Banks outside the big five could see a bigger share of broker originated loans in 2009 but only if they can deliver products and pricing on par with the majors.
Commission reductions and poor servicing levels from the majors appear to have fuelled brokers’ resolve to look to the second-tier banks for their clients.
Mortgage Business’ latest weekly straw poll revealed that 61 per cent of the 472 respondents expected second tier banks to win more broker business in 2009.
But while brokers appear keen to support lenders outside of the majors a swing in loan volumes will depend on the ability of the second-tier to deliver on product, price and service.
Omar Bahemia, director of mortgage manager and brokerage Greenspan Financial Services, said he definitely saw second-tier lenders gaining extra business in 2009.
“Not just the second tier banks, but the non-bank lenders such as Challenger, will also gain broker business, purely because of the better service proposition they offer,” he told Mortgage Business.
“Big banks’ service levels are just disgraceful right now and most clients are happy to pay ten or so basis points more if it means they’ll get better service.”
Lyn Duke, of Q Finance, said for her it would come down to what was best for the client.
“I put my client with the best product and rate to suit them,” she said, “I don’t look after my back pocket.”
“My business is based on referrals so I’ve got to choose what’s best for the customer.”
While brokers may like to support second-tier banks in principle, Money Advisers CEO Chris Burns said it might not be possible.
“Brokers would love to give more business to other lenders but the second tier banks have really tightened up on credit standards and their products just can’t compete.”
Mr Burns likened brokers’ gravitation to the major banks to ‘shooting themselves in the foot’ but he added it was very difficult when the banks offered the better deals.
“The big banks are simply getting stronger and stronger.”COMMENT HERE
Broker support is critical for borrowers looking to capitalise on...
The aggregator has welcomed specialty asset finance lender Austra...
The mortgage aggregator has announced the appointment of new busi...