represents opportunity - non banks embrace the challenge as we know the value proposition we bring to consumers. Lower rates, more personalised service and greater post settlement service. We are now on a equal footing with the banks in terms of exit fees (be interesting to see what the banks do, there will be a fee somewhere) – so there are no immediate impediments. Educate the borrower and build a stronger relationship – hard to do that if you keep giving business to the banks and lose control over your customer experiences.
  • Mortgage Manager | 12 Apr 2011, 12:53 PM Agree 0
    After 10 years as a mortgage manager I am in the process of leaving the industry... I am also aware from conversations within the last week of two other mortgage managers who are about to exit.

    All had their trail-incomes (and businesses) threatened if they didn't get an ACL.

    But the DEF ban kills their business-models.

    All can see that their are powers working to shut-down non-bank lending; brokers are next, aggregators will follow and then the Banks will be finally happy... maybe!

    Can the last person leaving please turn out the lights.

  • John Santo | 12 Apr 2011, 02:37 PM Agree 0
    I for one am glad that mortgage management is dying - Unrealistic upfronts - Huge defs and derfs. How is it a bad thing they are dying. Wayne Swann good job.
  • Mortgage Manager | 12 Apr 2011, 05:44 PM Agree 0
    To John:

    It's a bad thing for a number of reasons.

    1. Non-bank (Off Balance Sheet)lending did provide a very real competitive difference.

    2. It was an important component within the matrix of lending-solutions.

    3. The products are actually very good... and more importantly, provided a very real and different platform disconnected from wallet share 'banks' programs (i.e. selling more debt-based products)

    4. It actually builds a stronger relationship with borrowers, and lenders in this space are VERY happy to work with clients to 'get ahead' and fast-track owning their homes.

    The DEFS you mention are simply a function of ensuring that 'pay-back for costs' occurs if the client repays the mortgage in full within 5 years, and it's a decreasing scale in the RESIMAC case, and a fixed 1.5 notional payment for the likes of Advantedge.

    I would agree in-part by confirming that negative-spin can present a DEF in an ugly manner, but that's just spin.

    Beyond that argument, banning exit costs is just plain bad for the whole industry.... we are essentially in the early stage of changing the architecture that will lead to greater instability when Mortgages can almost be day-traded.

    I know it looks sexy on the nightly news; but the truth is this IS a dangerous move.
  • mattfx | 12 Apr 2011, 10:23 PM Agree 0
    We all know that bad news sells,I'm surprised to see Phil Nalor in such a knot about it, or is it just journalistic licence ? Who needs this kind of negative suggestion anyway ? Just get out there and serve your clients for their needs, things change, everything changes,accept change and be rewarded.
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