The federal government has been approached by an association of mortgage and finance brokers to intervene to stop banks delaying the mortgage transfer process.
The Finance Brokers Association of Australia (FBAA) has taken part in an invitation-only roundtable event hosted by federal small business minister Bruce Billson in which the lobby group raised the issue of banks “sitting on discharge requests”.
“Banks are notorious for holding onto a customer's mortgage as long as possible and we urge them to stop this unfair practice,” said FBAA chief executive Peter White.
Describing the lack of regulation over the approval and settlement process as the “crux of the problem”, Mr White said consumers are losing out under the status quo.
“If banks know they have a limited time frame, we wouldn’t have lenders sitting on dischargers for as long as they want,” he said.
“Time is money and while banks make more through maximising revenues and fee charges, the customer is the one losing out. This delay impacts consumers and especially small businesses who need to take advantage of commercial opportunities.”
The broker lobbyist suggested delays in the mortgage approval process were causing negative consumer perceptions of lending institutions.