In September 2019, the Australian Securities & Investments Commission (ASIC) reported that one in 10 consumers who took out a home loan via a mortgage broker were 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.
Now, ASIC has acted on recommendations from the Hayne Royal Commission and issued guidance on the new best interests duty obligations, in a bid to ensure that brokers do the right thing by customers:
Mortgage brokers will be required to properly investigate a home buyer’s circumstances, keep detailed records of loan recommendations and decline to sell a mortgage if they don’t have the right product under the new laws to be introduced at the end of the financial year…
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