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Hi mortgagedetectiveI felt compelled to join this forum based on your input to this topic. You are missing the point in your reply as to why a broker receives commission in the first place. It is so that they get paid for introducing a lender, and to be able to earn a living.Your assumptions fall flat, because you feel you are seeing the situation as a way for the consumer to get the best deal. My question is, is it not the broker in the first place who is able to provide the consumer with a much wider choice in the first place and in doing so allowing the borrower a better chance to consider the costs. It is far more likely that a broker will show a client the huge savings to be made, rather than when a borrower goes directly to a lender.Are the true costs “AAPR” the correct way to determine how much someone can save. For example you mention a borrower getting back some of the costs, so that it can either be put into an offset or paid directly against the loan. The big question being, why should someone’s wages (brokers commission) be considered as a way to get the best deal in your view? It is far too short sighted to think that commissions are purely wages either as they form part of the business’s costings. Where does the marketing get paid from? Running cost etc?Let’s take things right back to a time before deregulation. There were no mortgage brokers, then suddenly the mortgage became the tool to create wealth about twenty years ago. The introduction of the broker was born and so came the need from the banks to play ball. It was tough at first but now we see that brokers write 40% of loans. The interest rates are not calculated with this in mind. If a bank deals directly with a customer the rate stays the same, and so why do you wish to bring into contention the possibility of a borrower getting some of the commission back? Sure another business referring a lead is a different story, as that could be business otherwise missed out on.If the broker has saved the borrower fifty thousand on the life of the loan for example in the first place by pointing out a lender who doesn’t charge monthly fees for example or fees on a redraw facility for the offset account you mention why should the broker take further savings on the chin?Sure I can see your wishes to help the consumer, but you are looking at ways to bite off the hand that feeds you so to speak. As it is, the banks are trying it on right now as their profit margins are broadened, and any measure to make things tighter for the broker will only be of negative effect for the consumer. But luckily the whole process revolves in cycles and the balance will change again. Then we will see more competition in the marketplace and add more of a restrictive force against an almost monopolisation we are currently experiencing. Did you know by the way that there is no legislative authority that the banks have to answer to. Go and ask the bank ombudsman to see how true that is, and you will be amazed.My suggestion is, when coming up with plans to monitor the ways in which a consumer can seek the best deal, is it not wiser to see the bigger picture.
