MFAA responds to UBS claims

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The MFAA has questioned the way UBS represented the results of its recent consumer survey.

The industry association said that the results of the UBS Liar Loans survey of 907 borrowers do not reflect ASIC’s data.

“We particularly question UBS’ comparison of misrepresentation in the ‘banker vs broker’ channels, given that the actual data shows us that default rates experienced on loans originated through the two channels are quite similar, once controlled for demographic differences,” MFAA CEO Mike Felton said.

“The MFAA relies on actual data collected by ASIC as the source of truth in these matters. ASIC has clearly stated in its Review of Mortgage Broker Remuneration that brokers provide great outcomes for the consumer.”

Mr Felton pointed to ASIC data that reports extremely low numbers of brokers being deregistered, despite the fact that there are more than 16,000 mortgage brokers in the industry.

“Consumers continue to express high satisfaction with brokers, and this customer satisfaction continues to drive referrals. Indeed, more than 53 percent of mortgages are now originated by brokers,” the CEO said.

“UBS has implied in its commentary that brokers are not fulfilling their obligation to act as professionals, or that they are placing consumers into high-risk lending that they cannot afford. The findings simply do not match the reality of the consumer experience, nor ASIC’s actual data into mortgage outcomes.”

The MFAA believes that the research conducted by UBS does not fully consider the operating model of brokers, “nor acknowledge the legal responsibility of consumers to provide full and honest disclosure in the application stage of the loan process, nor the responsibility of lenders to appropriately verify the client’s financial situation and ensure that the loan is affordable”.

In reviewing the performance of mortgage brokers in the lending process, the MFAA stated that it will continue to benchmark against data provided by the regulator, and actual consumer outcomes, rather than consumer surveys.

[OPINION: The blame game (part 2)]

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