Interesting broker article

The chief of the Mortgage Industry Association of Australia, Phil Naylor, noted that 74 per cent of the consumers enlisted for the investigation were reasonably confident or very confident with the broker they dealt with.

Non-disclosure of fees represents only 5 per cent of the complaints made against mortgage brokers to the Credit Ombudsman Service, the service’s manager, Bernhard Ripperger, said.

>So you’ve got 3/4 of cusomers very happy with their broker, and less than 5% about the costs…

Seems to me as another media beat up. As for the examples – there are plenty of bad apples in every sector of our society (used car salesmen, etc).

Rgds.
Lucifer_au

mortgage brokers charge fees to borrowers, residentialwealth? I didn;t know that- I thought they worked for credit providers, and got paid by them.

Simon, I remember seeing an article like that before. Would mortgage brokers be obliged to disclose to clients if they have a “special interest” in a particular bank or financial institution? Or is the deregulated nature of the industry such that no disclosure is legally enforceable?

The “late night visit” thing is not a bad thing, I reckon. Most property investors work for a living, so when else are we supposed to get it sorted? I guess in many industries, they might call that being “customer-focussed” or “flexible” to clients’ needs. I thought my mortgage broker was great on his late night sojourns. [king]

But as with any industry, clients have a right to know if they are being casually coerced into a product if the broker is receiving kickbacks.

A bit or regulation won’t kill that sector. I wonder what form it will take though.

kay henry

Two-thirds of the brokers investigated claimed to offer independent or impartial mortgage advice even though their recommendations came from a limited pool of lenders.

that is exactly what my feel in this industry.

Julian [worried]

THERE IS ALWAYS A BETTER WAY!

“Two-thirds of the brokers investigated claimed to offer independent or impartial mortgage advice even though their recommendations came from a limited pool of lenders.”

There are only 4 banks, and they are THE major lenders, so I am not surprised to see this comment, it’s kind of like there are two companies that make sugar, and someone saying that Supermarkets only buy from a limited number of sugar companies… Well Duh’.

Media beat up. Though it is slightly worrying about fees, but it would be better for the people ti check out a number of mortgage brokers to find one that suits their needs…

Rgds.
Lucifer_au

I agree with Julian. Brokers should not be allowed to use the words “independent” and “unbiased”.

The existence of different commission rates impaires perceived and actual independence.

That’s not to say that some (lets hope most) brokers act in the clients best interest.

Cheers

Stu

So you’ve got 75% of customers happy with their broker, and less than 5% of complaints are about costs…

“It’s easy to use those words when we don’t like what we read.”

What don’t I like about this article??? The fact that most people are happy?? The government wants to intervene?? Most complaints aren’t even on this problem???

Yet why write an article about this, if most complaints are not even focused on this area??? Why not write an article on the major reason for complaints?? O’h cause it is easier too… As I said before – Media Beat Up.

“But then again, I have never received an overseas trip!”

Become a loan Nazi – ‘No more loans for Your bank!!!!” You could get one then.. perhaps… Heres hoping ;->.

Rgds.
Lucifer_au

Hi Brendon, In answer to your question,,,
Yes you can get the same service for free elsewhere, From myself and I presume the other Mortgage Brokers who regularly contribute to this forum,
Regards
Steven
Mortgage Broker

[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
Victoria

PLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.

Let us be clear about one thing i.e. that if you deal with a bank direct you, sure as anything, are only going to be offered their product.

Furthermore it is quite possible that you will be gently pushed into a particular product because that happens to be to the bank’s advantage.

In addition to this there are many other good reasons why it is to one’s advantage to deal via a broker.

Remember this however, for a normal type of loan proposition most brokers wouldn’t charge a fee to the borrower so from that point of view it pays to deal via a broker.

Simon said : ‘I did get a coffee cup a year ago from a lender.’

Gee, you did allright. [king]

One lender offered to take me out to lunch a year ago if I brought in a (big) loan we were discussing.

I did bring the loan to him but I am still waiting for the lunch. [grrr]

Pisces

Stuart said : ‘I agree with Julian. Brokers should not be allowed to use the words “independent” and “unbiased”.’

The word ‘independent’ means in my book ‘not tied down to the one lender (or a small number of lenders if you like).

The word ‘unbiased’ has got nothing to do with
being independent and merely means that the broker is using his best judgement in selecting the right kind of lender irrespective of whether or not some football tickets are being waved in front of his nose.

I am actually wrong there as a loan office working for a bank is under pressure to bring in particular type of loans (the ones which the bank thinks are the most profitable) and therefore not being independent (as in a loans officer employed by a bank) often means that the loans officer is likely to be biased.

In practice it comes down to the broker selecting (or suggesting) the lender whose criteria will fit the borrower’s circumstances.

Often the broker (or one of his clients) has experienced problems with the lender (who may be slow in giving an approval or hard to satisfy or slow to settle or who may have a myriad of other problems.

Anyone who thinks rates are everything better think again.

Generally there is very little between the mainstream lenders as far as rates are concerned.

I cannot speak for other brokers how they act as most of my loans are loans with a problem somewhere but my priority and sole aim is to match the borrower with a suitable lender at a reasonable rate (football tickets nothwithstanding (I have never received any).

I imagine that brokers who solely select a lender based on the brokerage they pay are few and far between.

The only exception I can think of is the NAB who until recently didn’t pay a brokerage fee to the broker (and since then have adopted a fee system which in my opinion is laughable).

Therefore a broker would likely be charging the borrower a fee in that case.

However, most brokers would instead channel any NAB loans through their subsidiary HomeSide (who do pay normal type of brokerage).

Pisces