The Australian Securities & Investments Commission (ASIC) has reported that one in 10 consumers who take out a home loan via a mortgage broker are finding it hard to meet their repayments within 12 months. ASIC’s research also found that although consumers generally expect a mortgage broker to secure the most suitable home loan for them, 58% were offered just one or two loan options by their broker, while many brokers recommended just one loan. ASIC commissioner Sean Hughes says lenders and brokers must make it easier for consumers to compare loan options. From The Australian:
ASIC commissioner Sean Hughes labelled it a tipping point in the market and called for brokers to act in the best interests of their customers.
“There’s clearly a sense of disappointment on the part of consumers who use brokers that they’re not getting the best deal. There’s similarly a sense of fatigue, where consumers are initially quite excited about the process of sourcing different options but then it all gets too hard and they end up taking one so they can just get it over and done with.
“We want to encourage competition in the market and if people are feeling beaten down by the process then they’re not getting the best deal. That doesn’t suggest that it’s a healthy competitive environment,” Mr Hughes told The Australian…
“ASIC strongly supports the recent government announcement to enact a best interests duty for mortgage brokers. Importantly, the implementation of such a duty will align the role of brokers to the reasonable expectations of consumers,” Mr Hughes said…
Mortgage brokers originate more than 50 per cent of new home loans in Australia.
Hilariously, this comes only two weeks after chief mortgage broker parasite, Aussie John Symond, slammed ‘over-regulation’ of the market:
The founder of Aussie Home Loans, John Symond, says the housing market has turned a corner but both he and ANZ Banking chief Shayne Elliott believe that ‘over-regulation’ could threaten its recovery and pose risks to the broader economy.
…”It’s one of the biggest risks of the next 12 to 18 months for the housing market actually getting back on its feet.” Mr Symond, the chair of Aussie Home Loans, told the packed theatre of mortgage brokers at the International Convention Centre in Sydney on Monday.
…”Until we get clarity, we are just going to stay away. It’s just too hard.”
The mortgage broking industry has already fought off the Hayne Royal Commission’s recommendation that trailing commissions be abolished and that banks stop paying upfront commissions to brokers. It is also trying to leverage its influence within the Coalition to overturn common-sense rules requiring the industry to act in the best interests of its clients, as applies for financial planners.
Mortgage brokers must be giddy with the re-election of the Coalition. Labor’s negative gearing and capital gains tax reforms are dead. They get to keep their fat trailing commissions against the advice of the Hayne Royal Commission. And they retain as Prime Minister a key sympathiser for (and former representative of) the property lobby.
It’s back to business as usual.
