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  1. #1
    Join Date
    Jul 2017
    Posts
    232

    Default Are borrowers be willing to pay mortgage brokers directly?

    Out of Australia - from the royal commission

    Key possible business impact on mortgage brokers in Australia. Wonder if the regulators will bring this into NZ.


    Banking royal commission’s bombshell report: The key recommendations

    • When customers make use of a mortgage broker, they expect the broker to be acting in their best interests. But at the moment, that is not necessarily the case. Often brokers are paid fees by lenders, giving them a perverse financial incentive to work against the borrower’s interests.


    Mr Hayne’s recommendations will change the law to require brokers to act in the best interests of borrowers — not lenders, or indeed themselves. Any brokers who breach that obligation will face a civil penalty.


    And on top of that, brokers will be paid by the borrower, not the lender, after a transition period of two or three years.



    Source: https://www.news.com.au/finance/busi...p3Xrm0n4--swLs

  2. #2
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    736

    Default

    Paying the bank or mortgage is all pretty normal in NZ (commercial finance )

  3. #3
    Join Date
    Aug 2003
    Posts
    7,511

    Default

    It's really interesting. Borrowers know Brokers work for the lenders and the current model makes light work for the broker. With the paradigm shift the broker would have to work harder for probably less $$. Plus with the deep pockets, are the lenders really going to allow a level playing ground and compete without some sort of reward on offer for bringing them the business? There will be loopholes and it will be messy.

    Keen to hear from brokers in this discussion.

    cheers,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  4. #4
    Join Date
    Aug 2003
    Posts
    7,511

    Default

    I've done a bit of research - in the UK how mortgage brokers are remunerated is wide open - however there's more disclosure required so borrowers know exactly how the broker is paid.

    Some charge a flat fixed fee - and average is £500, and the broker is likely to also earn commission from the lender too. Some just get paid by the lender, others just by the borrowers with a percentage fee i.e. 1% of the loan amount.

    There appears to be more regulation and disclosure so the borrower better informed of how the broker is paid just like a Real Estate Agent.

    The same goes for the US.

    cheers,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  5. #5

    Default

    It would kill brokering to be honest. You'd be limited to hardcore property investors and traders.

    This would be VERY ANNOYING if it came to pass. I went to a broker because every time I contacted my bank the previous person had been shunted off somewhere and I had to start again, usually with someone who had no idea how investing worked. Ugh.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  6. #6
    Join Date
    Jul 2017
    Posts
    232

    Default

    The view from a mortgage broker

    Wellington mortgage broker Andrew Perry spells out how consumers would be hurt if Aussie banks weren't allowed to pay brokers commission



    Source: https://www.interest.co.nz/opinion/9...f-aussie-banks

    Last edited by donna; 09-02-2019 at 12:08 PM.

  7. #7
    Join Date
    Jul 2017
    Posts
    232

    Default

    Mortgage broker fortunes to be 'devastated' by Hayne changes


    The abolition of trail commissions paid to mortgage brokers will slash the value of these businesses from about 2 ½ times recurring to 1-times gross earnings, according to people who buy and sell brokerage businesses.



    Source: https://www.afr.com/business/banking...social_twitter
    Last edited by donna; 09-02-2019 at 12:08 PM.

  8. #8

    Default

    If a broker could come up with the right mortgage solution and save $X,000 from the other lenders, then I'd happily pay them a portion of that $X,000 as their fee.

    My first NZ mortgage was through a broker. The next 3 or 4 after that I'd get a broker to sniff around while I try my luck negotiating with a couple lenders myself. I found I always got as good as or better negotiating direct so have since stopped using brokers.

  9. #9

    Default

    The big banks in Aus are LOVING this. It will kill al their competition.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  10. #10
    Join Date
    Apr 2004
    Location
    Auckland
    Posts
    1,879

    Default

    What's wrong with paying them?
    Who has time to run around town meeting bankers?
    $1000 would be cheap for saving the time & hassle.
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.


 

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