News

Mortgage brokers to be included in the banking royal commission

21 December 2017

Mortgage brokers are now set to be included in the terms of reference of the banking royal commission.

The lead commissioner Kenneth Hayne QC has told the inquiry it will include the mortgage broking industry after consultation with the Federal Government.

The royal commission will now include intermediaries between borrowers and lenders where originally it was to look at just authorised deposit-taking institutions, banks, insurers, holders of Australian Financial Services licences and registrable superannuation entity licences.

The mortgage broking sector is responsible for more than half of every mortgage written in Australia and it surprised some in the industry when it was left out of the original terms of reference.

Mortgage and Finance Association’s Mike Felton told the Australian Financial Review that the mortgage broking industry has made a lot of progress in its professional development.

“WE have had two significant reviews in the past 18 months,” he said.

“Neither of these found systemic poor outcomes or systemic harm to consumers, which I believe will stand us in good stead, regardless of the direction the royal commission takes.”

Mortgage Choice CEO John Flavell said he was surprised the mortgage broking industry wasn’t included in the first place.

“Anything it could do to strengthen that offering would make sense,” he told Australian Financial Review.

“The challenge with any sort of regulatory change is that if you are adding some new rigour to the process, you want to make sure you are getting commensurate improvement in outcomes.”

Time will tell if outcomes for the mortgage broking industry will be improved after now being included in the banking royal commission.

Latest

The number of home loan borrowers going to a mortgage broker first is on the rise, while at the same time the number of people going to their financial institutions is falling.

Read more

Office buildings that lie outside Melbourne’s CBD are set to show strong price growth and are significantly undervalued according to a new office market report.

Read more

A good portion of the respondents went over budget by a significant amount, with nearly half of them blowing their budget by $30,000 or more.

Read more

Residential construction is on the wane but the cranes are still in the sky – moving over into the commercial space.

Read more