Media Statements

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.”

The Finance Brokers Association of Australia (FBAA) says the decision by ASIC to defer the commencement date of the mortgage broker best interest duty (BID) and remuneration reforms was a welcome and necessary move.

However FBAA managing director Peter White AM said he has sought further clarification from ASIC on its statement that it would “continue to work towards releasing final guidance on both reforms in mid-2020.”

“Given the regulatory guide was due in May, we need some clarity from ASIC as to when it will be out, as mid-2020 is subjective.

“Once the guidance is at hand the FBAA will be conducting a series of education and compliance training for implementing BID.”

Mr White said the decision to push back the implementation date is “a credit to not only the work of the FBAA who has been lobbying Government to push this back since last year, but to all the relevant bodies in our industry and to brokers.”

“This has transpired due to the faith and trust our Government has in the broker community and our professionalism and integrity.”

The Finance Brokers Association of Australia (FBAA) says the announcement by the Australian Financial Complaints Authority (AFCA) to extend the post IDR refer back timeframe for complaints by nine days to 30 days is helpful in the current difficult times.

FBAA managing director Peter White AM said this will enable people to manage this process while still dealing with their personal and business challenges during COVID-19.

“It’s good to see that AFCA has been working with their regulator ASIC to be able to do this, and everybody is cooperating to create this outcome,” he said.

A letter to key stakeholders from chief ombudsman David Locke said, “This will allow more time for our members to resolve complaints using their internal dispute resolution practices, and where that can’t be achieved, it will provide them with more time to consult and communicate with their customers, and to locate the necessary documentation and information needed for AFCA to consider the matter.”

The ombudsman said the time extension will come into effect immediately and will initially “operate for six months and will be reviewed and adjusted as appropriate.”

Mr White also revealed that the FBAA has seen a significant reduction in complaints compared to the time of the royal commission.

“The FBAA has always had a very good internal dispute resolution process and we are not even seeing one complaint per month at the moment, which is a credit to the professionalism of our members.”

He said the FBAA recently launched its Broker Support Program (BSP) to help members through this period, “and the ombudsman is doing his part to make things easier.”

With the uncertain market due to the COVID-19 pandemic, finance and mortgage brokers can now add to their income options through a partnership between the Finance Brokers Association of Australia (FBAA) and international money transfer company ‘Send’.

The service provides international transfers for both individuals and businesses at a rate lower than banks, with faster processing, usually next day.

FBAA managing director Peter White AM said brokers are often dealing with clients who need to transfer funds overseas or they may need to transfer money themselves.

“As brokers will be paid a commission, this will assist them and their clients.”

Send co-founder Ian Cragg said he was excited to support FBAA members and their private and SME clients globally.

“Collaborating and working together to help each other in times like this is as important as ever.

“By offering cheaper, faster and better international payments than the banks, Send helps thousands of Australians transfer money more efficiently and cost-effectively.”

He said brokers can promote the service to clients for many reasons, “including assisting an SME to pay a foreign supplier when importing, expats living in Australia, Aussies overseas, and real estate investors.

“An increasing reason at the moment given the current climate are money transfers to support family members around the world who are struggling financially with the COVID-19 outbreak.”

Mr Cragg said the response from brokers to date has been overwhelming.

The FBAA recently announced a broker support package to help members during the current crises, and Mr White appealed to brokers to always be looking for new opportunities to expand.

“We should take advantage of partnerships like this and keep increasing our services.”

The Finance Brokers Association of Australia (FBAA) has today announced the establishment of the FBAA Member Broker Support Program (BSP) as it ramps up efforts to help brokers through the current economic crisis that has resulted from the Coronavirus pandemic.

The BSP freezes any review of FBAA membership fees until after July 2021 and allows members to pay the current fees in instalments. But while these financial benefits are a part of the package, the focus is firmly on helping members maintain strong businesses and in the words of managing director Peter White AM in an email to members, “come out the other side on a ballistic rocket journey to success!”

Mr White said while the entire industry is adapting and has been through many challenges before, he’s conscious that some members are facing difficulties.

“This is a time for the industry to stand together, and the BSP is about caring for our member family both in a business and personal sense.”

The FBAA Member Broker Support Program offers the following for members:

• Membership fee payment plan – pay current fees over three instalments.
• Freeze on review of membership fee increases until after July 2021.
• Collateral assets to help you generate business – a regularly updated package of bespoke videos, blog content and social media content for the use of brokers under the slogan – “Call your broker”.
• Call Your Broker’ Blueprint – a customer support strategy blueprint for brokers to implement within their business right away. It is an industry specialist designed program currently being used.
• Weekly Q&A support – Hosted by Peter White and featuring guests, “Your Voice, An Open Q&A with Whitey” will be online every Thursday at 11:30am.
• New educational opportunities.

To launch the initiative, the FBAA has sent an email to members encouraging them all to stick together.

“This is the start. We are developing other ways to help members, and our number one goal is for brokers to remain strong so that they can not only survive but thrive now and when this is all over,” Mr White said.

The Finance Brokers Association of Australia (FBAA) has moved professional development days (PD) online and created new ways to connect with brokers as the nation enters a ‘no personal contact’ era due to COVID-19.

FBAA managing director Peter White AM, whose travel schedule normally sees him in a different part of the country each week meeting with government ministers, regulators, industry participants and members, is spending his days online working from his home, and says it has its benefits.

“In one way not being able to meet in person is restrictive but the flip side is that less travel gives me the opportunity to talk to more people online,” he said.

“Connection is vital and we have been very proactive to ensure members stay connected to us and to each other.”

The association’s online PD days still operate by state with local moderators and four to six different speakers. Mr White also conducts online meetings with government ministers, staff and the board, and has introduced a new weekly Q&A, where he answers members’ questions live.

“My regular video blogs will continue and of course social media is a great way of communicating too.”

He said it is business as usual for most brokers who are trying to adapt and be more innovative.

FBAA chair Tony Carter has produced a “working from home guide” which will be sent to members next week. It includes practical tips on how to set up a home office, managing your day, planning and goal-setting tools, and health tips.

“It’s definitely a new world right now, and while the industry is adapting as best it can, we must also be aware that some brokers will be hit hard financially. The FBAA’s message to members will always be to contact us if you need support,” Mr White stressed.

Finance and mortgage brokers have been warned to expect an inundation of struggling and distressed clients as the economy plummets in the wake of job losses and business closures.

In a notice to its national membership, the Finance Brokers Association of Australia (FBAA), the peak body representing finance and mortgage brokers, has told brokers that the current Coronavirus pandemic will affect them directly on multiple fronts.

“In over 41 years in this industry I’ve seen many recessions and major issues like the GFC and others, and while the current situation is unprecedented in terms of scale, it’s not difficult to predict many of the effects,” FBAA managing director Peter White AM told members.

While urging brokers to transition to an online model or “be impacted financially”, he said the industry must be ready to guide stressed clients to lenders who can help them in their time of financial hardship.

Mr White also urged brokers to look out for signs that clients might be experiencing mental health issues.

“Remember that people will be worried, particularly at the possibility of losing their family home or business. If you are concerned about the mental health of a client, encourage them to seek help and do anything you practically can to assist them,” he suggested.

However, he said that the flip side for brokers is an increase in new borrowers and those wanting to change lenders as interest rates fall to record lows, housing prices drop and lenders compete for business.

“New home buyers and investors will emerge to take advantage of a weaker market, and we must be able to deal with this at the same time as helping our clients in need. This is important for business viability.”

In an acknowledgement that brokers themselves may struggle over the coming months and even years, he said, “Protect your own health and wellbeing. Practice social distancing and adhere to other recommendations from health authorities. You can’t help clients if you are sick.”