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MFAA: CEO Phil Naylor: "mortgage brokers are NOW a trusted source"

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Phil Naylor, CEO of industry body, the Mortgage & Finance Association of Australia (MFAA) said recent articles are completely without foundation --asserting mortgage brokers did not act in the best interests of borrowers,"...mortgage brokers are now a trusted source of home loan information & cost effective products,..about 41% of all home loans in Aust are now written by brokers, the vast majority thru MFAA, which ensures the highest professional, training & disciplinary standards for the protection of consumers, ..transparency is a key aspect of how mortgage brokers operate, ..it is unfair to assert that brokers are not providing unbiased & comprehensive information as it is published in the loan docs borrowers review & sign."

Mortgage Choice CEO Michael Russell says, "...licensed mortgage brokers most certainly working in customers’ best interests, ...and are required by law to always act appropriately, ...they can be assured that ASIC oversees stringent national legislation that imposes strict obligations on mortgage brokers to always make lender and product recommendations that are aligned to customers’ requirements, objectives and financial circumstances,” Russell says.

 

Mortgage brokers required by law to work in customers’ best interests: 'Mortgage Choice'

By Larry Schlesinger
Tuesday, 27 November 2012

Mortgage Choice CEO Michael Russell says licensed mortgage brokers “most certainly working in customers’ best interests” and are required by law to always act appropriately.

Russell is the most high-profile mortgage broking executive to speak out against a weekend News Limited article which suggested because brokers are paid upfront commissions by lenders, this creates a conflict of interest when recommending loans to consumers.

Russell called the article written by News Limited national economics editor Jessica Irvine “ill-informed” following on from comments from mortgage broker Darren Moffatt who said it was riddled with factual inaccuracies and omissions.

“It is important to set the record straight to reassure Australian property buyers that contrary to the misinformation that was published over the weekend, licensed mortgage brokers are most certainly working in customers’ best interests," says Russell.

“Furthermore, there is legislation in place to enforce that mortgage brokers are acting appropriately,” said Russell who heads up the biggest mortgage broking franchise in Australia.

“Under the National Consumer Credit Protection Act, it is compulsory for all mortgage brokers to be licensed and to fully disclose to a customer any commissions paid on their housing loan.

“Consumers should most definitely do their own research before deciding on which mortgage broker to use. But when they do, they can be assured that ASIC oversees stringent national legislation that imposes strict obligations on mortgage brokers to always make lender and product recommendations that are aligned to customers’ requirements, objectives and financial circumstances,” Russell says.

Also responding to the News Limited article, Phil Naylor, CEO of industry body, the Mortgage and Finance Association of Australia (MFAA) called the assertions in the articles that mortgage brokers did not act in the best interests of borrowers are completely “without foundation”.

“Mortgage brokers are now a trusted source of home loan information and cost effective products.

“It is law that all commissions are disclosed fully in loan documents for borrowers, including upfront, trail and volume commissions. The industry has been closely involved in the Federal Government’s creation of rules to protect borrowers, who find mortgage brokers a very valuable resource in making what is the largest investment of their lives,” Naylor says.

“This is evidenced by the fact that about 41% of all home loans in Australia are now written by brokers, the vast majority of whom are members of the MFAA, which ensures the highest professional, training and disciplinary standards for the protection of consumers, he adds.

Naylor says “transparency is a key aspect of how mortgage brokers operate and it is unfair to assert that brokers are not providing unbiased and comprehensive information as it is published in the loan documents borrowers review and sign.

Ray White-owned mortgage broking group Loan Market Group also defended the industry yesterday.

Loan Market corporate spokesman Paul Smith said the brokerage was disappointed by weekend newspaper reports claiming brokers were merely “salesmen” conflicted because of the commissions they received from lenders.

According to Smith, the rise in popularity for mortgage brokers has occurred because mortgage brokers enable borrowers to make considerable savings.

“The success of a mortgage broker is built upon providing a unique service where they can negotiate lower interest rates and fees and guide borrowers through a range of products most people simply wouldn’t have the time to research,” he says.

______________________________________________________________________________________________________________

 http://www.propertyobserver.com.au/mortgages/mortgage-brokers-required-by-law-to-work-in-customers-best-interests-mortgage-choice?utm_source=po&utm_medium=aida&utm_campaign=news&utm_source=Property+Observer+List&utm_campaign=ac9eb034e0-November_26_20124_10_2012&utm_medium=email

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Comments

  • doyla66
    doyla66 Tuesday, 27 November 2012

    A similar article was printed in The Adviser. It is the comments I find quite interesting.
    http://www.theadviser.com.au/breaking-news/8027-mfaa-needed-to-defend-attacks-on-brokers

  • doyla66
    doyla66 Tuesday, 27 November 2012

    I read that hundreds of mortgage brokers were leaving the industry EACH WEEK? Listen to Kim Cannon of FirstMac speak about brokers'conscience (doing whats best for consumer or going after best commissions) ..interesting
    http://www.brokernews.com.au/tv/fierce-sales-tactics-threaten-commissions-146420.aspx

  • doyla66
    doyla66 Tuesday, 27 November 2012

    MFAA seek USSR

    The industry seeks "censorship" stating, "industry stakeholders believe the industry bodies should be doing more to prevent articles like this being written in the first place...And to compare finance brokers to washing machine sales people is simply ridiculous and insulting to the professional people within our industry"...ok, we know they don't sell washing machines, as if they did, we also know --they would be a much "cleaner" bunch of gals/lads..

    Denise is always available to assist the MFAA in matters of first/second/third[800members+++] "confirmation" in regard to industry comments stating, "...that any reasonable journalist worth their salt would have done their research or at least asked for comment from the industry"..but they did, my dear Sir ---that's the salient point, Sir...--obtained, qualified, indisputable truth that really hurts...just call or write to [email protected] ---only a phone call/email away...surely u wish to verify... "confirmation", dear Sir.

  • Denise
    Denise Tuesday, 27 November 2012

    Well Mortgage Choice is off the mark either with no knowledge of the truth at all or by design. Their comment shows a lack of understanding of the way ASIC has let down consumers: He States: they (the public) can be assured that ASIC oversees stringent national legislation that imposes strict obligations on mortgage brokers.

    ASIC oversees is in fact ASIC overseas. It sees nothing, hears nothing, tells no-one. ASIC doesn't enforce the law. The proof of this statement: 800 Members of BFCSA growing daily. Aggrieved consumers is a Growth Industry!! The Brokers were set up by the Banks and therefore Naylor must be protecting the Banksters.....is that the case Phil? Whose side are you on?
    Remember you said in 2004: "we do not want any pesky consumer advocates hanging around".....hmmmmm! [email protected]

  • doyla66
    doyla66 Tuesday, 27 November 2012

    "in customers’ best interests" ? - nice PR statement, like no lo doc loan fraud.
    Who decides what's in the customers' best interests?
    I've experienced two different professionals assuring me that what they want is in my best interests - and the consequences, including their refusal to behave as if they accept that they have a higher duty of care, some skin in the game and a legal liability for any losses.
    That's before I even touch on the work of both brokers and lenders who no doubt believed they were acting in my best interests. Even breaking the Law?

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