Are Mortage Brokers Really Impartial?

It has been interesting to read recently about “The Big 4” placing quotas on brokers who want to be able to sell their products.

A good example is that recently one of “The Big 4” wrote to nearly 8,000 brokers, telling them that the had to write at least 4 applications and have at least 3 approved in a six month period to maintain their rights to sell their loans. If they do not comply with this, the broker will have to pay a fee of $500 to re-gain accreditation.

It makes you think, what if you were talking to that broker and looking for the best deal. If that broker had not met his “quota” that month, would you not be steered to a loan for this provider as opposed to another loan that may suit you better?

It seems to me, that if these brokers are acting for a bank that has a minimum quota, that they are effectively just an agent for that bank…not the impartial advisor that they may advertise…

With the introduction of the National Consumer Credit Bill soon and these actions from the large retail banks, I believe the “Broker” industry will have some very challenging times.

The founding principles of the Credit Union movement are based around us being a Trusted Advisor to our members. We do not have “Third Party Quotas” and our staff are not paid by commission. The aim is to ensure we provide you with the best product we can and exceptional service always.

Paul
Lending Manager

July 22nd, 2009 | Leave a Comment »