This is a new low in political economy stupid:
Mortgage brokers are a con. Their brand of competition is simply to destroy lending standards and fuel absurd property prices out of which they take massive and conflicted trailing commissions. UBS research found that brokers “a statistically significantly higher level of factual inaccuracy via the broker channel than via the bank’s proprietary networks”:
And that nearly all of the misrepresentations were at the suggestion of the broker not banker.
Consumers looking for mortgages will be much better off when house prices are instead 30% lower and they need commensurately smaller loans from a bank actually doing something once called “banking”.
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The Australian public need a scapegoat, otherwise they would have to blame themselves (and if they blame themselves they are probably less credit worthy and less inclined to spend – so we cant let that happen). Dont these guys understand that they are the most appropriate scapegoats we have? (unless we really blame banks – and that aint going to happen – or politicians – and that aint going to happen – or the media – and thats being silly). I hope they are anticipating some roboletters and a forensic examination of their assets and capital movements.
I also think a spell in a Xinjiang reeducation camp for these guys could help us build bridges with the Chinese, or possibly popping them all on Nauru (in exchange for refugees – someone yesterday was saying conditions there are actually pretty comfy) would be worth considering.
Some clothing identifiers or e bracelets and a national register should be sine qua non.
And anyone in the real estate or banking industry not demonstrating the appropriate gusto with their denunciations of the mortgage broker clique should be looked at to find out where they really stand.
Brokers exist for two main reasons:
1. Plausible deniability, in terms of enabling lower lending standards as credit is marketed as a product (instead of a bank specialty); and
2. To create the illusion of competition within the Australian mortgage lending market.
The proliferation of ‘loans’ available within our Financial Services industry is deliberate obfuscation, in exactly the same way that there are a proliferation of Retail Power contracts available for the consumer to ‘choose’ from. The wall of complexity is nothing more than a facade to draw attention from the fact that behind that wall is a chasm in terms of genuine market competition.
Banks should OWN their credit – after all, this is meant to be what they specialise in, assessing credit and managing credit risk.
Too funny! The only who’ll now lend is ‘him the one’ down by the Crossroads.
Straya really is a syndicated cartoon comic strip.
A retailer painting its own product suppliers as the devil? Desperate times. Desperate measures.
That was my immediate thought. Way to bite the hand that feeds you!
You go to the bank if you have a substantial deposit and want the lowest interest rate. You go to a broker if you have no deposit but still want that 700k IP and are willing to pay a higher rate for it. Brokers do magic and make it happen.
how much peple save with broker driven market competition?
more or less than 0.25% – perpetual broker commission?
more or less than 0.75% initial brokerage payment?
more or less than $16b dollars what broker industry is worth?
we have 4 big banks with 80% of the market share – that’s more competition than in almost any other sector.
Remember big three grocery companies 90% of market, big three energy companies 90% of market, big three insurance companies 80% of market, big two telco companies 80% of market, and so on
The ad asks, Q.What would a world without mortgage brokers look like?
Immediately I thought something like this.
http://www.greenfieldsturf.com/images/image_home.jpg
hahaha, the answer is “hmm, now that i think about, it wouldn’t be so bad
haha, similar:
https://www.youtube.com/watch?v=m2VxpTMAbas
Probably the only reason brokers loans had higher rates of inaccuracies was because the big 4 banks werent even bothering to use actual income and expenses. If your application for a mortgage is accepted based on things like HEM then you have no need to lie about anything, no matter how bad your servicing ability is.
So certain are you. There is a greater probability the banks will find another way to keep the show going then simply accept lower credit growth (30% ouch).
And the site it directs you to is brokerbehindyou 😀 😀
Not even hiding that they’re going to give you a bit of the ol’ #124
Do the brokers reckon smaller banks and those without a branch network will simply close up shop if brokers go?
You reckon Macquarie won’t think of another way to get some home loan business if brokers go?
Perhaps those banks will ADVERTISE and also HAVE BETTER RATES in order to attract business. You know – compete!
Doesn’t sound too bad for consumers.
F# ck off brokers.
I pretty much guarantee they will be gone without brokers doing the leg work for customers. I volunteer for an animal rescue charity – at least HALF the people who contact us cannot figure out how to download a form, fill it in, and email it back. Thats for an application to adopt a dog! These people then just go into a pet store and buy a puppy because its easier. Can you imagine how useless they will be in applying for a mortgage online, having to source and upload all the documents needed? Simply advertising a better mortgage rate is not going to cut it, when customers have a choice between a bank branch where everything is done for you, and having to do it all yourself.
Hmm. Yes ok – I am easily convinced by arguments reminding us that most people are useless or lazy, ie can’t or don’t want to do this sh!t themselves.
So why can’t brokers charge a flat rate which is not a commission but nor is it charged “up front” in cash – instead it comes out of the loan amount when the deal is done? This is similar to current arrangements but removes the conflicted incentives and makes it more likely the broker will act in the customers best interests.
Basically brokers don’t want any change because the current setup is soooooo creamy-sweet. But if they have any value at all, they should be able to adapt. Some will go out of business, that’s fine. The better ones will survive.
Kill all the dogs on sight. Save the time otherwise spent on them.
Work at a cafe with the time saved and leverage those earnings into MOAR property.
Because economic rationalist thingy.
A flat rate commission incentivises brokers to get customers to churn loans as rapidly as possible, rather than stick with the initially provided loan. This is 1 reason trailing commissions are used.
Yeah nah don’t think so kiwikaren – people will figure out how to fill out their mortgage application without the assistance of a TAFE dropout
I recall the days when the person taking out a loan had to pay for a mortgage broker.
I recall paying around $500 back in the 1980’s.
Brokers have been setup as the scapegoat. I mean, trail was ridiculous and many of them really aren’t the most moral of individuals so I don’t have a lot of sympathy for them, but if they end up taking all the blame and the big boys get away clean, I will be very disappointed.
It’s like taking the drug pushers off the streets and then patting yourself on the back at what a good job you have done while the main producers just keep on going.
Didn’t they just get the old mining tax scare ads and do a cut and paste?
Those mining tax ads worked very well!
Sacrificial Mules not lambs. Conduits for Credit/Debt pushers. The pushers knew that the retail end would be ambivalent but that the wholesale market was at arms length from scrutiny until it reached bursting point, The brokers were on the hook for retail fraud not the Banks or other financial institutions whether primary, secondary or tertiary et al lenders.
Its whats on their books that counts for or against them. Get some of these into court and they will rat the lot out all the way to the top.