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MPA sits down with customer-owned bank representatives

  • Mansfield making a name for herself in mortgage broking

    2020 MPA Young Gun Rebecca Mansfield has effectively transitioned into a successful mortgage broking career

  • Mansfield making a name for herself in mortgage broking

    2020 MPA Young Gun Rebecca Mansfield has effectively transitioned into a successful mortgage broking career

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    Choosing a customer-owned bank to manage your home loan is becoming more appealing for Australians every year as the allure of traditionally low interest rates, no upfront fees and low ongoing fees make for an attractive option.

    The banking world is forever-challenging however, and Mortgage Professional Australia sat down with customer-owned bank brokers to grasp a greater understanding as to what their point of difference is and how the banking climate is compared to that of years past.

    Each representative was asked a couple of questions pertaining to the future of broking, where they spoke in-depth about how lengthy processes and adapting to policy changes is going to be the industry norm.

    How have you seen your workloads changing over the last year?

    Christopher Lee – MFAA head credit adviser, Finsure Finance and Insurance: I think the obvious change for us all, not just brokers, but also credit assessors, BDM’s and banks overall are the living expenses. When I first entered the mortgage broking industry I was always educated around responsible lending and thoroughly having that conversation with the customer around living expenses. So for myself it’s not too much of a change, however, there’s a number of additional forms as every bank has their own procedures and policies. So from that perspective you don’t know what you need to be prepared for until that customer has made their final decision on who they want to go with. Additionally, I’ve seen every bank is different with their requirements, with some banks wanting to see three months upfront, everyday transaction statements or even active credit cards as a mandatory.

    Mark Middleton – Teachers Mutual Bank Limited: CCR (cash on cash return) open banking; I’ve seen that more recently. I go online and look at finder.com.au and every month I get sent a credit report and I can see my credit risk climbing. Also, processes are being made harder because the level of details brokers have got to form an opinion to say yes, it’s just got over the top bureaucratic. We’ve lost deals because we’ve asked questions, and they’ve wanted to come to us. We’ve asked the right questions but they’re going this is well and truly over the top and they’re demonstrating their making payments. They’re not happy with their current bank, but they’re being made to stay.

    Darren McLeod – Beyond Bank: There’s no correlation between looking at somebody’s expenses and arrears. As an example, I went to America last year on a study tour with CoreLogic and we went to LoanDepot which is the fourth biggest broker there and spent a day there looking at the credit process and loan applications. I asked where are all the living expenses and they were confused as to what I was talking about. I proceeded to ask how much they were spending on groceries and they couldn’t understand why I would need to know all of that. That may not be the model we want to adopt.

    David Merison – Vault Plus Mortgage and Finance Consultancy: The credit assessors in the banks, and I’m not here to defend the majors, but as a credit assessor in the banks they know they’ve got this ASIC person sitting over their shoulder when they’re looking at something. So i have some sympathy for them, our level of assessment was probably here and it needs to be there, but we’ve taken it where it should be. As a broker, we’ve all got some more work to do. I’m not whining, just like IT we need to embrace it. So that’s okay, I decided to embrace it some time ago. I know now that I not only need to ask a lot of questions – I need to ask investigative questions. I’m yet to have any pushback from my clients and I think that’s because they know it’s due to somewhat of a hangover from the royal commission. It’s our job to articulate not only what we need but why we need it.

    How are you as customer owned banks helping them through their challenges?

    Mark Middleton: Being open and transparent in conversations with brokers and the rationale for it; as long as there’s a reason for it, they’re open to the conversation and the rationale of why you’re asking for it. They’re aware that it’s tougher out there and there’s more regulatory lobbying and our files can be questioned at any time. So as long as there’s consistency across the market from any lender, is it over the top? Probably. Yeah I think it is over the top. I’m not saying we go the United States model, but it needs to be something in between. If it’s making it tougher, people become prisoners of their mortgage in one location rather than being able to move it. I think regulators want them to be able to look after the consumer, and I think it comes behind the ethos of what mutuals are about, looking after the consumer. However, when you make it so tough to move like the level we’ve got at the moment, they become that prisoner. CCR and open banking may address some of the RG209 and its issues, so hopefully in 12 months we’ll be having a conversation to say things have improved.

    Darren McLeod – We get great satisfaction from letting every broker that gives us a deal know that we’re really investing in our broker support team to assist them, especially a new broker. We get so many new brokers, and I understand it’s hard when you’re working with four or five lenders for potentially a number of years, so you can’t expect to know everything about every lender – therefore the broker support team is there to help them. We consistently get positive feedback about our assistance.

    Christopher Lee – It’s probably not a common conversation I have but one thing I highlight with the mutual banks is around the fact that the customer service is unmatched in terms of even the second tier banks and the major banks where it tends to be quite robotic. The service really stands out, so after I settle a loan with a client, I’ve hardly had to deal too much with clients that I’ve taken to the mutual bank because the mutual bank takes ownership of the client. They take it seriously, they don’t just palm it back to me; and they take care of what needs to be done post-settlement. Every one of us have had issues as customers even with major banks so that’s one of the things I’d definitely highlight with my clients, but before we even get to that conversation I’ll screen them and see if that bank is right for them.

    Stewart Saunders – Heritage Bank: I think there are a number of points that we’ve touched on. I think firstly, we’ve been very active as a mutual bank group working together to address some of these areas, so we meet quite regularly to discuss how they’re dealing with some of these challenges. That way we can share feedback from our brokers, from our internal teams and try and have a more consistent approach in how we deal with some of these areas. There’s been a real benefit for us. We are small; we don’t see 30% of the market, so we do have to share those insights to make sure we can deliver a more consistent proposition. Secondly we’ve been very active in industry discussions like the Combined Industry Forum, MFAA industry levels and we support the aggregators that we’re on in terms of their education programs and we participate with our BDM’s that are very passionate in supporting brokers as well. So I think we see a really positive way that we’re able to support brokers and I hope you do see that consistency when you’re dealing with us. It’s a very exciting time for brokers to have to say I’m legally obligated to act in your best interests. And as an industry we grapple with what that means, and there’s a big opportunity with mutual banks in terms of how we can meet that need – because if you’re concerned around how your bank looks after you in 30 years, you’ve got organisations here where there are no shareholders which will get priority. We talked last year about being the best kept secret; I still don’t think the understanding is there. As brokers move into a new era of best interests’ duty, I’d challenge them to better understand what the difference with customer-owned banks is and how do they think about that when they meet their best interests’ duty.

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