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Why some borrowers skip over brokers

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Australian Broker | 08 Aug 2014, 09:25 AM Agree 0
Nearly 40% of customers who choose to go direct to banks believe it's more convenient than using a broker, and more than a quarter believe they'll get a better deal
  • Broker | 08 Aug 2014, 10:36 AM Agree 0
    Demonstrating that the MFAA has done a poor job communicating to consumers the benefits of using a Finance Broker
  • John | 08 Aug 2014, 12:56 PM Agree 0
    I love percentages, it tells you nothing.
    My question is, "How many people were asked this question"?
    I agree, the MFAA have not really communicated to the general public, they should be on ALL electronic media
  • Denise Brailey BFCSA (Inc) | 08 Aug 2014, 01:56 PM Agree 0
    Yes consistent with our surveys that mainly deal with toxic loans and aggrieved borrowers. 36% say their loan was written by bank manager or officer, no broker involved. Yet the same exaggerated incomes appeared 4 years later. ASIC say its the broker and not the lenders. Brokers do not approve loans - banks do. Consumers just want honesty and safety so how together do we all solve this problem of sub prime lending?
  • marty | 08 Aug 2014, 03:50 PM Agree 0
    @ Denise.. hi again. Maybe we could have the government lend the money and we could all wait 12 weeks while they assess each application. Lending policy would be along the lines of ..only lend to those that don't need to borrow, no leverage above 35% of the fire sale value of a property, no investment loans no loans to people over 45 or under 30, no loans to child baring age single women, only take 25% of child baring women's salaries into account if married, no guarantor supported loans, must be in your job for 5 years + etc.... That way we might all finally be safe from ourselves.
  • Papery | 08 Aug 2014, 04:37 PM Agree 0
    Interesting...wasnt the statistic relating to 50% Broker market share pertaining to SETTLEMENTS.... irrespective of what initial enquiries were made by potential applicants.....

  • Stephen Hale | 11 Aug 2014, 10:54 AM Agree 0
    Hi Broker and John. If you are a member then you should be aware that the MFAA has 5 online campaigns planned in the next 12 months targeting our broker search function. We are happy to take members through it if you have the time if not you could ask the FBAA what plans they have to communicate this to consumers. Call me to set a time.
  • Denise Brailey BFCSA (Inc) | 11 Aug 2014, 11:55 AM Agree 0
    Hi Marty - I received loan in the 70's as a single Mum but I had 50% deposit. Yet it was the most expensive loan due to bank "risks." I understand that idea but it was definitely affordable from income. There were hefty fines for Bankers abusing clients back then. No Professional should be selling loan products that are unaffordable from "income." That does not include rental income as rent is treacherous and full of pitfalls. Its not an "age" criteria. Simply no loans to pensioners based upon the asset lend. The sub prime competent of this market is where 30 yuear loans (90%LVR and higher) have been made to older persons. The public see that as unconscionable and there are laws relating to such practice. However ASIC ensures all loans relating to dodgy lenders, sit on dusty shelves. The market is cooling the LVRs are reaching 120% and there are massive consequences of de-regulation of banks. There will be cries for re-regulation and those voices are now being raised. This is not about the "next sale" this is about our children's future and the bubble that unsuitable "investors" engineered by bankers have created. We need to start seeing futuristic consequences rather than sell products tainted by "futuristic incomes" created by a computer. I expect there will be people who disagree....those who do not foresee those devastating times of mass loss of homes due to sub prime lending.
  • Papery | 11 Aug 2014, 02:26 PM Agree 0
    @ Denise....time to bring out the pitch forks hunt down & kill the monster..... no doubt you will lead the & charge.....
  • marty | 11 Aug 2014, 03:07 PM Agree 0
    @Denise. You are contradicting yourself a bit. I thought you were against asset lending?
    You say "but I had a 50% deposit". Why does the deposit matter? If you / she can't afford the loan she will be sold up same as a borrower with a 90% loan.

    Then you say 30 yuear (sic) loans (90%LVR and higher) have been made to older persons". We all agree that pensioner and those on modest retirement incomes should be lent to cautiously hence the NCCP legislation which covers this explicitly. However lets not throw them in the used by bin. If they have ongoing income there is no need to discriminating on age. I recently settled an interest only loan for a couple both aged 75, they had heaps of ongoing business income and rental income (which is safer than job income in my opinion). No issues there.

    Finally you show you are off the mark when you say "The market is cooling the LVRs are reaching 120%" .... um no not true. On average LVR's are 70% at origination so add in 20% growth in many areas in the last few years and you have 50% LVR average. Even mots of the 95% + LMI loans written 2+ years ago would have a nice equity buffer now.
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