Major mortgage company Yellow Brick Road (YBR) has dismissed recent reports condemning mortgage brokers.
On the weekend the Herald Sun published an article linking mortgage brokers to financial planners and claiming brokers are involved in ‘murky backhand commissions and sweetheart deals’ from major banks.
Chief executive at YBR Tim Brown told Australian Broker it was ignorant to liken brokers to financial planners.
“Comparing mortgage brokers to financial planners is like comparing apples to oranges,” he said.
“The system is transparent with all commissions declared in the credit proposal given to the clients.”
“The Yellow Brick Road Group currently has over 35 lenders on the panel and all are used at different times depending on rate or product feature, commission does not even come into play when making sure the client gets the right product.”
The article in the Herald Sun also claimed there was little chance mortgage brokers would recommend a loan from smaller, independent lenders other than the big four.
“The big four have a pricing advantage over the smaller lenders because of scale,” Mr Brown told Australian Broker.
“As an industry we have raised this with the Government and they have advised us they are happy with the competitive landscape of home loans.”
“The Yellow Brick Road Group generally averages 25-30 per cent of our loans written outside the big four banks providing increased competition to a variety of choice for consumers.”
Mr Brown also denied claims that loans organised through mortgage brokers were more likely to default than other loans.
“We have yet to see any proof that substantiates the claim of higher arrears through mortgage brokers,” he said.
“The data we receive from lenders consistently shows us otherwise.”
“Regardless, the banks make the credit decisions, not mortgage brokers.”