In separate press releases in the past few days, both ASIC and APRA have raised questions in public forums, differentiating broker-introduced loans from in-bank loans.
On Tuesday 25 August, APRA Chairman Wayne Byres warned banks to exercise “appropriate care” when underwriting credit introduced to them for consumers they have never met. In the same speech, he again quoted APRA-collected statistics that show that introduced loans have a higher likelihood of default.
Whilst the first statement is more directed at lenders; and the second may be statistically, factually accurate, it is yet another apparently blatant attack on mortgage brokers.
Meanwhile, in an ASIC report released on 20 August, it states that interest-only loans are more likely to have been introduced by mortgage brokers. However, what ASIC fails to mention is that the proportion in question is around 55% - around the same as the TOTAL split of loans that originate from brokers!
At QED Risk Services, we are somewhat dumbfounded as to the motives behind these very loaded statements. Perhaps there is none. Perhaps it is just another case of inflammatory journalism. Either way, the best advice that QED can give brokers is simply to keep on doing a good job as you do.
One aspect is clear however – in this environment where the regulators are powerless to tackle the big issues and independent, small businesses like brokers are an easy target, we need to ensure our house is in order.
If you are unsure about your NCCP obligations or are uneasy about the current regulatory environment, keep up-to-date through our website at www.complifast.com.au/mortgage-brokers and, if you’re not already using it, make sure you subscribe to the QED CompliFast service. For $50-odd per month, it is the best protection and peace of mind you will ever get.