Leading property Analyst and Developer Chris Anderson has welcomed the news that the federal government has confirmed that mortgage brokers will be included in the Royal Commission into alleged misconduct in Australia’s banking, superannuation and financial services industry.
Mr Anderson says he’s been advocating for the inclusion of the Broker sector for months.
Intermediaries between borrowers and lenders have been added following the government’s consultation with the appointed Commissioner on the draft Terms of Reference.
“You only have to look at the sorry history of the mortgage broker industry to understand that some of these so-called experts have feather bedded and then ‘Bali bailed’ for party time. They are the lowest of the low and need jail time, not exemption.”
Mr Anderson says you only have to look at the sorry history of the mortgage broker industry in this state to understand that some of these so-called experts have feather bedded.
“Old favourites’ by Brokers such as “churning”, or moving people from existing loans to another to double dip on commissions, packaging superannuation and unnecessary insurance into loans, all in the guise of better deals, need to come under the commission’s’ spotlight.”
“Then there’s the locking people into fixed loans when rates are clearly stagnant or dropping, the over valuation of a property, the stacking of assets to secure loans, the lists of trickery are endless.”
“The best I have seen are brokers that tell their clients particular banks or institutions ‘won’t service their requirements’ because the broker wants to push them towards a loan with another intuition that pays the broker a better commission.”
Mr Anderson says if ever there was any doubt of the need for the mortgage broker/financial planner sectors to be front and centre of this inquiry one needs to look no further than UBS research released earlier this year.
“It shows the Mortgage Broker industry is charging almost double what fees should be per mortgage and these payments are a clear illustration of excesses built into the average loan.”
“Then there’s the unnecessary ‘ad ons’ like unnecessary trauma insurance coverage and life coverage they add on to the mortgagee simply to get a fatter commission take.”
“The real damage and fifth rests with some in the mortgage broker and financial planning sectors-They are crooks frankly who are hiding behind those shiny franchise shingles we see everywhere.”
Mr Anderson says the Inquiry has one chance to get it right.
“I ask those affected to step up and submit. Let’s rid ourselves of the used cars salesman one-day, mortgage and finance experts the next operatives. Then, maybe, the Bali bound cocktail swillers and Queens who haunt the sector will disappear and the market will return to a sensible professionalism and more regulated, level playing field.”
The royal commission will examine allegations of misconduct or conduct which falls below community expectations. The commission will be focused on identifying ways to ensure that Australia’s financial system continues to work efficiently, effectively and in the interests of consumers.
Commissioner Hayne is authorised to submit an interim report to the Governor-General no later than 30 September 2018, and required to submit a final report no later than 1 February 2019.