A mortgage provider has backed the argument in support the current broker remuneration model.
Resimac, an amalgamation of Homeloans and RESIMAC, said it believes a flat fee borne by the consumer is not in their best interests.
The lender’s general manager of third party distribution, Daniel Carde said Resimac strongly supported the current model in conjunction with the six principles in the Combined Industry Forum (CIF) reform package.
He said this was because the underlying theme of the reforms was achieving better consumer outcomes and improved standards of conduct, while continuing to promote competition in the Australian mortgage market.
Carde added, “Over the longer term, this will further strengthen the broker proposition, ensuring consumers continue to benefit from strong industry competition and greater choice when accessing finance.
“Brokers are critical to ensuring Australia’s mortgage market is dynamic and efficient, and to providing a level playing field for lenders of all sizes, especially those without a branch network. Brokers provide consumers with access to a wide range of lenders and real choice when evaluating the most suitable loan for their purposes.”
Over the past year 85% of Resimac’s loans were originated by brokers. The Resimac Group has a mortgage book of more than $12billion and over 50,000 customers.
Carde said Resimac already complied with the majority of the CIF principles as it did not pay so-called soft dollar commissions or volume-based or campaign-based commissions.
Resimac’s next step will be to amend how upfront commissions are calculated to remove any perceived conflict that may encourage consumers to borrow more than they need.