Mortgage Brokers May Not Be Happy

[donna]

HI All,

I got this email recently and thought I'd share it with you........

Finance and Mortgage Advisers Association of New Zealand


February 13, 2025

Media Release

Mortgage advisers alarmed at ComCom proposal that will be “shocking for consumers”

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has revealed recommendations by the Commerce Commission to supposedly “promote price competition and choice for home loans” would in fact be disastrous for consumers.

FAMNZ country manager Leigh Hodgetts revealed the commission has requested mortgage advisers to provide clients with a least three “actual offers” to consider and “to submit multiple applications on behalf of their clients”, or face “government intervention.”

Calling the recommendations a solution looking for a problem, she said any such move would hurt consumers by driving up costs, blowing out application times, and affecting their credit ratings.

“Let me be clear. They are not requesting three quotes, but three actual applications and offers, something unheard of anywhere in the world that I’m aware of.”

“Three lenders all processing applications for the same applicant means they will be spending time and resources for loans they know they will likely never get, while other borrowers will be forced to wait and may even miss out on properties,” she explained.

FAMNZ managing director Peter White AM said it was “bureaucracy gone mad”, and has called on commerce and consumer affairs minister Andrew Bayly to immediately intervene.

“The crazy thing is that nothing is broken.

“Mortgage advisers already promote competition, consumers are increasingly choosing to use advisers, and complaints are almost non-existent.”

He said despite FAMNZ attempting to educate the commission on the way advisers worked for the past year, “they clearly still have no idea and now want to make things worse.

“Furthermore, this requirement puts at risk clients’ credit records, which is simply unacceptable and I believe unethical.”

Ms Hodgetts said while advisers could provide multiple choices of lender where possible, only one application should be submitted at once according to the customer’s needs.

“And in some circumstances, for example with self-employed people, there may only be one option,” she explained.

Wow - as if it isn't hard enough making a buck as a mortgage broker!

Regards,

Donna

[brokerman]

This is pure ComCom BS and here's why.

There is good healthy competition already so the problem they are trying to fix does not exist. Banks in New Zealand are all pretty much the same in terms of rate, it's policy that differs and ComCom are also saying that we should focus purely on rate, more BS.

As an Adviser is no biggie to submit to three banks
The problem is that a bank only approves on floating rates until the loan offer is unconditional and that may be a Valuation and banks do not accept other banks reports. There are also heaps of other conditions that may need to be satisfied at the consumers cost. Only then do the bank issue rates (all of which are public info any on sites such as interest .co.nz)
So, the banks will be processing 1000's of application that will go no-where at huge cost so who pays?
The Adviser, No.
The Bank, er No.
Ah, it's the Consumer and for no benefit, perceived or real.

ComCom were advised over a 12 month period by Advisers, Banks and Professional bodies and ignored all of them.
Again pure ComCom BS and John Smalls interview on RNZ last week was pathetic, a bureaucrat trying to justify his $300k plus salary.

Rant over!

[donna]

^^ So what's next? This is a 'proposal' - can it be knocked down and out? I may be wrong but it seems mortgage brokers are in the line of fire here. Consumers can just go direct to a lender aye.

I highly rate the role of mortgage brokers and it's concerning that many leave the industry if this takes hold.

[brokerman]

Who knows! Andrew Bayly does not seem to support ComCom.