Recently, there has been a lot of extra whinging from numerous mortgage brokers that the time and effort required to prepare a loan application has increased, and wait for it, wait … it is eating into their profitability.
They sight noticeable differences in the way home loans are assessed by lenders and subsequently, wait for it, wait … in lender turnaround times over the last couple of years (coincidental it began with the commencement of the Royal Banking Commission into Misconduct in the Banking, Superannuation and Financial Services Industry).
What these whinging brokers fail to do is to tell, before they feebleminded whinge, is how much of the commissions they earn they squander on so called ‘referral partners’ for flicking a consumer’s name and contact details in exchange for a hefty kickback.
It is not unusual for these brokers to squander as much as 40, or 50 or even 60% of their commissions in paying kickbacks in favour of these referral partners!
Are these referral partners licensed? Are they members of AFCA? Do they hold Professional Indemnity Insurance? What would ASIC do about it?
The adage, to make 40% of $1 instead of 0% of $1 is certainly well fine tuned, rehearsed and practiced in the industry.
The National Consumer Credit Protection Act 2009 (Commonwealth) contains the Responsible Lending obligations for credit licensees such as banks, credit unions, non-bank lenders, finance companies, mortgage and finance brokers.
The Act and the Responsible Lending obligations of the Act have not changed since 2009.
So, what has changed since 2009? The Royal Banking Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The property boom has caused greed and avarice among lenders and mortgage brokers to sell as many loans as they could and as fast as they could, in fear that the next lender or mortgage broker or both will get the consumer’s loan first.