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.

Broker calls for vigilance as clients grow ‘desperate’

magnifying glass

magnifying glass
Reporter 2 minute read

Loan Market broker Lee Wisniewski has urged the industry to more carefully consider loan applications from an increasingly desperate clientele.

In an interview with The Adviser, Mr Wisniewski stressed the importance of a careful examination of clients’ credit histories before processing loan applications.

He expressed concern over the rise in the number of clients pursuing property investments they cannot afford.

“I’ve got a lot of people that come to us that we can’t help who have just bought a block of land and need to settle,” the broker said.

“[It’s] not uncommon that land developers are selling property to people that literally cannot find the funding.”

The Loan Market broker believes that many investors are “changing their story” to secure a loan in order to bypass tightened lending restrictions.

“I think it’s just a bit of desperation on people’s part because they feel a bit too restricted on lending at the moment and so they’re trying to get their way out of it."

Mr Wisniewski's was speaking to The Adviser's Elite Broker podcast, where he was asked about a recent Digital Finance Analytics (DFA) report that found more and more home loan applications are failing to convert to funding. 

Advertisement
Advertisement

DFA principal Martin North said that the data, which is based on 52,000 Australian households, shows that more multiple applications are being made to a portfolio of lenders in an attempt to get a single approved loan.

“Essentially, they are backing both horses,” Mr North explained. “They are talking to brokers and potentially putting applications in via brokers but also putting applications in themselves.

“It is creating a lot of noise in the system. That means there is a much lower probability of an application a broker is handling translating into a funded loan.”

Mr North pointed out that consumers understand that credit has become tighter following the introduction of macro-prudential measures.

“They understand that the hurdles are higher now,” the principal said. “They don’t necessarily trust one channel over another, but they will try this portfolio approach and see what turns up. The fact that the processes are far simpler now than they used to be is making it easier.”

PROMOTED FEATURES


 [Related: Investor rates to hit 6.5% by 2020: QBE]

Broker calls for vigilance as clients grow ‘desperate’
magnifying glass
TheAdviser logo
magnifying glass

 

more from the adviser
parliament Responsible lending laws to be scrapped

The federal government has revealed that it will move to overhaul...

Plenti team ta Plenti lists on the ASX

The non-bank lender has commenced trading on the ASX after succes...

fight boxing gloves Brokers maintain low level of AFCA complaints

Over 7,000 complaints relating to home loans were lodged with AFC...

FROM THE WEB