The chief executive of an industry body has hit back at recent articles reporting on mortgage fraud and the dishonest nature of the third-party channel.
FBAA chief executive officer Peter White said comments published in the Australian Financial Review last week, in relation to mortgage brokers, represented a complete “lack of credibility”.
The articles he referred to appeared on the front page of Wednesday’s AFR, titled ‘Uncovering the big Aussie short’, by Bronte Capital’s chief investment officer John Hempton and economist Jonathan Tepper, and then a follow-up opinion piece by columnist Tony Boyd in Thursday’s AFR.
“Both articles were clearly written from the perspective of self-interest,” Mr White said. “While this often does not matter, in this case the comments about finance brokers were totally inaccurate and cannot be allowed to remain uncontested.
“For Boyd to label mortgage broking as ‘one of the last bastions of unethical sales practices’ shows his lack of credibility in this area.
“In fact, the article by Boyd was so laughable I had to check that it wasn’t April 1.”
Mr White noted that brokers were brought under the NCCP from 2010 onwards so therefore must uphold transparency towards borrowers and “major responsible lending obligations” to the highest of standards.
While he acknowledged that the authors “might have spoken to one or two people who did the wrong thing”, the articles “generalised that the specific matter was systemic of the whole industry”.
“It was finance brokers in the 1990s that brought service levels borrowers had never experienced in the past, plus product diversification and interest rate competitiveness, as well as professional knowledge not available elsewhere,” he added.
“Boyd’s further statement that ‘there are incentives to sign up customers and encourage them to pay as much as possible for a property’ is 100 per cent wrong. I have never heard of this practice in my 37 years of being in the industry.
“His claim that ‘banks have been complicit in the wayward practices of mortgage brokers by lowering their mortgage lending standards’ is also completely false. Finance brokers can only do what the lenders direct can be done under their credit policies.”
Mr White said he was disappointed to see articles published that discredit the nature of the Australian mortgage broking industry.
“It is a shame that such a highly-respected publication like the Australian Financial Review allows such misleading articles to appear on its pages,” Mr White said.
“The FBAA strongly condemns these comments and stands behind Australia’s finance broking sector.”
[Related: Opinion: In defence of mortgage broking]