Media Statements

The Federal Government’s regulations around mortgage broking, which were registered on the Federal Register of Legislation this week posed nothing new, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White AM said there has been no further developments and no changes since the Treasurer announced the details late last year.

However he said that while the Government listened to the concerns of the FBAA and the industry on many issues, resulting in few of the more restrictive recommendations being implemented, the FBAA and brokers were still not satisfied with the current state of clawbacks.

“The road with the Government on clawbacks was dead late last year, but the fight to bring balance and fairness to the system is very much alive,” he said.

Mr White said the spotlight needs to be on lenders, not the Government.

“Clawbacks are exactly the same as they were before the royal commission, and now it’s up to lenders to amend their terms.

“Who will be the first bank to do the right thing by brokers and reduce clawbacks to 12 months or less?” he asked.

He said banks had the capacity to amend the terms, and some are already doing it with their franchise operations.

“If a bank can offer a franchise zero clawback after 12 months, why can’t they offer it to the broking channel, which brings in such a high percentage of their business?”

The FBAA has been vocal about the issue for many years and would continue the “robust discussion” with lenders, Mr White explained.

“I can assure members and the industry that this battle is far from over. Brokers deserve a fair go and our role is to fight until brokers get a fair go. “We’ve achieved a lot over the last couple of years for the industry and I believe that our unwavering commitment to see justice done will eventually see results in this area too.”

The Finance Brokers Association of Australia (FBAA) will host its annual Get Broker FIT – R U OK? Day 2020 event on Thursday September 10 – but this year it will be digital.

With 2020 bringing more challenges than most people have experienced in a lifetime, the FBAA alongside their wellness supporter Suncorp are calling on the industry to come together nationally on R U OK? Day.

Pointing to the drought, bushfires and Coronavirus, Peter White AM, managing director of the FBAA, said brokers are not immune to the effects of mental health and many brokers have been personally impacted over the past year making it more important than ever to connect digitally at the event.

“R U OK? Day has a very special place in my heart and I took on an ambassadorship for this industry five years ago, because I could see what was happening to colleagues and friends of mine with depression and anxiety, and the way they were being treated and looked upon because of this,” he said.

“We’ve turned what was almost a taboo conversation into something that is commonplace and readily spoken about throughout the entire industry. It’s important for all of us to remember that it’s OK not to be OK.”

This year there will be two digital events on the day, making it more accessible than ever, with a line-up of wellness and mental health speakers helping attendees to unlock current potential and way of thinking.

The FBAA has placed a large emphasis on mental health over many years and Mr White labelled the industry “a close-knit family”.

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R U OK? Day webinar registration – Thursday, September 10

Morning Session: 11.30 AM – 1.00 PM AEST – https://attendee.gotowebinar.com/register/3262608749663608076

Afternoon Session: 3.30 PM – 5.00 PM AEST – https://attendee.gotowebinar.com/register/7908005794601708044

The Finance Brokers Association of Australia (FBAA) has announced the appointment of Clive Kirkpatrick as an appointed director to the association’s board, effective immediately.

Managing Director Peter White AM said Mr Kirkpatrick was “an extremely well known, respected and solid voice in our industry”.

He served most recently as General Manager Distribution for the Yellow Brick Road Group, firstly being responsible for Vow Financial wholesale aggregation before expanding to lead the Yellow Brick Road retail franchise business and Resi Home Loans distribution.

His previous roles include General Manager for Mortgage Broking at St George Banking Group and Head of Franchising at Rams Home Loans.

Mr White said Mr Kirkpatrick has a long association with the FBAA and recently spent time on the association’s concierge committee.

“He is one of this industry’s true gentleman who will assist to drive the FBAA into its next era with his significant past in lending and aggregation, and all that brings.”

FBAA chairman Tony Carter echoed these sentiments. “Clive brings significant skills and knowledge to our board table with his past roles as a lender and today joins the FBAA board without the conflicts it would otherwise bring,” he explained.

Mr Kirkpatrick said he was honoured to play his part in the FBAA’s future at such an important time in the industry’s history.

“The FBAA has played a vital role in navigating our industry through the massive challenges of the last couple of years, and I value its mantra of being run by brokers for brokers.

“I greatly admire the board and management’s genuine desire to progress the industry and their support for members, and I am looking forward to playing a role in the FBAA’s future direction.”

The Finance Brokers Association of Australia (FBAA) has backed a call from finance and mortgage brokers who want all banks to move to digital documents.

FBAA managing director Peter White AM said that in the year 2020 there is no reason for banks to mail time-sensitive loan documents that not only blow out settlement times for weeks but can potentially be lost in the mail.

Mr White was responding to commentary on social media platforms prompted by Blank Financial CEO Bernard Desmond who waited for a week for documents to arrive from only a few suburbs away, to find the package had accidentally ended up in Adelaide.

Mr Desmond wrote, “Australian Banks, please move towards digital documents. It will save everyone time and it will improve customer experience, reduce errors and get deals moving quickly.”

He went on to explain that the client’s settlement was due in two weeks and that he was “running against the clock.”

The post attracted a multitude of comments from other brokers with similar experiences, with the consensus that banks making billions of dollars in profits can easily digitise the loan process to improve customer service.

Mr White, who has previously called out some banks for taking over 40 days to even approve a loan, said the time added by sending documents through the mail made the process farcical. However he acknowledged that since the social media outcry he has been contacted by lenders who have committed to making the change.

“Electronic signatures are used and accepted legally across the world, and those banks that don’t embrace this will start to lose business as the broker channel looks to a more streamlined system for their clients.

The head of Australia’s finance and mortgage broker peak body has welcomed the Federal Government’s extension of stimulus packages but has also urged borrowers on a bank payment holiday to prepare for payments to restart.

Managing director of the Finance Brokers Association of Australia Peter White AM says banks have supported borrowers impacted by COVID-19, but it won’t last forever.

“The reality is that despite government assistance, some people may not see secure employment or their business recovering in the near future, and the recommencement of mortgage payments will be a burden they cannot bear.

“If you feel that your situation is such that you will not be able to meet ongoing repayments, now is the time to consider your options,” he urged.

The first step is to see a local mortgage broker who can discuss options with the borrower’s best interest being first and foremost, and Mr White revealed brokers across the country are reporting a significant increase in these types of enquiries.

However he warned that many lenders won’t consider refinancing a borrower under a bank stimulus program.

It may be that the best option for those with no likelihood of a job is to sell their house, put some money in the bank, rent for a while and buy again when their situation improves, according to the 40-year industry veteran.

“For some, the alternative is defaulting on their mortgage, the bank taking possession and walking away with no money and a bad credit rating.

“You are far better off to be in control of your destiny than allowing the bank to take control as they will act in their own interest and that of their shareholders.”

If borrowers make the tough call too late, houses may be more difficult to sell and sale prices lower, therefore the loss could be much greater, Mr White explained.

“There is no advantage in holding off and hoping, when we don’t know what the market will likely be after the stimulus payments stop. There may be a glut of property suddenly on the market.”

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Peter White’s advice for borrowers unsure if they can meet repayments when they recommence:

1) Immediately see a finance and mortgage broker and discuss refinance options.

2) If there are no options available, talk to your bank and ask for an extension of the payment relief.

3) Act quickly and control your destiny. If you don’t believe your situation will improve, consider selling sooner than later.

For the third year in a row, the Finance Brokers Association of Australia (FBAA) will hold its highly anticipated Industry Commercial Masterclass Week – but due to COVID-19, all seminars will be digital.

Following an opening address by the minister for employment, skills, small and family business Senator The Hon. Michaelia Cash and FBAA managing director Peter White AM, finance expert Peter Switzer of Switzer Financial Group will MC the week-long sessions, which runs from Monday July 20 to Friday July 24.

All webinars are free, and everyone in the industry is welcome to attend, including non-FBAA members.

The commercial masterclasses will offer unique insights into market outcomes post COVID-19, commercial loan submissions, leases, cash flow, new technology, customer focus, industry challenges, lender support and more.

The highlight of this action-packed week of commercial lending education is sure to be the live Q&A panel session on July 24, with representatives from Get Capital, Pepper, ING, ThinkTank, PRP and Tenant Leasing Group discussing the changing market.

Attendees can count 0.5 CPD per Tuesday – Thursday session and 1 CPD hour for the Monday and live panel session to meet their CPD requirements.

The FBAA 2020 commercial masterclass week will consist of speakers from Lend, Speedy Finance, ING Group, Pepper Money, ThinkTank, Get Capital, VOW Financial, PRP and Tenant Leasing Group.

Further details of the commercial masterclasses can be accessed here: https://www.fbaa.com.au/upcoming-webinars/.

Mr White said that the week was even more important this year due to the challenges created by COVID-19.

“The commercial masterclasses support the industry by showcasing best practice and bringing experts together to discuss ways we can successfully navigate the post pandemic landscape,” he said.

With new placements opening for the First Home Loan Deposit Scheme (FHLDS) on July 1, the Finance Brokers Association of Australia (FBAA) has urged brokers to contact potential borrowers now to take advantage of the limited numbers.

FBAA managing director Peter White AM said the new financial year presented an opportunity for brokers as 10,000 new placements will become available under the scheme, but borrowers would be assessed by the lender and will require a copy of the notice of assessment from the current 2019/20 year as evidence of their taxable income.

“The places that were available in January have gone, and due to the wider knowledge of the scheme, I’d expect the new 10,000 will be taken within a few months,” he said.

The FHLDS requires eligible borrowers to have a taxable income of no more than $125,000 for individual applicants and no more than $200,000 for couple applicants.

“This is the time to be working with borrowers to ensure they are ready to do their tax returns quickly, or they may miss out.”

According to Government figures, the broker channel represented 44 per cent of initial applications for the scheme, increasing to 50 per cent from February when the non-major lenders joined and NAB opened to brokers.

One broker who has helped many first home borrowers navigate the FHLDS process is Anita Marshall, managing director of Advanced Finance Solutions, who backed Mr White’s call.

“Mortgage brokers have a unique advantage because we are here to guide the clients through the process and help take the confusion out of buying their first home.

However she said brokers need to be proactive.

“I’ve found the scheme easy to use, but now my priority is making sure my clients are prepared so they can obtain a loan. It’s always a joy to work with first home buyers and share this monumental experience with them.”

The Finance Brokers Association of Australia (FBAA) has put lenders on notice to eliminate “clubs” that favour brokers based on volume before BID comes into effect.

FBAA managing director Peter White AM says lenders are still giving preferential treatment to brokers who write higher volumes despite the Combined Industry Forum (CIF) and legislation to be introduced ending volume based incentives.

“This disadvantages clients of other brokers and makes a mockery of the intent of this move.”

Mr White said some lenders are still prioritising business based on volume and taking far longer to start the process of the loan applications from brokers who don’t write enough for them.

“By way of a current example from a broker, without volume, it takes nearly an hour on hold for your call to be answered, and up to 30 working days for your application to be picked up. In some cases this is extending to over 40 days.”

He compared this to the one to eight days it takes to process an application submitted by a broker that is meeting a certain lender’s higher volume expectations.

“This unfair – and I might suggest immoral – behaviour is unacceptable”, he said, pointing out the irony of good quality borrowers being disadvantaged because their broker was acting responsibly and in their best interest.

“With the BID soon to be implemented, how can a broker claim to act in the best interests of a client with this sort of pressure from lenders?” he asked.

The association also warned that the industry would again come under increased scrutiny if these practices were allowed to continue.

“We all put a lot of effort into taking the steps necessary to end volume-based broker clubs, and we are better off for it, but the industry’s reputation will take another hit if brokers are again perceived to be favouring certain lenders based on anything other than what is best for the client.”

The Finance brokers Association of Australia (FBAA) has called for standardised documentation around service level agreements to speed up loan discharges for borrowers wanting to change lenders.

FBAA managing director Peter White AM says brokers are increasingly reporting that banks are taking 14 to 30 days to finalise discharge documents, even after many approaches and requests.

“This appears to be an intentional ploy by the banks that I believe is based on them attempting to cushion their monthly bottom line but also to buy time so that their staff can continue to reach out to clients and try and retain them with incentives.”

He said banks must realise that they will pick up loans just like they lose them, and the more they delay and disadvantage customers the less likely those customers will ever return.

“I’d suggest that if a bank is experiencing a major outflow of loans then maybe they need to consider taking a look at their products and evaluating if they are meeting the needs of the borrowing marketplace.”

Decades ago it took around 30 minutes under a manual process to write up loan discharges and around three days for the entire process to be completed and Certificate of Title to be issued, according to the industry veteran.

The solution, Mr White explained, is to create better service level agreements which “in this day and age should be a no-brainer, as all requirements by lenders are largely the same.”

He says universal, standardised loan discharge agreements, loan application forms and privacy act forms should all be available in today’s marketplace.

“When we have platforms like PEXA creating universal e-settlements as well as the likes of Green ID and others, there are no real barriers to make these universal forms a reality.”

Borrowers lured into low fixed interest rates by banks “trying to buy business” may regret their decision unless they also carefully examine the variable rate product of the lender, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White AM says while fixed rates can be the best option, brokers should ensure that clients understand “caveat emptor”, or “let the buyer beware”.

He said the big banks have the resources to offer lower fixed rates which look attractive, yet when it reverts to the variable rate the borrower may find they have a loan that is unsuitable.

“We want to ensure that our clients are not trapped,” he warned.

“Borrowers may eventually find themselves with a variable interest rate that is not the best for their particular circumstances, and they may be prevented from changing lenders due to lender fees, new valuation costs and maybe even LMI insurance.”

He said this is the reason people should use a finance broker, and emphasised the importance of borrowers having access to smaller banks and second tier lenders that offer excellent long-term products.

“Borrowers will never consider these options if they only look at the immediate fixed rate.”

He said while the BID has been briefly deferred, it will come into force and brokers have always had an obligation to ensure loans are not unsuitable.

“Banks have no legal obligation to act in the borrowers best interest and if they can seduce you with a low starting rate they will, and they can whack you later,” he said, adding that the same applies to mortgage websites.

“It is imperative that borrowers obtain a thorough examination of their needs and desires for a mortgage that is not unsuitable for them now but more importantly in the coming years.”