Media Statements

The Finance Brokers Association of Australia (FBAA) says it is concerned that some banks are attempting to stop mortgage brokers using certain automated rate tracking and repricing systems to analyse their back books, in order to prevent existing customers from accessing lower rates.

FBAA managing director Peter White AM said the FBAA is aware that some banks are threatening brokers with de-accreditation if they use certain tracking programs.

“They appear to be claiming it is a privacy issue, and while this may be legitimate in some cases, I don’t accept this is the entire reason or even the reason at all in some cases,” he said.

“If banks are using this as another way to increase profits, it would be quite unconscionable as it means customers are being intentionally disadvantaged.”

Mr White said mortgage brokers have a responsibility to work in the best interests of their clients, and part of this commitment is to review rates.

“Any attempt to outlaw automated rate tracking and repricing systems prevents mortgage brokers from properly servicing their customers.

“We all know that many banks love rate creep for their existing clients while they offer great incentives to new customers.

“But when back book pricing isn’t being reviewed it’s the customer who loses out, and over the long term the amount could be significant.”

He said brokers should be embracing technology because manual tracking is not as effective, and “the banks know this.”

Banks are sending the wrong message to customers and instead should be embracing price reviews, according to Mr White.

“Lenders must understand that doing the right thing generates customers for life.”

He said some banks only try and look after customers when they receive a discharge authority.

“Time and time again we see banks offering better rates only when the customer is considering, or starts the process of, refinancing.”

“I’d urge banks to instead encourage back book reviews by whatever way is best for borrowers and the most professionally proficient for the broker, and maybe the customer won’t need to consider refinancing.”

With rawness and vulnerability, mortgage brokers have revealed the anger, anguish and personal pain they have experienced due to clawbacks.

The comments were provided to CoreData as part of the monthly broker poll conducted for the Finance Brokers Association of Australia (FBAA).

FBAA managing director and industry mental health awareness ambassador Peter White AM said the association has led the fight against clawbacks for some time and has seen small gains, but much of the discussion centres around the financial impact.

“These responses highlight the personal toll of clawbacks and the uncertainty and unfair loss they represent.

“These are real human consequences and I want to ensure that lenders and government read these,” he said.

While much of the feedback from brokers focused on the unfairness of the system, the effect on cash flow and the difficulty in budgeting, 28 per cent reported being negatively affected emotionally.

One broker said, “Apart from the obvious effect clawback has on cashflow, there is also a psychological toll that it takes on both the business owner and the brokers,” while another, “It is a constant worry in my mind.”

“Loss of motivation, loss of productivity, frustration with industry,” was how one broker described their feelings, while another pointed to, “uncertainty in your mental well-being.”

“A very bleak Christmas,” said another, with one broker providing a one word response – “Depression.”

Mr White said while he recognises that change won’t happen overnight, the FBAA continues to advocate for further progress.

The poll also suggested a solution, with eight in ten brokers calling for “proportional and/or reduced clawback” while over half “seeing value in establishing national clawback standards.”

Mr White urged any finance and mortgage broker who is struggling emotionally to seek help.

“This is the reason we established an online Wellness Hub, which provides not only a source of information for brokers, but a way to connect them with someone who can help.”

The FBAA Wellness Hub can be accessed at www.fbaa.com.au/about-4xt3bb/practitioners

Aspiring property owners are increasingly uncertain about their chances of affording a new home and are willing to purchase with smaller deposits, while the majority of renters fear being forced to move by their landlord, new research commissioned by the Finance Brokers Association of Australia (FBAA) has revealed.

FBAA managing director Peter White AM said while many of the findings in the ‘FBAA Buyer Renter Index Research’ were not surprising, it emphasises that “the Australian property dream is still well and truly alive, but governments must work harder to help people achieve it.”

The research found that half of those surveyed were planning to purchase residential property in the next five years, while 30 per cent say they can’t afford it during that timeframe.

Mr White said the Reserve Bank (RBA) should also be listening.

“There has not been an interest rate change since 2023 and it would not surprise me if they again left it unchanged this week,” he said.

“But the clear message from this research is that people are crying out for help and support in the area of government and regulatory policies.

“They desperately want to own property but are demanding action to help them.”

He said while the FBAA commissioned research, by CoreData, reflected the uncertainty and insecurity felt by many Australians, it was clear that Australians were working hard to achieve their property dreams.

“They don’t want handouts, but they do want policies that make it easier for them, not harder.”

He said an interest rate cut sooner rather than later would be a huge confidence boost, while he repeated the FBAA’s call for the government to intervene and force the regulator (APRA) to immediately reduce the serviceability buffer rate from its current rate of 3 per cent.

Mr White also urged potential buyers to see their broker and get all of the “pros and cons” before purchasing with very low deposits.

“What many buyers don’t realise is that there are often more purchasing options than they realise and some of those options can only be accessed through a finance and mortgage broker.”

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Key findings of the ‘FBAA Buyer Renter Index Research’ include:

• Just over half (53 per cent) of those intending to buy in the next two years think it’s a good time to buy, but despite this, 70 per cent say they are actively looking.

• More than half of buyers now look to deposits of less than 20 per cent, and 54 per cent of prospective buyers plan to purchase a property with less than 20 per cent deposit, meaning they will need to take out lenders mortgage insurance or seek alternatives like guarantor loans.

• Rental instability is high, with 54 per cent of renters feel likely to be forced to move or have their contract not renewed. 74 per cent say they face difficulty finding a suitable property, signalling a lack of renter security.

• More than one in three (34 per cent) of participants anticipate their incomes will lag growth in house prices over the next five years.

• Compared to men, women are less certain and less optimistic about income growth in relation to house prices.

• 39 per cent of those with loans are showing signs of potential mortgage stress (allocating more than 30 per cent of their income to mortgage payments).

• 59 per cent of those who do not own property are dissatisfied with government tax policies, while 47 per cent are dissatisfied with government housing grants.

• Only 28 per cent of those who do not own property are satisfied with government social and affordable housing programs.

The decision by the Australian Prudential and Regulation Authority (APRA) to leave the mortgage serviceability buffer at 3 per cent has been labelled nonsensical by the peak body representing Australia’s finance and mortgage brokers, who has accused the regulator of not acting in the best interest of Australians.

The Finance Brokers Association of Australia (FBAA) has called on the federal government to intervene and force the regulator to reduce the buffer rate, which is preventing thousands of Australians from purchasing a home and forcing thousands more to remain in ‘mortgage prison’ unable to refinance.

FBAA managing director Peter White AM said while a 3 per cent buffer was appropriate in the past because interest rates were at an all-time low and were always going to rise significantly, “it is ridiculous when interest rates are higher.”

“We have a scenario being played out across Australia where people who have been paying their mortgage without default are being prevented from refinancing to a loan with a lower monthly payment.

“How crazy is a situation where we are forcing borrowers to pay more during a cost of living crisis; not because they can’t afford it, but because of a regulator who refuses to see logic?” he asked.

Mr White also pointed out that the high buffer rate was preventing first home buyers from securing a home in the middle of a housing crisis, putting more pressure onto the rental market.

“To secure a mortgage many potential borrowers must prove they can service a loan more than $1500 above what their repayments will actually be.”

While acknowledging that a buffer rate protects both the banks and the borrowers, he said interest rates are going down in most western nations.

“We can’t live in the past and a buffer of 1.5 to 2 per cent is far more appropriate today and in the near future.

“APRA can reassess the rate on a regular basis so I’m not suggesting it can’t be raised in the future.”

Mr White said its time for the government to force the regulator’s hand to stop them hurting borrowers further.

Managing director of the Finance Brokers Association of Australia (FBAA) Peter White AM says positive changes to clawbacks are happening across the industry following sustained lobbying by the FBAA over the last few years.

Welcoming the move by AMP Bank to change its clawback structures, which comes after several other lenders have also revised their clawback structures, Mr White said he always stated that the journey was a marathon, not a sprint.

“The FBAA, representing all finance and mortgage brokers, has for years been leading this fight, meeting with all stakeholders including lenders, regulators, and senior government ministers across various governments, and we have openly and loudly challenged the current systems and structures.”

“While I don’t want to overstate these advances, and acknowledge there are still mountains to climb, neither should we as an industry take these gains for granted,” he said.

“Every small change is a change for fairness and common sense, and has come about through a lot of work in the background, not by accident.”

He pointed out that earlier this year Federal assistant treasurer and minister for financial services Stephen Jones joined representatives from the FBAA, aggregators and finance brokers from across Australia at the FBAA national office to honour his promise made to Mr White before he was elected.

At the time he said it was the first time the industry at-large had ever met with a relevant federal minister to specifically discuss clawbacks and other important issues at such depth.

Mr White said lenders are starting to realise that the clawback system is flawed and unfair.

“While I welcome recent moves by AMP and a host of other lenders including some of the major banks, be assured that we will continue to fight for fairness and bring more change.”

He said as well as clawbacks, other issues the FBAA will continue to fight for include net of offset commission payments, APRA buffer rates, and bank practices that disadvantage brokers.

Finance Brokers conference on Gold Coast launches Australia’s first independent finance knowledge portal – Today, Friday Nov 1

Buying a home is the biggest decision most Australians will make, but it’s also the most confusing.

If terms like ‘mandatory comparison rate’, ‘amortisation period’, ‘parental leave option’, and ‘break costs’ leave you confused, then help has arrived in the form of a new website – www.beforeuloan.com – designed to give you the information you need, without trying to sell you anything.

It’s being introduced to the public for the first time during the Finance Brokers Association of Australia (FBAA) annual industry conference at Royal Pines Resort on the Gold Coast on Friday November 1.

FBAA managing director Peter White AM said the association’s motivation was to help people understand finance better.

“Too many Australians don’t understand finance or lending, have little knowledge of what all of the terms mean, and the options available to them,” he said.

“No one is teaching people about this subject, and this lack of knowledge about finance is limiting many people.”

Mr White said one of the major mistakes borrowers make is focusing only on interest rates.

“The most important thing when buying a home is to ensure you get the loan that is best for your individual circumstances, and while the interest rate is important it’s not the only factor.”

As well as explanations on terms, www.beforeuloan.com includes everything you need to know when borrowing for a home, car or business, information on the types of loans, articles by leading finance brokers, and numerous calculators.

Mr White explained that unlike most online calculators, you don’t need to provide personal information.

“We thought that as finance and mortgage brokers are the experts in these matters, we should be providing this information with no strings attached.”  

He said while just over 70 per cent of borrowers use a mortgage broker and receive their advice and knowledge, some borrowers – including first time buyers – will not compare products, and if refused may believe that’s the end of the road for the foreseeable future.”

“The rejection by one lender doesn’t mean they won’t be approved by another, and many options including non-bank and second tier lenders are available.

“Before you see anyone about a loan, check out beforeuloan.com so you have the information required to ask the right questions and understand what you are being told.”

As the FBAA’s annual National Industry Conference commences on Queensland’s Gold Coast, managing director Peter White AM said the industry is facing a challenging year ahead due to what he says is an effort by some large banks to undermine brokers in order to generate more direct business.

Mr White will share with delegates that he is concerned that, “some banks want to return to the practices of the bad old days and ignore the findings from both the Sedgwick report and the Hayne royal commission.”

Prior to the conference, he said that various banks have been publicly attacking brokers for some time, “and we can only see this as an attempt to undermine the broking sector for their own gain.”

“If this is the case, it’s a short term and quite stupid strategy considering what the broking sector delivers to lenders and consumers,” he said.

Mr White pointed to recent comments by bank CEOs and moves by some banks to reinstate increased bonuses for their bankers, something he said was incentivising the risk of bad behaviour.

“I’ve said this before but the banks would love less competition like they had in the past, but the world has moved on and Australian consumers will never stand for that.”

He called on banks to accept the will of Australian borrowers who overwhelmingly use brokers and pointed out that many lenders rely on the broking channel exclusively.

“We want to work well with the big banks, keeping in mind that they are the lender and get the business, so it’s not actually competition.”

Mr White said he understands that banks exist for their shareholders, however they are “indisputably making massive profits for their shareholders.”

“When profit becomes greed at the expense of consumers it’s time for this to be called out.”

Mr White believes banks will keep pushing the boundaries over the next year and issued a warning.

“Brokers will always abide by their best interests duty obligations, but will also support banks that support competition whenever they can.”

New research released by the Finance Brokers Association of Australia (FBAA) reveals that brokers are securing the most business from repeat customers, signalling high levels of trust in the industry.

The Monthly Broker Poll, which is conducted among FBAA members by CoreData, found that nearly three in five brokers (57 per cent) have at least 50 per cent repeat customers, while a quarter (26 per cent) have 70 per cent or more. The proportion was the same for both mortgage and finance brokers.

At the same time, it found that brokers with a higher proportion of returning clients had a more positive view of their business performance. Over three quarters (76 per cent) of those reporting at least 60 per cent repeat customers said that their business is doing the same or better than this time last year.

FBAA managing director Peter White AM said the findings “clearly show that building strong customer relationships is the key to success in our industry, as clients can often become clients for life.” 

“We cannot underestimate the importance of good customer service and putting our clients’ best interests first,” he said.

Highlighting the importance of repeat business even more, the poll also revealed that many brokers found lead generation challenging. One in three brokers (33 per cent) said that generating leads was the biggest challenge for their business over the last six months, in particular finance brokers (38 per cent).

“Existing clients provide the biggest opportunity for leads,” Mr White said, adding “Brokers should always be asking for referrals.”

He said the high level of trust that brokers have with clients is our greatest asset.

The FBAA’s Consumer Access to Mortgages 2023 report revealed that 86 per cent of mortgage broker clients trust their broker. This trust directly leads to long-term and repeat business, with 83 per cent of mortgage broker clients stating they would continue to turn to a broker for assistance with their next mortgage application.

Feedback from members as part of a poll conducted by CoreData for the Finance Brokers Association of Australia (FBAA) has revealed that 60 per cent of finance and mortgage brokers have experienced delays in loan processing over the past six months, a figure labelled as unacceptable by the association.

FBAA managing director Peter White AM said while it was not surprising as he has previously highlighted the issue, the lack of responsiveness from lenders was frustrating.

The survey also highlighted other issues brokers faced when dealing with lenders, with 45 per cent citing “poor communication from lenders” and 39 per cent “technical issues with lender systems”.

“The fact that so many brokers regularly face these issues when processing loans indicates not only that the system is inefficient, but that some lenders are not making any effort to improve,” Mr White said.

Members also listed “inflexible requirements for borrowers” (35 per cent), “complex documentation requirements” (31 per cent), “post-settlement issues” (30 per cent), and “lack of transparency in lending terms” (26 per cent) as difficulties.

Mr White has previously called for standardised documentation around service level agreements to speed up loan discharges for borrowers wanting to change lenders.

“Three years ago we reported that banks were taking 14 to 30 days to finalise discharge documents, even after many approaches and requests, and I think many brokers still have a distrust of lenders’ motives.”

“Recent comments by the CBA and Westpac have made it clear that some banks are intentionally trying to discourage business through brokers, so it’s not unreasonable for brokers to suspect that delays are being intentionally ignored.”

He added that banks must realise that the more they delay and disadvantage customers, the less likely those customers are to return.

“This recent poll shows that some lenders are still not doing well enough. They need to improve their processes and their communication.”

One solution, according to Mr White, is to create better service level agreements.

“Lender requirements are largely the same, and universal, standardised loan discharge agreements, loan application forms and privacy act forms should all be available in today’s marketplace.”

The big banks have learnt nothing from the Hayne royal commission and hate competition, according to the head of the Finance Brokers Association of Australia (FBAA).

Peter White AM hit out at comments targeting broker remuneration made by the heads of the Commonwealth Bank, NAB and Westpac to Federal Parliament’s Standing Committee on Economics as they defended their move to ignore the royal commission’s recommendations and lift bonuses and commissions for their lending staff.

He said dragging brokers into the conversation was a “smokescreen to deflect from their own bad practices.”

“Both the Government and Opposition understand that broker remuneration is fair for brokers and consumers, and after endless reviews over many years the matter is settled.

“Everyone has moved on except the bank bosses who cannot stand that fact that brokers bring competition to the market,” Mr White said.

Calling the comments laughable, he said “they don’t even hide their greed anymore.”

“The big banks want a monopoly and clearly the billions of dollars of profits they make every year isn’t enough.

“At the core of this matter is the desire by the banks to incentivise the risk of bad behaviour.

“These incentives can and do result in bank staff encouraging borrowers to refinance even if it’s not in their best interests.

Mr White explained that while mortgage brokers are legally obliged to act in the best interests of their customers, “banks are not, and they cannot because they are selling a product.”

He also pointed out that the royal commission was never about mortgage brokers who didn’t have the opportunity to defend their position.

“This was a royal commission into poor bank superannuation and financial services conduct, and how quickly the big banks have forgotten the stories of the countless people whose lives were ruined due to their conduct.”

It was irrelevant comparing brokers, who as small business people have no regular pay or safety net, to bank staff, he explained.

“A mortgage broker may earn nothing one month and the next month may make money only to have the risk of a clawback.

“If the banks care about their lending staff so much they should increase the base salaries,” he said.