A mortgage broking association has urged its members to capitalise on APRA’s recent criticism of bank lending practices.
FBAA chief executive Peter White said brokers now had an opportunity to differentiate themselves from banks, after the prudential regulator warned last week that some banks are engaging in “less-than-prudent” mortgage practices.
“Finance brokers have been rigorously checked year after year and, through the NCCP, industry compliance and regulatory standards have never been better,” he said.
“Unlike some of the banks, brokers follow rigid instruction for lending procedures. They look at the total capability to repay and service the debt and fully abide by responsible lending practices.”
Mr White said one big difference between banks and brokers is that the latter offer personalised service.
This is a message that brokers should continually deliver to consumers, he added.
Mr White’s advice comes after APRA chairman Wayne Byres warned last week “the current economic environment for housing lenders is characterised by heightened levels of risk”.
That is due to a combination of low interest rates, significant house price growth, high household debt, subdued income growth, rising unemployment and strong competitive pressures, he said.
“Many of these features have been emerging over a number of years, and APRA’s supervision has been intensifying in response,” he said.
Mortgage brokers were responsible for 51.9 per cent of new home lending in the March quarter, according to the industry’s other broker association, the MFAA.