Thursday, February 14th, 2019
At first glance, people reading the news about mortgage brokers in this post-Royal Commission climate could assume that mortgage brokers are the bad guys in a Robin Hood-esque scenario that has pitted financial institutions against the average Australian.
But it’s important to dig a little deeper and examine where the real issues lay.
Although it is the biggest of our banking giants whose fees and charges deserve to come under close scrutiny, it seems the loan brokers who make it their business to find better deals for lenders that have been made the unwitting scapegoats.
But with some banks proven to be charging exorbitant fees to everyday Australians trying to secure the finance they need to make their lives better, don’t we need experienced, ethical loan brokers and mortgage brokers more than ever?
In the news articles that have flowed since the findings of the banking Royal Commission were announced last week, it’s positive to see both lenders and aggregators actively supporting the Mortgage and Finance Association of Australia’s (MFAA’s) recently-launched campaign to defend mortgage brokers.
This grassroots campaign is all about encouraging Australians to seek out their local MP and write a letter of support for an industry that has its heart in finding the best possible deal for customers.
It’s all about making sure the big banks don’t kill the competition that currently exists in the lending sector – the same competition that helps consumers of loan products shop around and find lending solutions that are tailored to suit their unique circumstances.
A proposal to create a ban on broker commissions paid by lenders is a knee-jerk reaction being suggested without talking to the thousands of happy mortgage broking clients who know they have secured better finance deals because of the advice and support a professional mortgage broker has shared.
Although the complete abolition of trail commissions and the removal of upfront commissions, in favour of a borrower-pays structure, makes it seem like borrowers are being looked after, the fears for the mortgage broking industry include the reality that clients will lose their ability to
shop around and source deals that suit their individual situations – something that will have a very real impact on borrowers who may not meet the exact demands for lending criteria that a monopoly of big lenders will become stricter about enforcing.
With Treasurer Josh Frydenberg announcing that the government will remove trail commissions from 1 July 2020, the future for tomorrow’s borrowers is at risk and with less loan choices adding up to costlier loans that will have a significant impact on household budgets for ordinary
families, making your voice heard to the people in power is a smart strategy to regain the freedom that access to mortgage broking support has previously offered.
MFAA data showing that 59.1% of home loans were introduced by mortgage brokers reveals the reality that Australians appreciate having plenty of lending options but with the threat of reduced choice, home ownership dreams of the next generation of potential home-owners could
be put on hold unless action is taken.
To help support the industry that supports you, go to https://www.brokerbehindyou.com.au and sign the petition.
For advice about how a mortgage broker can give you greater access to better deal on your next loan, talk to our loan broking professionals at Loans Actually today.