A number of mortgage brokers have expressed their frustration over AMP Bank’s return to investor lending after the group pulled out of the space in July.
Last week AMP Bank said that it will now accept investor property loan applications following a temporary withdrawal from the market in response to regulatory growth guidelines.
“The return to investor property lending is in line with AMP Bank’s commitment to return to the market in 2015,” the group said.
Sydney broker Gregory Uehling of Tandem Uehling said the lender’s decision to exit the investor space will not be forgotten.
“For me, it wasn’t just the pulling of the plug that did damage to their brand and reputation but the fact that they increased their rates across the board by 47 basis points.
“I had just settled a loan two weeks prior to that with AMP and I felt I was short-sided. I was basically duped by AMP because I’m the one who recommended them for that loan so that just made it that much worse.
“These people think that they can just turn around and we’re not going to remember but that’s not the way that I do business as a broker.”
Simplify Your Mortgage managing director Nathan Daniell said: “The biggest thing is that AMP didn’t have to raise capital.".
“[They] could’ve gone to all [their] supporters and said ‘We’ve had to cool this off until we get our investment lending under 10 per cent like APRA want and when we do we’ll bring back more favourable serviceability calculators and loan to value ratios'.
“Instead, they’ve gone ‘We’re pulling out of the market, putting up the interest rate by 47 [basis points]' and then they’ve come out with a 3.99 and we all know that’s below costs for them, more than likely.
Mr Daniell believes the bank is now attempting to attract new customers at the expense of old ones.
“That’s just not a business model that is conducive to building a relationship [with brokers],” he said.
However not all brokers were so dismissive of the bank’s decision.
Home Loan Experts’ Hank Hong defended AMP and said the bank is purely doing what it always set out to do.
“When APRA came down [on investment lending] AMP was way over their quota for the year as they pumped investments in the first six months. Their projection was going to be high so when APRA came through they shut shop,” he said.
“With the time being away they have now sorted out their funding ratio and will be dangerous again.”
Mr Hong said Home Loan Experts was doing a good amount of business with AMP as they have “amazing BDMs”.
“Also, their credit staff are willing to see deals rather than decline deals.”
[Related: ING Direct lifts variable rates]
Brokers are driving competition in the mortgages sector and chang...
An SME lender has raised $25 million in equity to fund the ‘rap...
The weekly round-up of the biggest news stories from across Momen...