Login
ISCOVER
The MFAA has hit back at APRA over its "completely incorrect" assertions about mortgage broker commissions in its residential mortgage lending guidance.
"APRA's APG 223 Residential Mortgage Lending attempts to provide [lenders] with sound business practices related to mortgage lending," MFAA chief executive Siobhan Hayden said.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
"Its assertion however that 'commissions paid upfront (to brokers) tend to encourage less rigorous attention to loan application quality' is completely incorrect," she said.
"I am disappointed to read such comments from APRA's chairman and it demonstrates that Mr [Wayne] Byres has little or no knowledge of the third-party market."
The MFAA's reaction comes afterThe Adviser today reported that the prudential regulator had warned banks about the "inherent" risk of broker commissions.
Since the introduction of the NCCP, the rigour applied to mortgage lending by mortgage brokers normally exceeds what is currently delivered directly by lenders, Ms Hayden said.
"The 'prudent' and 'reasonable' suggestions offered to [lenders] in APG 223 are most often 'required' and 'fundamental' within a mortgage broker's business," she said.
"Confidence of the third-party channel by [lenders] is demonstrated by the fact that 50 per cent of new loans to lenders are now attributable to mortgage brokers."
[Related: MFAA tells APRA to give brokers the respect they deserve]
