TOPIC:

What do people think should happen, they are currently engaged in a desperate campaign to save themselves from the impending reforms from the RC.

I come from a pre MB era when you just went to a bank, building society or credit union and applied for the loan. Things seemed much simpler back then.

Then they introduced middle men so to speak, who you thought were acting for you but as it turns out were actually paid by the bank and got trailing commissions for years on loans on the loan they sold to you the consumer, an obvious conflict.

Haynes reckons Consumers should pay for the service to keep it independent, I see a lot of merit in this, it will also determine if consumers really want them, and mortgage brokers will be working a lot harder to get your business. Then again it will thin them right out, most people wont pay for the service, I guess that says a lot.

Bazza wrote: What do people think should happen, they are currently engaged in a desperate campaign to save themselves from the impending reforms from the RC.

I come from a pre MB era when you just went to a bank, building society or credit union and applied for the loan. Things seemed much simpler back then.

Then they introduced middle men so to speak, who you thought were acting for you but as it turns out were actually paid by the bank and got trailing commissions for years on loans on the loan they sold to you the consumer, an obvious conflict.

Haynes reckons Consumers should pay for the service to keep it independent, I see a lot of merit in this, it will also determine if consumers really want them, and mortgage brokers will be working a lot harder to get your business. Then again it will thin them right out, most people wont pay for the service, I guess that says a lot.

Baz this is not an easy one but people should realise that if brokers go by the wayside it wont save the consumer a cent, the banks will take back that job through their internal finance officers and that charge will be built into the mortgage, but at least the whole process will be more transparent.

Glad you brought this up Baz I was going to myself. I've always used mortgage brokers but also gone directly through the bank. So I've kind of "Used them" to suck it and see what they can offer, then gone to the bank and said hey this is what a broker can do for me, what can you do? It's always worked in my favour.

Unfortunately since lending has tightened right up I was forced to get a loan through a non bank lender last time just over a year ago because I wasted my time with the Commonwealth Bank mobile lender who misled me from the start. What she said in the beginning conflicted with the final decision and I was furious. Thankfully the broker saved the day for me which I was very grateful for.

SS is spot on, no way the banks will pass on any savings to the consumer if brokers are cut out, they don't offer you any better rate now so why would they if brokers fees are paid by the borrower up front?

It would simply result in less competition for the banks. Maybe they could introduce a cap on trailing commissions of say the first 5 years of the loan? Also the government watch dog (more like a Labrador) should limit how many mortgage brokers and non bank lenders they (the banks) can gobble up. At the height of the non prime market there was so much choice out there with Aussie, Wizard, Rams etc. The big 4 banks gobbled them all up which is to the detriment of consumers and Paul Keating has said the Commonwealth Bank should never have been allowed to take ownership of Bankwest and I agree with him.

DD wrote: Glad you brought this up Baz I was going to myself. I've always used mortgage brokers but also gone directly through the bank. So I've kind of "Used them" to suck it and see what they can offer, then gone to the bank and said hey this is what a broker can do for me, what can you do? It's always worked in my favour.

Unfortunately since lending has tightened right up I was forced to get a loan through a non bank lender last time just over a year ago because I wasted my time with the Commonwealth Bank mobile lender who misled me from the start. What she said in the beginning conflicted with the final decision and I was furious. Thankfully the broker saved the day for me which I was very grateful for.

SS is spot on, no way the banks will pass on any savings to the consumer if brokers are cut out, they don't offer you any better rate now so why would they if brokers fees are paid by the borrower up front?

It would simply result in less competition for the banks. Maybe they could introduce a cap on trailing commissions of say the first 5 years of the loan? Also the government watch dog (more like a Labrador) should limit how many mortgage brokers and non bank lenders they (the banks) can gobble up. At the height of the non prime market there was so much choice out there with Aussie, Wizard, Rams etc. The big 4 banks gobbled them all up which is to the detriment of consumers and Paul Keating has said the Commonwealth Bank should never have been allowed to take ownership of Bankwest and I agree with him.

I agree with you and Keating that they should not have been allowed to take ownership of Bankwest, although after pandering to the free market and privatizing the Commonwealth Bank it should have been not that hard to see coming. And Keating did that, maybe if the Commonwealth Bank had stayed in Government hand none of this crap with the banks/mortgage brokers would have happened.

Banks already claw back the Mortgage Brokers fees, although they pay the Broker to get the loan, they claw it back from the borrowers eventually...

We keep hearing that big banks would dominate if MB were removed, I'm not convinced of that, if a Broker was only paid based on the best deal he could get you then he is going to work harder and harder get a better deal, at the moment, he works for himself to get the best commission he can on the product he flogs, that to me stinks of a rort.

To me there was more diversity in the market in the 80s, anyone my age would remember the vast number of building societies and credit union around in Perth during that time.

R and I
NSW
ANZ
Commonwealth
CBA ( Commercial Bank of Australia )
CBC
National
Home
PBS
Town and Country
WABS
British BS
United Credit Union
Port Credit Union
CSA Credit Union
and many others...

Bazza, I don' t agree. the various brokers I deal through for my clients work hard to get the best deal for clients, Referral business is their bread and butter and it would be stupid to bite the hand that feeds you.
People should be willing to pay up front.
Surely on a loan of $300,000, paying $2000-$3000 up front is better than paying 0.5% more, you are in front after two years of payments.
Borrowers don't know where to look for cheaper options, the banks won't tell them.
Banks have special rates for different types of clients if they think they need more diversity in their portfolio.
Your bank is not going to tell you that another bank has a special on,
They tell the brokers.