Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Still legs in low docs

Staff Reporter 1 minute read

Low doc lending may have slowed but contrary to recent media reports it is far from dead.

Peter Hall, country executive of Genworth Financial agreed that there has been a decline in low doc lending however he believes there is still a viable market for brokers and lenders to focus on.

“There will always be a demand for products and features for the self-employed sector,” he told Mortgage Business

Tighter lending practices over the last year have seen higher LVR products and no-docs virtually disappear while liquidity constraints have sidelined many non-bank lenders who previously held much of the market.

But while many lenders have pulled back from low-doc lending there are still some that see the self-employed sector as a key market.

Huw Bough, head of broker sales RAMS Home Loans believes that there is still a significant target market for legitimate low doc lending.

 “There are around two million self-employed borrowers across Australia who make a significant contribution to our economy,” he told Mortgage Business.

“We are seeing a steady flow and continued demand for RAMS low-doc products,” he said.

Mr Bough said the market was simply experiencing a trend toward “more appropriate pricing and policies” to reflect the risk associated with low-doc lending.

Lenders now recognise that there is a higher price for risk, but according to Mr Bough “low-doc borrowers with strong credit histories wouldn’t necessarily be charged higher premiums.”

“It is more a matter of understanding who represents a legitimate low-doc customer and who doesn’t,” he said.

Mr Hall said the market’s evolution could see the documentation required broaden, for example to include a BAS statement to support borrowers’ self-certification.

“We believe demand for some form of product that caters to the needs of the self-employed borrower should continue...given the number of self-employed Australians in the workforce,” he said.

Published: 03-10-08

Advertisement
Advertisement

Today's other news

Still legs in low docs
default
TheAdviser logo
default

TODAY'S POLL

View results >

Who do you aggregate through?

Thank you for your vote, you can see the results here.

more from the adviser
question mark 850 Brokers reveal which lenders are leading the way

The results are in for the Third-Party Lending Report 2020, revea...

board room office ta Lender revamps broker team

A low-deposit mortgage lender has announced changes to its third-...

build SMEs showing greater resilience to COVID-19

Businesses with an annual turnover of less than $200,000 have far...

FROM THE WEB