Weekend wrap: ASIC speaks out over controversy and big news for industry veteran

by AB05 Dec 2015
The year may be beginning to wrap up but the mortgage world still had a big week in news. The biggest headline on Australian Broker this week was ASIC weighing in on the living expenses controversy. 

Speaking to Australian Broker, ASIC senior executive leader - deposit takers, credit & insurers, Michael Saadat, confirmed that brokers and lenders will not be required to obtain bank statements and credit card statements to verify each consumer’s living expenses. 

“In terms of what is then required to verify a consumer’s expenses, what we say in RG209 is that you can use benchmarks as a form of verification and we say that similarly in the interest-only loans report – that benchmarks are a form of varication that you can use.”

However, he did say relying on general benchmarks would also not suffice and brokers should verifying living expenses against scaled benchmarks.

The Reserve Bank of Australia (RBA) also made its final cash rate decision for 2015 this week, deciding to leave the cash rate steady at 2%. Whilst this decision came as no surprise, John Kolenda, the managing director of 1300 Home Loans, said a future cash rate cut is coming.

“But the slowdown in China and its impact on the Australian economy, the slump in the resources sector and the contraction in the Sydney and Melbourne real estate markets are all pointers to the likelihood of another rate cut next year,” he said.

It has been a few months since we heard from ex-Mortgage Choice chief executive and industry veteran, Michael Russell, after he retired from the top job at the major franchise at the end of June, but this week Russell was announced as the new CEO and managing director of national mortgage broking business, MoneyQuest.

According to founder Ross Begley, Russell was appointed to spearhead MoneyQuest’s brand expansion, after his six-year tenure at Mortgage Choice saw franchise numbers lift 20%, monthly settlements increase by 33% and the company value increase by $200 million.